Punitive fees have reached new highs and continue to siphon money out of consumers' checking accounts.

Also, it still costs more to open a checking account at an Internet bank, but after that initial investment you'll earn higher interest, pay lower service fees and need less money in your account to avoid those fees.

Those are some of the findings from the fall 2003 Bankrate.com national survey of checking accounts.

Finding the best checking account requires knowing your checking account habits. The right account is an extremely useful financial tool. The wrong account is like a paper cut -- you can't stop the bleeding. In this case, it's money bleeding out of your account every month, every time you use an ATM, every time you use any of a slew of banking services.

Before we look at the results, it should be noted that one of Bankrate's newest features is an extensive database to help you find the checking account that best fits your needs. More than 1,500 checking accounts offered nationwide in 152 markets of all sizes are canvassed daily. Whether you live in New York or California or somewhere in between, you can find the best deal in your area by clicking here.

For an overall view of the costs involved in owning a checking account, we continue to evaluate the data we receive from the top 10 institutions in the 25 largest markets. We have revised our survey in that we now compare one interest-paying and one noninterest checking account from each institution. The accounts selected are the ones that can be opened for the lowest minimum deposit.

As always, we continue to survey a group of Internet banks to see how online checking accounts compare to those at traditional banks. This survey includes 29 online accounts from 18 institutions.

As in previous surveys, we find that certain fees keep consumers digging deeper into their pockets. Once again, the main culprits are ATM fees and bounced-check fees.

ATM fees -- brick-and-mortar banks

No matter where you live, ATM fees will soak you if you use a machine that isn't owned by your bank. Use another bank's ATM and you'll pay an average surcharge of $1.40. That's a new high, up from $1.37 in spring 2003, and up a whopping 57 percent from the average of $0.89 charged five years ago.

Thanks in part to Washington Mutual's repeal of surcharges nationwide, the percentage of institutions that levy a surcharge has dropped in the past 18 months from 94.9 percent to 92.8 percent. That's a difference of five institutions that no longer assess surcharges.

The average fee to use a non-bank ATM dipped to $1.29 from $1.30 since spring 2003. But taking a longer-range look, the average fee for a withdrawal from a non-bank ATM has jumped 19 percent in the past five years, from $1.08 to $1.29.

Checking Accounts: Brick-and-mortar banks

Bounced-check fees
Nonsufficient funds fees, better known as bounced-check fees, are now averaging $25.80. That's up from $25.52 in the spring and 20 percent higher than the $21.57 average of five years ago. By contrast, the Consumer Price Index is up less than 13 percent in the same period.

Minimum to open
The average minimum to open a checking account and earn interest hit a new high, up 17 percent since Spring 2003 to $494.73. The average minimum to open a noninterest account is $59.49. That's consistent with the $55.39-$67.37 range we've seen in the past five years.

Monthly service fees
If you want to avoid monthly service fees on an interest-bearing account, be prepared to keep a staggering $2,257.82 average balance. That's up 12 percent since spring and more than 44 percent higher than what was required five years ago.

You're much better off opting for the noninterest account, where you'll have to keep a much more reasonable average of $245.37 to avoid fees. That number, in fact, is down 31 percent since spring and is less than half of the $564.69 peak we saw in spring 2000.

The average monthly service fee for interest accounts has hit a new high of $10.86, up from $10.68 in the spring. The average for noninterest accounts is $3.72.

Yields
The ever-declining interest-rate environment puts the current average yield at 0.27, down from 0.39 percent in the spring and down from 1.01 percent in fall 2000 before the interest rate cuts began.

Internet banks vs. brick-and-mortar

Minimum to open
It costs more to open a checking account at an Internet bank but in return you'll get more interest, lower fees and lower minimum balance requirements to avoid those fees.

The average minimum to open an account and earn interest at Internet banks is $708.33 vs. $494.73 at traditional banks. For noninterest accounts, the minimum to open is $105 at Internet banks and $59.49 at traditional ones.

Monthly service fees
Monthly service fees will take a smaller bite out of your account balance at an Internet bank. The average monthly service fee on interest accounts at Internet banks is $5.86 vs. $10.86 at traditional banks. On noninterest accounts, the average is $2.20 at Internet banks, while their brick-and-mortar counterparts charge $3.72.

Minimum to avoid fees
Internet banks require less than half of the balance that brick-and-mortar banks demand to avoid monthly service fees. For interest accounts, the average is $1,088.24 at Internet banks vs. $2,257.82 at traditional banks. The average at Internet banks for noninterest accounts is $80 as opposed to $245.37 at traditional banks.

Yields
Internet banks have a big advantage over traditional banks when it comes to the yield paid on interest checking accounts. The average yield at Internet banks is 1.05 percent vs. 0.27 percent at brick-and-mortar institutions.

Several of the Internet banks surveyed pay 1.50 percent, but Presidential Bank blows them all away with 2.75 percent on its Internet Checking Plus account. It requires $1,500 to open and you must maintain a $1,000 balance to avoid the monthly service fee.

Patty Kite, vice president of retail operations, says it's the lowest yield since the account was first offered in 1999. The account, she says, is so successful that it accounts for half of the bank's total deposits.

"We're trying to attract the average checking account customer. It does require direct deposit and you must apply through the Web site. It helps us cut down on the cost of opening new accounts."

The low yields offered by traditional banks highlight the benefits of free checking accounts, which, as defined by Bankrate.com, means no monthly service fees or per-item fees regardless of balance or activity.

Wachovia customers who forego interest can open a free checking account for $50. If they want interest, the account that requires the lowest minimum balance to open is the Crown Banking account. It pays 0.10 percent and also requires just $50 to open, but you must maintain a $5,000 balance to avoid the $20 monthly service fee. Is the 0.10 percent interest really worth maintaining a balance of $5,000?

Spokeswoman Mary Beth Novarro points out that the $5,000 also can be comprised of funds in a Wachovia savings or money market account, and that the Crown account includes many extras.

"Among the things customers get are free checks, a gold check card with no monthly fee, two fee-free non-Wachovia ATM transactions per month, free online banking, free online bill pay and no-fee traveler's checks and notary services."

Bank of America's Regular Checking isn't free by our definition, but it still highlights the benefit of saying no to interest. The Regular Checking account is the bank's lowest minimum to open a noninterest account. It requires $100 to open and $750 to avoid the monthly $9.50 service fee. The Advantage Checking account pays 0.10 percent interest, requires $100 to open and $5,000 to avoid the $20 monthly service fee. Spokeswoman Ashleigh Adams says customers who opt for the interest account do so because of the extras.

"There really are a lot more advantages to it, including preferred rates on money markets, CDs, selected loans and lines of credit."

Bankrate senior financial analyst Greg McBride says it boils down to knowing yourself as a checking account customer. If you would make good use of those extras, then the interest accounts may be right for you. But for most people, the freebies come at too high a cost.

"It's a matter of opportunity costs," he says. "Do the benefits offset the fact that you have to strand $5,000 in those accounts? A cost-conscious consumer is likely to say no."