By Casey Bond of Go Banking Rates

NEW YORK (MainStreet) — This time last year, Americans were taking to the streets in protest of rising bank fees and switching their money from big banks to credit unions en masse. According to a 2011 survey performed by the National Association of Federal Credit Unions, 54% of credit unions reported an increase in deposits after Bank Transfer Day in 2011. Making the switch, though, may have benefited credit unions more than it did their new members.

Ever since the Occupy Wall Street and Bank Transfer Day movements, depositors are advised again and again that switching to a credit union will solve their big-bank dilemma of numerous, costly fees. Unfortunately, many who make the switch assume mistakenly that just because they're banking with a credit union, they're not going to be charged fees. The truth is that credit union members are just as vulnerable to fees as bank customers -- a fact that is rarely shared or acknowledged.

Credit union members surprised by fees

Harris Schanhaut had been a happy member of Teacher's Federal Credit Union in New York for more than 20 years. So when he planned to relocate his business to North Carolina and needed to open a bank account, Schanhaut turned to a local credit union without question.

That institution was First Flight Federal Credit Union. According to Schanhaut, "This was for business-related expenses that my company would reimburse me for via direct deposit, and I would pay the company card directly via the credit union's online service. I was shocked to discover they charged transaction fees for online banking."

First Flight told him that he could come into the branch perform transactions in person to avoid the fee. The credit union offered inconvenient hours, though. "I worked full-time and the credit union was open just one hour per week when I was not working. I dropped them and they charged me a fee to close my account," Schanhaut says.

After leaving First Flight, he instead opened an account with Wood Forest Bank, where he paid no fees and could visit the branch on weekends.

Unfortunately, Schanhaut's experience is not unusual. The reality is that while credit unions in general have fewer fees, plenty still charge fees comparable to those of big banks, and quite a few credit unions that used to offer products such as free checking accounts have recently begun implementing account minimums and fees.

Weighing the cost of credit union fees

Pentagon Federal Credit Union, more commonly known as PenFed, is an example of a national credit union with a reputation for having some of the steepest fees among financial nonprofits. They also offer just about the most competitive loan rates in the country, though. Depending on members' needs and goals, maintaining a $500 minimum deposit in a checking account to avoid a $10 monthly maintenance fee may be well worth it if banking with the credit union also provides the opportunity to finance a new car at just 1.49% APR.

In fact, credit unions consistently offer the best interest rates on deposit accounts and loans as compared with banks -- eight of the top 10 highest savings rates in the Go Banking Rates national database of interest rates today, for example, are offered by credit unions.

Further, credit unions also appear to be more financially stable than banks; CBS News reports that banks were five times more likely to have failed during the 2008 financial crisis than credit unions.

Even so, depositors whose top priority is avoiding fees should not write off banks as an option, nor should they blindly assume banking with a credit union will provide them a fee-free experience.

Banks no longer the bad guys?

Many big banks that have been given a bad rap for charging excessive fees, such as for checking accounts, will gladly waive these fees for customers who can offer loyalty and increased business. Most checking account fees are avoided by holding an additional account with a bank, such as a savings account, or by maintaining a minimum balance. Banks also generally waive fees for account holders who are financing a home or vehicle through the institution.

Though they offer a variety of benefits, Frank Sorrentino III, CEO of North Jersey Community Bank, told ABC news that credit unions "aren't necessarily the best place for people to keep their money," explaining that individual credit unions differ from each other, and some even charge fees "despite their claims otherwise."

Andrew Schrage, co-owner of Money Crashers Personal Finance, believes the reason some credit unions charge fees is "because they can." He explains, "Many Americans still do not check their monthly bank statements, and many unknowingly pay these fees. The credit unions that remain fee-free are the ones that are truly committed to their customers."

Making the sweeping generalization that credit unions don't charge excessive fees is the same as saying all banks do. There is such diversity within the banking industry that it's important to investigate the individual characteristics of local financial institutions, rather than making assumptions based on the type of the institutions they are.

So what is a credit union member to do when fees become a problem? "There are still plenty of fee-free credit unions out there, and if you start getting charged at your current credit union, simply look elsewhere,” Schrage says. “No matter where you go, however, make sure you check your bank statement each and every month for hidden fees or any errors."

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