Look closely at your last few bank statements. Have you had to shell out for overdraft, ATM or maintenance fees? Even if it was $10, that's $10 too much.
The good news is that once you understand the common types of checking account fees, you can take precautions to better avoid them.
Read more: How an Ally Bank Spending Account can simplify your finances
What are some common checking account fees?
Banks and credit unions have various fees and requirements for maintaining a checking account with them. When deciding where to keep your money, look out for the following:
Monthly service fee: For holding the account, usually waived with minimum balance requirements or direct deposits
Overdraft and insufficient funds fee: Charged when a bank pays a transaction despite insufficient funds
ATM fee: For using an out-of-network ATM, which can include both the bank’s fee and the ATM operator’s surcharge
Minimum balance fee: Applied when an account drops below a bank’s required minimum threshold
Wire transfer fee: For sending or receiving money via wire transfer
How to avoid checking account fees
Fees can add up quickly. Fortunately, many of them are avoidable.
1. Pay attention to minimum balance requirements
A minimum balance requirement isn’t a fee itself, but a condition to avoid one. If your account balance falls below your minimum balance requirement, banks could charge a monthly maintenance fee.
At some banks, minimum balance requirements apply to the combined total deposits of all your accounts at that financial institution. Check the terms at your bank.
2. Use direct deposit and automatic transfers
Direct deposit and automatic transfers can help you avoid a monthly maintenance fee, which is charged when an account falls below the minimum balance requirement. To take advantage of them, first have your paycheck automatically deposited into your checking account.
Savings boosters, a feature of an Ally Bank Savings Account, include recurring transfers, which let you schedule transfers on a timetable that makes sense for you.
3. Link your savings and checking accounts
Opening a checking and savings account at the same bank makes it easy to move money to savings. It also helps to avoid overdraft fees, because your bank can instantly move funds from your linked savings account to cover transactions that exceed the amount in your checking account.
Even if your bank doesn't give you an incentive, consider opening and linking an Ally Bank Spending and Savings Account, where you can get overdraft protection, too.
4. Use in-network ATMs or cash back at stores
Using an out-of-network ATM can cost you several dollars a transaction to get cash from your own account. You can avoid most ATM fees just by using your bank's ATMs.
Ally Bank Spending Account customers can use Allpoint® or MoneyPass® ATMs in the U.S. for free. Plus, we’ll reimburse up to $10 per statement cycle for fees charged at other ATMs nationwide. Use our ATM locator to find your nearest ATM.
Opening a checking and savings account at the same bank makes it easy to move money to savings.
5. Take advantage of special account features
Do some homework on your checking account fees. As fees and rules vary significantly from bank to bank, so do perks and features.
At Ally Bank, perks like ATM reimbursements, no monthly maintenance or overdraft fees and no minimum deposit required to open an account can help you avoid costly fees.
6. Find the right fee-free checking account
If your bank requires you to jump through too many hoops to avoid getting nickel-and-dimed, it might be time to break up. Look for a bank with simple, straightforward terms and excellent customer service.
Take control of your checking
Checking account fees might seem small in the moment, but they can add up over time. By monitoring your balance, understanding your bank’s fee structure and choosing an account that works with how you spend and save, you keep your money where it belongs: in your pocket.
