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Huntington offers free checking, no strings

The Blade/Lori King

Huntington offers free checking, no strings

Plan runs counter to higher-fee trend

No minimum balance. No check or debit-card use requirement. No need to use direct deposit.

Huntington Bancshares rolled out a free checking account this week that comes without any of the conditions banks often impose on such accounts.

Called "Asterisk-Free Checking," the account is an extension of Huntington's 24-hour grace-period program started in the fall that waives overdraft fees if customers who overdraw their accounts cover the amount within a day.

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Huntington customers can switch to the fee-free checking account now. Huntington also will move customers into the new account or Huntington Plus Checking, which provides additional perks for those who maintain $15,000 in deposits.

Free checking comes at a time when more banks are doing the opposite. Banks have been adding fees as they search for ways to replace money lost when federal regulations clamped down on some of their traditional revenue sources, such as overdraft fees.

Sharon Speyer, Huntington's northwest Ohio regional president, said the new checking accounts help differentiate Huntington from competitors. "I think consumers are looking for a straightforward checking product," she said.

"That's why it stands out. That's why we think it's a big deal," said Mary Navarro, Huntington's director of consumer and business banking.

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Huntington cites a recent American Bankers Association survey that shows 81 percent of banks say they plan to increase checking-account maintenance fees, 77 percent will impose or increase fees on other programs, and 66 percent will get rid of free checking.

The survey was taken to determine what banks would do if the fees they collect from retailers for debit-card purchases are slashed.

"Most banks are in the process of searching for other revenue streams to make up for increasing costs and lower revenues," said Carol Kaplan, a spokesman for the American Bankers Association.

"To offer a free checking account, the bank is really taking some risk in hopes they'll make it up in other ways."

Although the new accounts will be free for Huntington customers, the bank itself will incur some costs. Maintaining a checking account costs a bank $250 to $300 a year, according to financial research firm Celent.

Huntington has said it is gaining customers through the initiatives, and that will help make up some of the lost revenue. It also thinks the new accounts could lead customers to deepen their relationship with the bank by adding other accounts.

"We're really looking at not adding fees," Ms. Navarro said. "We don't think we need to."

As part of the free checking account, Huntington will offer a linked savings account, debit-card use, and identification-theft services.

One of Huntington's competitors, PNC, of Pittsburgh, rolled out new checking accounts and credit cards on March 1 that emphasize more choices and rewards.

The bank has kept a free basic checking account. It also has introduced new checking accounts that offer more rewards and perks for customers while offering multiple ways to avoid monthly charges.

Read more of this story at dispatch.com.

First Published May 11, 2011, 4:05 a.m.

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Huntington's new account is called "Asterisk-Free Checking."  (The Blade/Lori King)  Buy Image
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