6 Fees To Be Aware of With Free Checking Accounts

ATM WithdrawalThe best way to get a free checking account or savings account with no strings attached is to have a lot of money to deposit in those accounts. While that may not be realistic for you, this post will teach you how bank accounts work so you can be a smart consumer.

If you keep $50K in a checking account, your bank will earn plenty of profit in interest on your cash to support you as a customer and your transactions, billings statements, regulatory requirements, branch facilities, staff time, etc.

If you have $500 to deposit, then you may be an unprofitable customer for banks unless you ‘behave’ according to the rules of the package they offer. When you break those rules, you get charged a fee.

Fees can be very profitable for banks, so they may not encourage behavior that helps you comply with their rules. So buyer, beware. We see new members of HelloWallet spend on average $77 a month on bank fees. That’s $924 a year or $3.70 per work day if they work 5 days a week, 50 weeks a year. It adds up. But if you ask about fees, bankers will tell you. Ultimately, a good banker will want you to keep your money and grow it through interest in their bank.

The most common fees in free checking accounts and savings accounts.

So here are the most common types of behaviors you can control to make sure you avoid fees on most free checking accounts and savings account.

  • Overdraft fees. You write a check. The check cashes before your salary deposit hits.   You get hit with a fee (usually around $75). If you have a savings account, you can usually link this to checking as a backup reserve fund…but you have to ask your bank to do it. They often won’t tell you. You can also set up alerts inside your online account to ensure you know when you have a low balance and when you get auto deposits from work.
  • ATM fees. Usually a $1-3.00. Nobody likes these, including your bank. It doesn’t do them any good when you use another company’s facilities or equipment. Plan ahead with your cash needs and use your bank.
  • Excess activity: Withdrawals & transactions cost your bank money. So they may limit you. We have one family checking account that only allows 3 transactions a month. If we go over, it’s a $25 excess activity fee. Plan your transactions carefully.
  • Account service / maintenance fees: Some accounts have monthly or annual fees to access their services. Make sure you know what those fees are up front and make sure that the automatic withdrawal of those fees doesn’t take your balance below a minimum required level.
  • Foreign Transaction fees: If you are wiring money abroad or accessing bank services outside the US, there may be a charge, sometimes a lot. Inquire about these fees before making a transaction. Many banks are domestic and it costs them more money to do your business abroad, so you may want to work with an international bank or specialist if you have a lot of foreign transactions.
  • Low balance fees. Know your minimum balance math. Do you have to keep an average monthly balance of $100 or always maintain $500? Whatever the rule, make sure you know how to comply, because the bank will charge you a fee if you dip below that threshold.


Make sure you know which of these fees are part of the free checking accounts you are comparing or have your money in. You can decide for yourself if you can avoid them. If you can, then you are on your way to obtaining a low cost or free checking and savings account.