Free checking accounts have slowly become more rare over the last several years. “After the Dodd-Frank banking act took away much of the revenues banks saw from consumer and business debit card fees, checking account holders were hit with these new costs,” says Cristopher Carillo, the co-founder of payment processing firm Allied Payments.
In 2009, 76% of banks offered free checking. As of 2018, that number dropped to 38%. From monthly maintenance fees to ATM fees to overdraft fees, banks have found plenty of ways to squeeze an extra few dollars from their customers each month.
That doesn’t mean, however, that you’re stuck with an expensive checking account. You shouldn’t have to pay for access to your own money – and you don’t have to. Especially with the proliferation of online banks, which have fewer overhead costs and can pass those savings on to customers, it’s possible to find a checking account that charges zero fees. And the best accounts also offer additional benefits, such as competitive interest rates and tools that make it easier to manage your daily money needs.
How Much Can Checking Accounts Cost?
Despite the availability of fee-free checking accounts, there are plenty of offerings on the other side of the spectrum. Considering the routine nature of opening a checking account, you may not have given much thought to how much that bank account could cost you in the long run.
The truth is that it can cost you quite a bit. Take maintenance fees, for example. Many banks charge a monthly fee to cover the administrative costs of maintaining your account, says Sarah Blanchfield, a financial therapist and founder of My Bulletproof Budget. Maintenance fees can be up to $15.
Some accounts waive this fee if you maintain a minimum balance or a certain amount of monthly direct deposits, but these thresholds may be fairly high and not realistic. The Chase Total Checking account, for example, charges a $12 monthly fee unless account holders electronically deposit at least $500 each month or maintain a daily balance of at least $1,500. Plus, “it must remain about that amount always – any dip below and you will be charged,” Blanchfield says.
Overdraft fees are another way checking accounts can cost you big. “This is what the bank charges you if you spend more money than you have in your account and they front you the money to cover the charge,” Blanchfield says. Overdrafting your checking account results in a fee of about $34, according to the Consumer Financial Protection Bureau. However, it’s one of the easiest fees to avoid, Blanchfield adds. “You have the option to turn off your overdraft protection.”
Then there are fees to receive paper statements, order checks, use an out-of-network ATM, make a transaction overseas and even close your account, all of which add up. On average, checking account holders incur $9.87 in fees per month, or $118 annually, according to the CFPB. That amount increases to $349 annually for customers who opt into certain penalty fees, such as overdraft coverage.
Best No-Fee Checking Accounts
You know what to look for, but where do you actually find these low-cost checking accounts? Among the thousands of financial institutions offering checking accounts, these six stand out as the top no-fee checking options.
Best for ATM fee reimbursements
Alliant Credit Union High-Rate Checking Account
- No monthly service fee
- No minimum balance
- Up to $20 per month in ATM fee reimbursements
- More than 80,000 in-network ATMs
Though the credit union is based in Chicago, just about anyone can qualify for a membership with Alliant Credit Union. Its checking account is one of the best on the market. There is $0 needed to open an account and a competitive 0.25% annual percentage yield when you sign up for e-statements and a monthly electronic deposit.
Best for no overdraft fees
Ally Bank Interest Checking Account
- No monthly service fee
- No minimum balance
- Up to $10 per month in ATM fee reimbursements
In 2021, Ally decided to eliminate all overdraft fees. This online bank likely will still pay small overdrafts but decline larger ones. Account holders with less than $15,000 earn a less-than-impressive 0.1% APY, but higher balances qualify for 0.25% APY.
Best for mobile app
Capital One 360 Checking Account
- No monthly service fee
- No minimum balance
- More than 70,000 fee-free ATMs
Another online option, Capital One’s 360 Checking Account features a top-rated mobile app. Capital One also offers early direct deposit, through which some customers can get access to paychecks up to two days early.
Best for college students
Chase College Checking Account
- No monthly service fee for up to five years
- Resources for help in learning to manage finances
- College students ages 17 to 24 have access to fee-free checking through Chase. New
- Chase customers can also earn $100 cash when they open a college checking account and perform easy-to-fulfill qualifying activities.
Best for cash back
Discover Cashback Debit Account
- No monthly service fee
- No minimum balance
- ATM network of 60,000
- Free checks
Online bank Discover offers a rarity: 1% cash back on up to $3,000 in debit purchases per month. Discover also does not charge overdraft fees.
Best for travel outside of U.S.
Schwab Bank Investor High Yield Investor Checking Account
- No monthly service fee
- No minimum balance
- Unlimited ATM rebates for cash withdrawals anywhere overseas
- No foreign transaction fees
This no-fee checking account is available to Schwab brokerage customers, though you don’t have to fund an investment account in order to open a Schwab checking account. Although you may not be doing much traveling these days, Schwab doesn’t charge a fee for withdrawals via overseas ATMs and refunds surcharges from such ATMs. Schwab also doesn’t assess foreign transaction fees (other banks will likely charge 1% to 3% of the transaction amount).
