A checking account at a federally insured bank or credit union is a safe, nearly essential tool for everyday financial transactions. However, many of these accounts come with monthly maintenance fees that can add up quickly and cost you a lot if you’re not aware of them. According to Bankrate’s checking account survey, the average monthly fee for non-interest checking accounts is $5.31. That amount would cost you over $65 per year.
Fortunately, there are ways to avoid these costs.
1. Sign up for direct deposit
One of the easiest ways to avoid checking account fees is to have your paycheck, pension, or Social Security benefits deposited electronically into your account.
Many banks require a minimum monthly amount of “qualified” direct deposit from an employer, business, government agency or retirement plan provider to waive monthly account fees. Others may only require you to sign up for direct deposit, so read all disclosures carefully.
2. Find a bank that doesn’t charge monthly fees
A 2022 Bankrate survey found that U.S. consumers keep the same checking account for an average of 17 years. Americans are reluctant to leave their bank, and that’s understandable. Changing direct deposits and automatic bill payments and getting new debit cards are a big deal.
But if you’re tired of paying checking account fees, it’s probably time to find a new bank. Online banks generally charge fewer fees because they don’t have to maintain branches and therefore have fewer overhead costs. Plus, they often pay higher interest rates, making it twice as easy to save money.
Thanks to the Internet, switching banks is much easier than it used to be. You can fill out account applications, transfer money and complete all other steps to open a new account online.
3. Meet the minimum balance requirement
According to Bankrate’s 2023 Checking Account Survey, 45 percent of no-interest checking accounts are free, but another 87 percent of accounts charge fees that can easily be waived, such as by meeting a minimum balance.
It’s easy to spend at least $65 per year in monthly maintenance fees for a no-interest checking account and $100 per year in monthly maintenance fees for an interest-bearing checking account. Many financial institutions will waive these fees if you maintain a minimum balance.
Wells Fargo, for example, waives the $10 monthly fee for its Everyday Checking account if you maintain a daily balance of at least $500 or have $500 in qualified monthly direct deposits.
Navy Federal Credit Union waives the $10 monthly fee on its interest-bearing Flagship Checking if you maintain a $1,500 balance.
Some banks waive monthly checking account fees if you maintain a minimum total balance across multiple accounts (e.g. checking, savings, and CDs).
4. Open another account at the same bank
Banks often waive checking account fees for “relationship customers” who, in addition to a personal checking account, also have a savings account, a call money account, a certificate of deposit or a business checking account.
A savings account or money market account linked to your checking account can also protect you from high overdraft fees.
Additionally, by maintaining multiple accounts with the bank, you may be able to earn a higher relationship APY.
Some banks waive monthly checking account fees if you have a mortgage and a linked checking account with them.
5. Take advantage of mobile banking
Many banks now offer mobile banking apps that allow customers to deposit checks, transfer money and pay bills from their smartphones. This can make managing a checking account more convenient and help you stay on top of your balance by sending you balance alerts so you can maintain the required balance to avoid a monthly fee.
There are also third-party personal finance apps that offer helpful digital tools to minimize costs. Many apps are free, but some are not, and costs may increase if you sign up for premium features or services.
6. Meet the minimum debit card requirements
Some institutions waive checking account fees if you use the bank-issued debit card linked to the account to make a certain number of transactions per month for purchases or bill payments. Ten transactions is common.
The bank receives transaction fees from merchants instead of charging you a monthly service fee.
7. Ask for a fee waiver
Credit card companies usually waive a late fee for customers who otherwise have an excellent payment record. The same is true for checking account customers. If you’re a responsible checking account holder who never overdraws your account, you’ll probably be forgiven for a rare mistake that triggers an overdraft fee. Try calling the bank’s customer service line or using its online chat service to see if you can get a fee waived.
8. Use ATMs in your bank’s network
Many banks have thousands of fee-free ATMs in their network, both domestically and internationally. Staying in your bank’s network can save you from annoying out-of-network fees.
Fees vary widely depending on where you make your withdrawals. In some cases, both your bank and the bank outside of your network may charge fees for using the ATM. In that case, you may be charged a percentage of the amount you withdraw. If you travel abroad, you may also be charged a foreign transaction fee. All of these fees add up and can get expensive.
Conclusion
You don’t have to settle for monthly checking account fees. With thousands of banks and credit unions, you have plenty of choices when it comes to where you bank, and many of these options may have lower or easier-to-avoid fees compared to your checking account.
Before you open a checking account, check the bank’s fee schedule. You may find it on the bank’s website, or you may need to call a bank representative to get the link or a copy.
Compare the best checking accounts available to find one with lower fees that meets your needs.