As gaining more market share becomes increasingly important to banks and customers become savvier, free checking accounts have become the norm. And, with a recent survey by the American Bankers Association showing that consumers are spending less and less in monthly maintenance and ATM fees, banks are rolling out even more fee-less products, a trend that raises new questions for bankers.

Sixty-five percent of consumers interviewed by the ABA spend $3 or less in monthly fees for banking services, like checking account maintenance fees and ATM access. More and more of them are using their debit cards and avoiding ATM fees almost altogether.

“I think the consumer is being very sensitive to and wary of fees,” said Deb Bochain, executive vice president of financial services for Middletown-based Liberty Bank.

Bochain’s bank recently rolled out a product that takes “free” to the next level. Free checking accounts are common, but Liberty Bank recently introduced Break Free Checking, a checking account that not only charges no monthly maintenance fees, but also reimburses customers anytime they encounter fees using another bank’s ATMs.

Other small banks continue to introduce new free products, as well, a trend that leaves some of them wondering where their earnings will come from in the future.

“There’s been a very strong tendency toward free everything,” said William J. McGurk, president and chief executive officer of Rockville Bank in South Windsor.

Big, national banks like Bank of America and Wachovia offering free checking accounts and the benefits of nationwide ATM networks, requiring that regional and community banks be creative to compete.

“[The trend toward free banking] is bringing more competitiveness and aggressiveness,” Bochain said.

Some banks, like Liberty and Rockville, depend on the uniqueness of their other products. Liberty recently teamed up with the Connecticut Housing Finance Authority to offer mortgages at a one-fourth point discount for lower-income homebuyers.

Rockville Bank also diversifies its products with a variety of loans and lines of credit for small businesses.

“The commercial side is the only place you can be unique,” McGurk said.

Other banks, like the Savings Bank of Danbury, use freebies to woo customers and build up the relationship in the hopes that maybe the holder of a checking account will, in a couple years, take out a mortgage or another loan from the bank.

“What we count on is the relationship,” said George Herring, vice president of sales for the Savings Bank of Danbury.

So the bank emphasizes its free checking accounts, and when customers come in the door, the bank uses that time to sell other products, Herring said. Most customers have some loyalty to the bank that holds their checking accounts. They think of it as “their bank,” rather than the bank that holds their mortgage or other loans, Herring said.

“That’s what we use to cross-sell,” he said.

The Savings Bank of Danbury’s position as a mutual, rather than stock, bank takes off some of the pressure on earnings, as well, Herring said, so it can afford to keep customers happy with free accounts.

“We don’t have to squeeze every penny out of every customer,” he said. “We can think more long-term.”

‘Changing the Industry’

Liberty Bank has a similar philosophy. It also is a mutual bank, and can afford to show smaller earnings when it introduces a product like its new checking accounts.

All three of the banks have different combinations of free accounts for businesses and individuals.

Liberty Bank has a variety of free checking accounts, and some that are more specialized that charge a monthly fee.

The Savings Bank of Danbury has options for both businesses and individuals to get free checking accounts. The bank started offering free checking accounts 10 years ago, but now other banks have been catching up, according to Herring.

“At the time, we were the only [area] bank doing that,” he said.

Many other banks still charge fees, but offer customers options for avoiding them, Herring said. Some of the Savings Bank of Danbury’s competitors charge fees like 15 cents per check on commercial accounts, but offset that by giving credits if a large minimum balance is maintained. But if a business does not keep a big balance, it ends up paying lots of fees.

Many banks require minimum account balances or direct deposit for free individual retail checking accounts, as well.

“Ours is just no minimum, everything’s free,” Herring said.

The bank does charge what Herring considers “usual” fees, like a $25 overdraft fee or a stop-payment fee of $10, but most customers accept that.

“These kinds of things they expect to pay for,” Herring said.

The one fee that most customers gripe about, however, is the ATM fee. So the Savings Bank of Danbury doesn’t charge customers to use a foreign ATM, even though the bank that owns the machine might charge a fee.

“We don’t charge that fee on our side [although other banks do], so our customers don’t get double-dipped,” he said.

At Rockville Bank, customers are also offered checking accounts that do not have monthly maintenance fees as long as minimum balances are maintained or if the customer has direct deposit. For the bank’s “Rock Solid Checking” account, the $5 monthly fee is waived if the customer has direct deposit. For the NOW Checking account, the $8 monthly fee is waived if the customer has $2,500 in their checking account or in any other related account.

So far, Rockville has not needed to offer many new, free products to lure customers. When New Haven-based NewAlliance Bank formed, incorporating some of Rockville Bank’s biggest competitors, many customers either weary of mergers or wary of big banks started new relationships with Rockville, McGurk said.

“People were just streaming in the door,” he said.

But now that the rush is over, the bank is back on the lookout for new products and keeping a sharp eye on the competitive playing field. The latest trend McGurk has noticed is toward free Internet banking services. The bigger banks, like Waterbury-based Webster Bank, are touting their free online billpay service. Rockville offers billpay but charges customers who use it. To maintain the service, which is outsourced, the bank pays $4 to $5 a month per account, which is now recouped through fees. But if more banks begin offering free online billpay, pressure to cut fees to retain customers and remain competitive will mount.

“It’s [competition] changing the industry a bit,” McGurk said.