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6 ways to avoid checking account fees

What we'll cover

  • Special account features and other ways to avoid checking account fees

  • How to avoid minimum balance requirements

  • How to decide when to "break up" with your bank

Of all the banking pet peeves people have, one of the biggest has to be paying fees. From overdraft fees to ATM fees to maintenance fees, no one wants to shell out money when they don’t have to.

Take a close look at your last few bank statements and see what you paid in extra charges recently. Is it more than you thought? The truth is, even if it’s $10, that’s $10 too much. There's just no reason to pay checking account fees these days.

Here are six ways to avoid checking account fees for good.

1. Pay attention to minimum balance requirements.

The most common checking account fees are usually known as maintenance fees. An easy way to avoid these types of fees is to make sure you maintain the minimum monthly balance requirements. Minimum balance amounts vary widely from bank to bank, from $25 to as much as $10,000, depending on the terms of the account. You can avoid getting dinged every month by making sure your balance stays above that number.

At some banks, minimum balance requirements apply to the combined total deposits of all your accounts at that financial institution. For example, as long as the balance in your Certificate of Deposit, IRAs, and checking account add up to the minimum — say, $10,000 — you won’t get charged. Revisit the terms at your bank to be sure.

While it may be a good idea to keep a certain amount in your checking as a reserve, you want to make sure you’re not getting charged every time you dip into it. If you’re having trouble keeping your balance above the minimum, or you just don’t want to worry about it, look for a checking account with no minimum balance requirements .

2. Use direct deposit and automatic transfers.

An easy way to make sure you’re meeting that minimum balance requirement and avoiding those fees is to have your paycheck automatically deposited into your checking account.

If you’re worried you’ll end up spending the whole thing if it goes right into your checking account, set up automatic recurring transfers to your savings (making sure your transfer amount leaves at least the minimum balance in your checking account). One of the smart savings tools in our Online Savings Account is recurring transfers, which lets you schedule on a timetable that makes sense for you. That way, you can avoid maintenance fees on your checking account and grow your savings balance, too.

3. Link your savings and checking accounts.

Some banks waive maintenance fees for customers who open more than one account with them. If you already have a checking account, check if you can avoid the fees by opening a savings account, too.

Even if your bank doesn’t give you an incentive for doing so, it can still be a good idea to open and link a savings account and a checking account at the same bank. That’s because many banks allow you to use your linked savings as overdraft protection, and that can save you big. Overdraft fees can approach $40 per incident (yikes).

Just remember, there is a federal limit of six withdrawals from your savings account each statement cycle, no matter the bank.

4. Be smart with your ATM and debit card.

Most checking accounts come with a debit card that makes accessing your funds as easy as possible. But using your debit card — or not using it — can sometimes have expensive consequences. Some banks charge a fee if you don’t make a certain number of debit card purchases within the statement cycle, while some banks will waive those maintenance fees if you make a certain number of debt card transactions each month.

You already know using an out-of-network ATM can cost you several dollars just to get cash from your own account. But you should be able to avoid most ATM fees just by thinking ahead. One obvious way is to use your own bank’s ATMs, but that’s not always feasible. Another way to avoid fees is to find out which network your bank uses. Most banks are part of an ATM network, like AllPoint or Star, and they won’t charge you for using machines within the network. And while there are surcharge-free networks out there, keep in mind your bank might still consider those out-of-network and charge you a fee, so include that in your research, too.

Some banks, like Ally Bank, may reimburse fees charged by other banks’s ATMs up to a certain amount, so it pays to check out your bank’s policy there, too.

If you’re looking for other options, look into whether you can select cash back when making purchases with your debit card. These are typically fee-free, as long as both your bank and the retailer offer it.

5. Dig a little deeper to take advantage of special account features.

Checking account terms are all over the board, so you do have to do some homework to make sure you understand how yours works. Just as fees and rules vary significantly from bank to bank, so do perks and features.

For example, does your bank offer account balance alerts? If so, signing up for that service could give you the heads up you need to avoid getting behind. Are you unwittingly paying more to receive paper statements when you could save by opting to receive electronic statements instead? Time to find out.

And did you know that some banks offer special discounts or waive certain fees for students and seniors? A little sleuthing into hidden perks or recently added account features can pay off when it comes to avoiding fees.

6. Make a switch.

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.

Don't forget to consider online banks, too. The best ones are secure, convenient, and user-friendly. What's more, since they don't have the overhead of traditional banks, online banks often can offer better APYs (annual percentage yields) on certain types of accounts.

It can take a bit of time to audit your checking account statements. But it’ll be time well spent if you discover you’re paying unnecessary fees.

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