ATM fees at 2 isle banks top average in survey

The fees that Hawaii’s two largest banks charge their own customers for using an out-of-network ATM are higher than the average in 25 top U.S. markets.

But overdraft fees that the two local banks charge are below the national average for large financial institutions.

Bank of Hawaii, the state’s second-largest bank with $14.8 billion in assets, said Monday that it charges its own customers $2.50 for using an out-of-network ATM. First Hawaiian Bank, the state’s largest bank with $17.5 billion in assets, charges its own customers $2. Both surcharges are above the $1.58 charged by banks in 25 large U.S. markets, according to a survey released Monday by Bankrate.com.

The $3 fee that First Hawaiian charges noncustomers for using its ATMs is also above the top U.S. banks’ average of $2.77, while Bank of Hawaii is barely below at $2.75, according to data supplied Monday by the individual banks.

Using another bank’s ATM will usually lead to two fees, said Greg Mc­Bride, chief financial analyst at Bankrate. com. One is charged by your bank; the other is charged by the owner of the ATM. That’s the fee that’s risen most consistently and at a faster rate, Mc­Bride said.

The average fee for using an out-of-network ATM has vaulted 23 percent over the past five years. It has notched a new high for eight years in a row and is up 5 percent over the past year, according to Bankrate.

Hawaii was not included in the national survey that was conducted between July 10 and Aug. 6 of 10 banks and thrifts in each of 25 large U.S. markets, according to Bankrate.com spokes­man Ted Rossman.

Overdraft fees, meanwhile, also have surged nationwide. They have risen on average over the past 12 months to $32.74, according to the survey. That’s the 16th consecutive record high, Bankrate.com said.

First Hawaiian charges $30 for an overdraft, while Bank of Hawaii assesses $26, the banks said.

Checking account fees have been increasing as banks adjust to federal banking laws and regulations enacted after the 2008 financial crisis. Among the changes: limits on when banks can charge overdraft fees on ATM and debit card transactions, and a reduction in the fees that banks charge merchants for each customer who uses credit or debit cards for their purchases.

"I expect fees to continue increasing in years to come, but at a modest pace consistent with what we saw this year, just as was the case prior to the onset of these regulations," Mc­Bride said.

The average ATM fees vary across the markets in Bankrate’s survey. Phoenix had the highest average fee for users of ATMs outside their bank’s network at $4.96 per transaction. Cincinnati had the lowest average at $3.75.

Philadelphia had the highest average overdraft fee at $35.80. San Francisco had the lowest at $26.74.

The largest U.S. banks all offered free checking with no strings attached until 2009, when the share of all non-interest checking accounts that were free peaked at 76 percent, according to Bankrate. It’s now at 38 percent; that’s unchanged from last year and only slightly lower than 39 percent in 2012.

Even so, consumers looking for checking accounts without monthly fees have plenty of options.

Many credit unions, smaller community banks and online banks offer no-strings checking accounts. Many banks that do charge a monthly fee will often waive it if the account holder has his paycheck deposited directly into the account.

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The Associated Press contributed to this story.