Most banks offer free checking accounts, but some charge monthly fees if you don't meet their requirements

You do not have to pay for a bank account. Many banks and credit unions offer checking and savings accounts with no monthly fee, no minimum balance, and no strings attached. But some banks charge $10 to $15 per month if you don't keep a certain amount on deposit, don't set up direct deposit, or don't use the account regularly. The fee depends entirely on which bank you choose and which account type you open.

The key is knowing what triggers a fee before you open the account. A bank's website usually lists the monthly maintenance fee, the minimum balance required to waive it, and any other conditions. If you cannot meet those conditions, pick a different bank. Free accounts exist at most major banks and nearly all credit unions, so paying a monthly fee is optional.

Key Takeaways

  • Most major banks and all credit unions offer at least one account with no monthly fee and no minimum balance requirement.
  • Monthly maintenance fees typically range from $10 to $15 and can be waived by keeping a minimum balance, setting up direct deposit, or maintaining a certain number of debit card transactions per month.
  • Online banks almost never charge monthly fees because they have lower operating costs than brick-and-mortar branches.
  • If you cannot meet a bank's fee-waiver requirements, switching to a different bank costs nothing and takes a few days.
  • Overdraft fees, ATM fees, and wire transfer fees are separate from monthly maintenance fees and can occur even at banks with free accounts.

How banks decide whether to charge a monthly fee

Banks use monthly maintenance fees to cover the cost of running your account. They charge the fee to customers who don't generate enough activity or don't keep enough money on deposit. The specific triggers vary by bank, but the most common are: a minimum balance (often $500 to $2,500), direct deposit of your paycheck, a certain number of debit card transactions per month (usually 10 or more), or a linked savings account with a minimum balance.

If you meet even one of these conditions, the fee is usually waived. For example, Chase waives the monthly fee on its Chase Total Checking account if you maintain a $500 minimum balance, set up direct deposit, or have a linked savings account with $300. Bank of America waives the fee on its Bank of America Checking account if you maintain a $1,500 minimum balance or set up direct deposit. Credit unions typically waive fees if you maintain any balance at all or use your debit card a few times per month.

The fee structure is always disclosed before you open the account. You can find it on the bank's website under "account terms" or "pricing information," or you can call and ask directly. Never open an account without knowing whether it charges a monthly fee and what you need to do to avoid it.

Banks and credit unions that do not charge monthly fees

Online banks almost never charge monthly maintenance fees because they have no physical branches and lower operating costs. Ally Bank, Charles Schwab Bank, Discover Bank, and Chime all offer checking accounts with no monthly fee, no minimum balance, and no direct deposit requirement. These banks make money from interest on loans and investments, not from account fees.

Major brick-and-mortar banks also offer free accounts, though you may need to meet one condition. Wells Fargo offers Wells Fargo Everyday Checking with no monthly fee if you set up direct deposit or maintain a $500 minimum balance. Citibank offers Citibank Basic Checking with no monthly fee if you maintain a $1,500 minimum balance or set up direct deposit. TD Bank offers TD Bank Convenience Checking with no monthly fee if you maintain a $100 minimum balance.

Credit unions are the easiest route if you want to avoid fees entirely. Most credit unions waive monthly fees for any member who maintains even a small balance or uses their debit card regularly. You can find a credit union near you by searching the CO-OP Network or Allpoint, which list participating institutions by zip code. Membership usually requires living or working in a specific area or belonging to a particular employer or organization, but many credit unions have opened their membership to anyone.

What happens if you cannot meet the fee-waiver requirements

If you cannot maintain the minimum balance or do not receive direct deposit, you will pay the monthly fee every month unless you switch banks. A $12 monthly fee costs $144 per year, which adds up quickly on a small balance. The solution is to open an account at a bank that does not require you to meet any conditions.

Switching banks is free and takes about a week. You can keep your old account open while you set up the new one, then transfer your money and update your direct deposit information. Your old bank will not charge you a fee for closing the account (though some banks require you to wait a few days after opening to close it). Once your new account is set up and funded, you can close the old one.

If you are worried about overdraft fees or other charges, read the bank's overdraft policy before you open the account. Some banks charge $35 per overdraft, while others charge less or offer overdraft protection that links your checking account to a savings account or credit line. This is separate from the monthly maintenance fee and can happen at any bank, so compare policies across multiple banks before deciding.

The difference between monthly fees and other charges

A monthly maintenance fee is not the same as an overdraft fee, ATM fee, or wire transfer fee. You can have a free account and still pay charges if you overdraw your balance, use an out-of-network ATM, or send a wire transfer. These fees are optional — you pay them only if you take the action that triggers them.

Overdraft fees occur when you spend more money than you have in your account. Most banks charge $30 to $35 per overdraft, though some charge less. You can avoid overdraft fees by setting up overdraft protection (which links your checking account to a savings account or credit line) or by declining overdraft coverage (which means transactions will be denied if you do not have enough money). ATM fees occur when you use an ATM that is not owned by your bank, usually $2 to $3 per transaction. Wire transfer fees range from $15 to $30 depending on whether the wire is domestic or international.

None of these fees are mandatory. You can avoid them by staying in your account balance, using your bank's ATM network, and not sending wire transfers. A free checking account with no monthly fee is still free as long as you do not trigger these optional charges.

How to compare accounts before opening one

Before you open a bank account, write down the bank's monthly fee, the minimum balance required to waive it, and any other conditions. Then check whether you can realistically meet those conditions. If you receive a paycheck by direct deposit, that counts. If you keep at least the minimum balance in the account, that counts. If you use your debit card at least 10 times per month, that counts. If none of these apply to you, pick a different bank.

Also check the overdraft policy, ATM network, and whether the bank offers online banking and mobile deposits. These features do not cost extra, but they affect how convenient the account is to use. A free account that requires you to visit a branch to deposit checks is less useful than a free account that lets you deposit checks by phone.

You can compare accounts across multiple banks using their websites or by calling their customer service lines. Most banks have a customer service number on their homepage. You can also visit a branch in person and ask a banker to walk you through the account options. There is no cost to compare, and no obligation to open an account.

Frequently Asked Questions

Can I have a bank account without a minimum balance?

Yes. Many banks and most credit unions offer accounts with no minimum balance requirement and no monthly fee. Online banks like Ally, Discover, and Chime are the easiest option because they have no minimum balance, no direct deposit requirement, and no monthly fee. Credit unions also typically waive the minimum balance requirement for any member who maintains the account.

What if I do not have direct deposit?

You can still open a free account. Many banks waive the monthly fee if you maintain a minimum balance instead of setting up direct deposit. If you cannot maintain the minimum balance, choose a bank that does not require either one. Online banks and credit unions are your best options.

Do I have to pay to close a bank account?

No. Banks cannot charge you to close an account. Some banks require you to wait a certain number of days after opening before you can close it (usually 30 days), but closing itself is free. You can close the account online, by phone, or in person at a branch.

Are there banks that charge for savings accounts?

Most banks do not charge a monthly fee for savings accounts. Some banks charge a fee if your savings account balance falls below a certain amount (usually $300 to $500), but many waive the fee if you link the savings account to a checking account or maintain any balance at all. Check the bank's pricing information before you open a savings account.

What is the difference between a bank and a credit union?

Banks are for-profit companies owned by shareholders. Credit unions are nonprofit organizations owned by their members. Credit unions typically charge fewer fees and offer lower minimum balances because they return profits to members instead of shareholders. You can join a credit union if you live or work in a specific area or belong to a particular employer or organization.