What Are Checking Account Monthly Maintenance Fees?

What Is a Monthly Maintenance Fee?

A monthly maintenance fee is a type of recurring fee that banks and credit unions may charge on checking and savings accounts. The fee is meant to cover the costs of maintaining these accounts and providing services, such as online banking access, branch locations and customer support.

These fees vary at each institution and with each account. Some financial institutions charge no fees, while others may charge them only on some accounts or offer ways to avoid the fee.

For instance, banks may charge lower service fees on basic checking accounts and higher fees on accounts that pay interest or offer rewards on debit transactions. For accounts that do charge for maintenance, the fee often ranges from about $5 to $35 a month.

Learn more: Common Bank Fees and How to Avoid Them

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Why Do Banks Charge Monthly Maintenance Fees?

Banks and credit unions may charge monthly maintenance fees to pay for their operating costs and help boost profits. For that reason, it's more common to see these fees at for-profit institutions that maintain branch networks. On the other hand, you'll often find no-fee accounts at online institutions because they have lower overhead and staffing expenses.

Credit unions are not-for-profit, so they're more likely to charge lower fees than banks or no fees at all.

How Can You Avoid a Monthly Maintenance Fee?

It's possible to avoid paying monthly maintenance fees. Here are some options to try.

Set Up Direct Deposit

Some banks and credit unions waive monthly service fees when you set up direct deposit in your account. Qualifying deposits usually include employer paychecks, government benefits, pensions and other payments that are deposited electronically into your account. Some financial institutions also allow you to make your own deposit each statement period to avoid the fee.

Check your bank's rules to see what qualifies and whether you need to deposit a minimum amount each month.

Learn more: How to Split Your Direct Deposit Into Multiple Bank Accounts

Keep the Required Minimum Balance

Another way to avoid monthly maintenance fees is by keeping a certain amount of cash in your checking or savings account. This is also known as your minimum daily balance. If you want to use this option to avoid the fee, check your bank's rules on how it calculates your required balance. For instance, the bank may check how much is in your account at the beginning of each day or average your balances across several accounts within the same institution.

Get a Different Account at the Same Bank

Your bank or credit union may offer a lineup of checking and savings accounts that you can choose from. Go through your options and see if any of the accounts come with a lower fee or none at all. If you qualify for one of the cheaper accounts, close out your old account and open a new one at the same bank. This is a good option if you're happy with the customer service, banking tools, branch location and ATMs you have access to.

Learn more: Ways to Manage Multiple Bank Accounts

Check the Rules

There are other ways to avoid the monthly service fee without setting up direct deposit or maintaining a minimum balance. For instance, some banks don't charge fees when you're a military member, meet age requirements or you're employed with a partnering business.

Look for relationship banking too. Your bank may waive checking account fees for customers who have a credit card or another type of account with the bank. Additionally, some financial institutions offer rewards programs that provide exclusive benefits and discounts. When you reach qualifying status, you may be able to waive fees associated with your account.

Switch Banks

Jumping through hoops to avoid maintenance fees can be a hassle. If you can't keep up, you might have to pay the fee one month because your balance drops below a certain amount or your direct deposit doesn't meet requirements. This is one reason some people overdraw their accounts.

In that case, you might consider switching to another bank or credit union that doesn't charge monthly maintenance fees. It could be worthwhile even if it's a hassle to switch direct deposits, move automatic bill payments and get new debit cards.

Banks must disclose account-related costs upfront, so ask for the schedule of service charges and fees for the account you're researching. Review this information to see which fees you may incur and whether you can avoid them. Then consider whether you can meet those requirements.

You Don't Have to Pay Bank Fees

Some banks and credit unions charge monthly maintenance fees just for keeping a checking or savings account open. There are often ways to avoid these fees, but it usually entails tracking your balance, setting up direct deposit or meeting other requirements.

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