Are All Checking Accounts Free?

Are All Checking Accounts Free? article image.

If you're considering opening a checking account, you may wonder if all checking accounts are free. Unfortunately, the answer is no, but you may be able to find an account that doesn't charge a monthly fee just for storing your money. Here's what to look for when opening a new checking account.

Are All Checking Accounts Free?

Free checking accounts are typically accounts that charge no recurring fees. Any fees the bank charges must be disclosed when you open the account. If an account is described as "free," it can't charge you fees to make a deposit, withdrawal or transfer. It also can't charge a monthly fee for exceeding a certain number of transactions or not maintaining a minimum balance in your account.

If you find a checking account that doesn't charge any monthly fees, you may not be off the hook just yet. Other bank fees may still apply. Even a free account may charge overdraft fees, out-of-network ATM fees, bounced check fees or a fee to stop payment on a check. In some cases, you might even pay a fee if your account becomes dormant, meaning no activity has been posted to the account for a long period of time.

Some financial institutions may waive these fees, but you'll likely need to meet certain requirements outlined in the fee schedule of your checking account agreement to qualify. And, if you use the account carefully, such as only using in-network ATMs or ensuring you have enough money to cover all your transactions, you shouldn't be charged these fees at all.

It's also worth pointing out that, although you may have opened a "free" checking account, your bank or credit union can begin charging fees as long as they give you notice in writing at least 30 days in advance. Once they do, however, they can no longer advertise that account as a "free" checking account.

How Can I Get a Free Checking Account?

No one wants to pay bank fees on a checking account, especially since it takes a bite out of the money in an account used for everyday expenditures. Although they can be challenging to find, there are ways to get a free (or almost free) checking account.

  • Start with your current bank. If you already have a checking account at a bank or credit union that incurs fees, ask what you need to do to have them waived. Maybe it's as easy as setting up direct deposit or opening another account type—savings or money market, for example. Sometimes building a relationship or having multiple accounts with one bank has its advantages.
  • Switch to a credit union. Not-for-profit credit unions are owned by their members, who benefit from perks many banks don't offer. These perks may include no or lower fees on checking accounts. Credit unions may have a one-time membership fee of $5 to $25 to join and may limit membership to specific communities or businesses.
  • Try an online bank. Thanks to lower overhead because there's no need for branch maintenance, online banks may offer next to nothing in fees. For example, some online banks don't charge monthly service fees, and some don't charge overdraft fees either.
  • Search for free checking accounts. Doing a quick internet search for free checking accounts brings up dozens of options that may meet your individual needs. Always check carefully, however, because fees must be clearly outlined in your agreement but can be harder to find online.
  • Review all fees outlined in your agreement. Your bank or credit union may not charge a monthly maintenance fee for checking accounts, for instance, but may charge you an out-of-network ATM fee, inactivity fee or overdraft fee. Consider all these costs before opening the account to see whether or not the checking account meets your needs and makes sense for your budget.

Common Checking Account Fees

As you review and compare checking accounts, it's important to understand what, if any, fees you may be charged. The fees charged and how much you're charged can vary from one institution to the next. Just a few of the most common checking account fees include:

  • ATM fee: If you withdraw funds from your checking account via an out-of-network ATM, it's possible you'll pay a fee. However, it's also possible you may be reimbursed for any third-party operator fees, or your bank may waive the non-network ATM fees altogether.
  • Monthly service fee: You may be charged a monthly maintenance or service fee just for having a checking account. You might also be charged this fee if the balance in your checking account drops below the required minimum.
  • Check fee: It's possible to be charged a fee each time you write a check or when you write more than a certain number of checks each month.
  • Check printing fee: When you buy printed checks through your bank, you may pay a check printing fee. If you're charged this fee, it is usually automatically deducted from your checking account.
  • Returned deposit fee: If a check you deposit into your checking account bounces, you may be charged a fee, which can average from $10 to $19 per returned check.
  • Stop payment fee: Requesting a stop payment of a check or online payment prevents it from going through your bank account. There is usually a fee for this service, which can be as much as $30.
  • Overdraft fee: When you don't have enough money in your account to cover your transactions, you may be charged an overdraft fee, which can be as high as $35 per transaction. However, some banks may reduce the size of the overdraft fee or the number of overdraft fees the bank charges you daily.
  • Nonsufficient funds fee: Some banks charge a fee when your bank returns a check or electronic payment unpaid because your account lacks the funds to cover the transaction. However, several large banks have recently eliminated nonsufficient fund (NSF) fees on checking accounts.

The Bottom Line

Most checking accounts aren't free. So, before opening a checking account, read the small print outlined in your account agreement, or look for an account disclosure and fee schedule on the bank's website. As checking account fees can add up, finding an account that charges few or waives most, if not all, fees can help you save money in the long run.