SunTrust Makes Free Checking More Elusive

SunTrust Banks (STI), which was forced to retreat from a $5 debit-card fee in the fall, is now making it more difficult for some customers to qualify for free checking.

To avoid a monthly $7 fee starting in August, customers who use the Atlanta bank's basic checking account, Everyday Checking, will need to maintain a minimum daily balance of $1,500 — three times as much as the current requirement. Customers can also avoid the fee by having at least $100 directly deposited into the account each month.

SunTrust is also eliminating a few benefits for its checking customers, including a fee break for first-time overdrafts. The bank currently charges $25, instead of its usual $36, the first time that customers overdraw their Everyday Checking and Student Checking accounts; but as of August, that first-time fee will be the full $36.

SunTrust's Solid Choice Checking, an account with more perks but a higher monthly fee, will also no longer waive one overdraft fee in a 12-month period.

Customers with Student Checking or Solid Choice accounts will pay $2 for transactions at non-SunTrust ATMs. Previously Student Checking customers had two free non-SunTrust ATM transactions per month, while Solid Choice customers had four.

The changes were first reported by the website MyBankTracker and confirmed by SunTrust on Wednesday.

"We are constantly evaluating our product mix and making pricing adjustments as necessary based on numerous factors including, but not limited to, our cost of doing business and the competitive marketplace, balanced with the needs of our clients," Hugh Suhr, a SunTrust spokesman, said in an email.

Many large banks have ended free checking or raised minimum deposit requirements since last year, when federal regulations capped the interchange fees they can charge on debit card transactions.

SunTrust eliminated free checking last year, and was one of the first banks to start charging customers for using their debit cards at all. But it retreated from that $5 debit card fee in the fall, after Bank of America's (BAC) plan to add a similar fee caused a national outcry from consumers and politicians.