A checking account with a federally insured bank or credit union is safe and an essential tool for everyday financial transactions. But many accounts come with monthly maintenance fees that can add up quickly and become costly if you’re not aware of them. According to Bankrate’s Checking Account Survey, the average monthly fee for a non-interest checking account is $5.31. That adds up to a cost of more than $65 per year.
Thankfully, there are ways to avoid these costs.
1. Enroll in direct deposit
One of the easiest ways to avoid checking account fees is to deposit your paycheck, pension or Social Security benefits electronically into your checking account.
Many banks require a minimum monthly amount of “qualified” direct deposits from an employer, business, government agency, or retirement benefits administrator in order to waive the monthly account fee. Other banks may only require you to enroll in direct deposit, so read their disclosures carefully.
2. Find a bank with no monthly fees
According to a 2022 Bankrate survey, the average U.S. consumer keeps the same checking account for 17 years. Americans are loathe to leave their banks, and rightly so: Switching over direct deposit or automatic bill pay and getting a new debit card are big events.
But if you’re tired of paying checking account fees, it might be time to look for a new bank. Online banks typically have fewer expenses and lower fees because they don’t need to maintain brick-and-mortar branches. And they often offer higher interest rates, making it a lot easier to save money.
Thanks to the internet, switching banks is easier than ever before: You can fill out an account application, transfer funds, and complete all other steps of opening a new account online.
3. Meet the minimum balance requirement
According to Bankrate’s 2023 Checking Account Survey, 45% of no-interest checking accounts are free, but another 87% of accounts allow you to easily waive the fee, such as by meeting a minimum balance requirement.
It’s easy to expect to pay at least $65 per year in monthly maintenance fees for a non-interest-bearing checking account and $100 per year in monthly maintenance fees for an interest-bearing checking account, and many financial institutions will waive these fees if you maintain a minimum balance.
For example, Wells Fargo waives the $10 monthly fee on its Everyday Checking account if you have a daily balance of at least $500 or qualifying monthly direct deposits of $500.
Navy Federal Credit Union will waive the $10 monthly fee on interest-bearing Flagship Checking if you maintain a balance of $1,500.
Some banks will waive monthly checking account fees if you maintain minimum balances across multiple accounts, including checking, savings and CDs.
4. Open another account at the same bank
Banks often waive checking account fees for “relationship” customers who have a savings account, money market account, certificate of deposit or business checking account in addition to a personal checking account.
A savings or money market account linked to your checking account can also help you avoid costly overdraft fees.
Plus, having multiple accounts with a bank can potentially earn you a higher relationship APY.
Some banks will waive monthly checking fees if you have a checking account linked to your mortgage.
5. Use mobile banking
Many banks now offer mobile banking apps that allow customers to deposit checks, transfer funds, and pay bills from their smartphones. This makes managing your checking account more convenient and sends you balance alerts so you always know what’s left and can maintain the balance you need to avoid monthly fees.
There are also third-party personal finance apps that come with handy digital tools to help you minimize costs. Many apps are free, but some require payment, and the cost can increase if you sign up for premium features or services.
6. Meet the minimum spend on your debit card
Some financial institutions will waive checking account fees if you make a certain number of purchases or bill payments each month using a bank-issued debit card linked to your account — usually 10 transactions.
Instead of charging a monthly service fee, banks receive transaction fees from merchants.
7. Request a fee waiver
Credit card companies typically waive late fees for customers with a good payment history. The same goes for checking account customers. If you keep a close eye on your checking account and have never overdrafted your account balance, you can probably get a waiver for the rare mistake that would result in a checking account overdraft fee. Try calling your bank’s customer service line or using their online chat service to inquire about a fee waiver.
8. Use ATMs within the bank network
Many banks have thousands of fee-free, in-network ATMs both domestically and internationally. By staying within your bank’s network, you can save on pesky out-of-network fees.
Fees vary widely depending on where you’re withdrawing from. Sometimes, you might be charged fees for using the ATM, both by your bank and by non-partner banks. They might also charge you a percentage of the amount you withdraw. If you’re traveling abroad, you might also be charged foreign transaction fees. All of this can add up and add up to a lot.
Conclusion
You don’t have to put up with monthly checking account fees. With thousands of banks and credit unions, you have a variety of options when it comes to choosing a bank, many of which have lower fees than checking accounts or that you can easily avoid.
Before you open a checking account, check your bank’s fee schedule. You may be able to find it on the bank’s website, or you may have to call a bank representative to get a link or a copy.
Compare the best checking accounts available to find one with low fees that fits your needs.
