Intro: Finding the Best No-Fee Checking Accounts | Top 6 Tips to Finding Checking Accounts with No Fees


No one wants to pay extra fees just for having a checking account. After all, part of the value of opening up a checking account is knowing that you have a safe, secure spot to deposit your money. 

Checking accounts help manage monthly payments and provide valuable services, like debit cards and ATM access.

Banks that add on extra fees to checking accounts decrease that value. Holding on to your money means looking for banks that offer checking accounts with no fees. 

Locating banks with no checking account fees not only gives you greater control over your money, but it even gives you greater amounts of money to control.

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Finding checking accounts with no fees puts extra money back into your pocket.

Photo courtesy of: Good Prospects

Finding no-fee checking accounts can actually be a difficult process. A good way for a bank to make additional income is through member fees like overdraft charges, ATM fees, and minimum balance requirements.

These fees are ways for a bank to make money off of your checking account. For that reason, it can be difficult to find no fee checking.

While many reviews discuss the benefits of no-fee checking accounts, not many explain how to find checking accounts with no fees. Our review will cover the basics of no-fee checking, and expand on the best six tips to finding a no monthly fee checking account.

First, our review will answer some basic questions about no-fee checking accounts:

  • Why are checking accounts with no fees disappearing?
  • What are the types of hidden fees in checking accounts?
  • What types of no-fee checking accounts are available?

Second, our review will provide a detailed list of the top six tips to help you find checking accounts with no fees.

Following our expert tips will not only thoroughly explain the methodology behind no-fee checking, but it can guide you through the difficult process of finding no-fee checking for yourself. This review will cover the following six tips to finding banks with no checking account fees:

  • Know the benefits of no-fee checking accounts
  • Be honest about your banking needs
  • Look through every aspect of advertised checking accounts with no fees
  • Eliminate banks with monthly maintenance fees
  • Utilize online banking as a tool for no monthly fee checking
  • Comparison shop to find the best no-fee checking accounts

Our review will act as an invaluable guide to help you find the best checking account for you—which often means finding no fee checking accounts.

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Why Are Checking Accounts with No Fees Disappearing?

No fee checking accounts are quickly becoming a thing of the past. While they used to be a banking staple, checking accounts with no fees have been steadily disappearing over the past decade.

For example, a whopping 76% of checking accounts were completely free in 2009. Three years later, that number decreased tremendously to 39% of checking accounts with no monthly fees in 2012. In the last four years, those numbers have continued to decrease.

Along with dropping rates of no fee checking accounts, the percentages of American consumers who utilize banking accounts has also dropped. An FDIC survey found that, in 2015, 7% of Americans declined banking services. This marked the lowest usage percentage in the last decade. Without access to no-fee checking accounts, more consumers are forgoing banking services altogether. 

The same FDIC survey found that even consumers with bank accounts were still looking elsewhere. These banking consumers are called “underbanked households.” In 2015, a surprising 19.9% of consumers who had bank accounts still chose to utilize alternative banking services, like money transfers, independent check cashing, payday loans, and pawn shops.

Eliminating services like no-fee checking accounts created a high cost of banking, meaning that families or individuals looking to conserve money began looking elsewhere. Banks with no checking account fees were in short supply, and consumers certainly reacted. To combat loss of banking business, the FDIC began encouraging banks to change their practices toward checking accounts with no monthly fees.

Regardless of FDIC support, improvement has been incremental. Even after four years of encouragement toward offering checking accounts with no fees,  7% of Americans are still avoiding banking services. The disappearance of no-fee checking accounts correlates with a greater push toward alternative banking methods, and a decline in new banking consumers.

To combat dropping enrollment rates, many banks have been reworking their basic requirements, advertising no monthly fee checking. Unfortunately, even a no monthly fee checking account can come with hidden fees.

Ultimately, decreased fee checking accounts does not result in no-fee checking accounts. True checking accounts with no fees will avoid hidden penalties. Finding no-fee checking means being aware of what fees can potentially be included.



What Are the Types of Hidden Fees in Checking Accounts?

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Incremental hidden fees can add up over the long run, taking money out of your wallet. 

Photo courtesy of  Modern Dollar Planning

It goes without saying that banking is a business, and businesses need to make money. Part of a bank’s income stems from fees generated through checking accounts. Checking accounts with no monthly fees decrease banking income. As a result, even a checking account with no fees may have hidden fees within fine print.

An increase in fees is not entirely without positive consequences. As banking evolves, so do their services. ATM locations, debit cards, and online banking all need to be financed in some way. Checking account fees help regulate these services. Still, checking account fees are an additional hassle, and checking accounts with no fees are in high demand.

The most common checking account fees are:

  • Early account closure fee

Banks like BB&T and Citibank charge an additional $25 for closing an account within 90 days. Additionally, HBSC and PNC Bank will charge $25 for account closures within 180 days.

No-fee checking accounts allow banking customers to open and close bank accounts with no time restrictions.

  • Monthly maintenance fee

Maintaining checking accounts costs each bank an estimated $300 per year, and monthly maintenance fees recoup that loss. It is possible to avoid monthly maintenance fees, but there are steep requirements.

For example, a Value Checking Account through Wells Fargo comes with a $9 maintenance fee, which can be avoided through either a $1,500 minimum balance or a $500 direct deposit.

Checking accounts with no fees have increased in demand due to steep requirements such as these. A no monthly fee checking account can eliminate this service fee.

  • Overdraft fees

In 2014, the typical overdaft fee was $35 per incident, a number which hasn’t changed much. More than half of checking accounts are instantaneously enrolled in overdraft services, without consumers even realizing it.

Enrolling in overdraft protection tacks on additional fees. The Bank of America Core Checking Account charges $10 to draw overdrafted funds from a linked account. Overdraft protection through Wells Fargo costs $12.50.

No-fee checking accounts typically come with free overdraft protection, effectively avoiding this potential charge.

  • Teller fees

Many banking consumers may not realize that they are being charged extra money for face-to-face interaction. With 80% of banking consumers visiting physical locations in 2015, teller fees can certainly add up.

For example, the BBVA Clear Connect checking account comes with a monthly allowance of 5 in-branch withdrawals and 2 in-branch deposits. Exceeding these allowances can cost $1 and $4 per additional transaction, respectively.

While these fees may not affect the average banking consumers, businesses will find especially beneficial.

These additional fees can be easily hidden within the fine print of a checking account without fees. Because offering fee-free checking accounts decreases a bank’s ability to make money, it can be difficult to find checking accounts with no fees, hidden or otherwise.

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Top 6 Tips to Finding Checking Accounts with No Fees

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With the top six tips to finding checking accounts with no fees, our review can guide you to identifying the best no fee checking accounts.

Photo courtesy: Huffington Post

Even though no monthly fee checking is in short supply, the demand for checking accounts with no fees is huge. Finding no-fee checking accounts may take a bit of extra work and dedication. As a banking consumer, you have a right to find the best bank for you, and that often means finding banks with no checking account fees.

Following our six tips to finding checking accounts with no fees will help guide you through your search for no-fee checking. With a little bit of focus and guidance, any consumer can find a checking account without fees.

1. Know the Benefits of No-Fee Checking Accounts

Avoiding additional fees is a huge benefit of no monthly fee checking. While most consumers realize that no-fee checking accounts are advantageous, it is important to have a clear view of why. Knowing the benefits of no-fee checking accounts can provide additional motivation for finding your own checking account without fees. The benefits of no-fee checking accounts are:

  • Your money stays in your account, where it belongs

By eliminating monetary penalties, no-fee checking accounts keep your money intact. Fee-free checking accounts enhance your ability to save by limiting a bank’s ability to make money through additional charges.

  • Decreased stress over maintaining finances

Additional fees can cause a great deal of stress. After all, checking accounts provide banking consumers with the ability to pay monthly bills like housing, student loans, car payments, and even daily necessities.

No-fee checking accounts relieve that pressure, removing minimum balance requirements and monthly maintenance fees from the equation.

  • Enhanced online services

Banks with no checking account fees tend to offer enhanced online services as well. Not only are banking fees becoming a huge source of competition for banks, but so are online services.

The vast majority of checking accounts with no fees may actually operate purely online. In fact, 6 of the top 10 checking accounts last year came from online-only banks.

The opportunity for enhanced online services is a huge benefit to finding no-fee checking accounts. Checking accounts with no fees and enhanced online services are able to provide greater accessibility without physical presence.

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2. Be Honest About Your Own Banking Needs

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Finding no fee checking accounts involves understanding your unique banking needs.

Photo courtesy of: U.S. News & World Report

Being honest about your own banking needs will provide clarity while searching for no-fee checking accounts. This involves applying the key components and benefits of a no monthly fee checking account to your own financial habits.

As banking consumers, we don’t always pay attention to our banking habits, and how they can be positively affected by checking accounts with no fees. Some important questions to ask include:

  • How much of my money is going toward maintenance fees?

If you find that a large percentage of your checking account is getting eaten up by a monthly maintenance fee, then a no monthly fee checking account could easily resolve that issue.

Eliminating all potential maintenance fees is a huge benefit of no-fee checking accounts.

  • Can I maintain a minimum balance to avoid getting charged?

If maintaining minimum balance requirements doesn’t work with your payment schedules, fee-free checking accounts can eliminate those heavy requirements.

Avoiding a monthly fee takes an average of a $723.02 checking account balance. With a no monthly fee checking account, these requirements can be eliminated.

  • Is visiting a physical banking location important to my banking experience?

Physical banking locations cost more money to maintain, which means more fees. Online-only banks tend to make no-fee checking accounts part of their business plan. If visiting a physical bank location isn’t essential to maintaining your checking account, an online-only checking account can easily provide no-fee checking services.

  • How often do I use online banking?

61% of online checking accounts don’t come with monthly maintenance fees, making online banking an attractive option. Looking for banks with no checking account fees also means looking closely at their online banking options.

Overall, being honest about your personal banking needs will provide clarity and give direction in searching for fee-free checking accounts. No checking account is perfect, but no-fee checking accounts can fulfill the majority of banking needs. Having a clear picture of what you want is crucial when looking for checking accounts with no fees.



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3. Look Through Every Aspect of Advertised Checking Accounts with No Fees

While some fees are inherent to any checking account, there are plenty of hidden fees that may come with an advertised checking account without fees. Early account closure fees, monthly maintenance, minimum balance, and teller fees are all examples of additional charges that may go unnoticed.

These fees don’t even come close to the national average. Studies show that the average checking account has nearly 22 fees, with some reaching close to 50.

The best way to avoid these penalties is to read through every detail of any advertised no monthly fee checking account. While most checking accounts with no fees have easily distinguishable characteristics, many banks are not forthcoming with providing detailed fee information.

For this reason, finding no-fee checking accounts could provide a few charged checking accounts that only appear to be fee-free checking accounts on the surface. In order to discern between the two, it is important to:

Just because the specific product page doesn’t advertise a fee, that doesn’t mean that it is a checking account without fees.

Although a bank may advertise no-fee checking accounts, there could be fine print involved. Be aware of any fine print phrasing that promises full or complete details after signing up for their no-fee checking accounts.

Although credit unions and online-only banks are nontraditional options, they are also great sources for no-fee checking accounts. Widening your search to these banking sources can eliminate false or misleading checking accounts with no fees.

4. Eliminate Banks with Monthly Maintenance Fees

Finding monthly maintenance fees as a checking requirement is an immediate forecast of additional fees to come. In 2014, Bank of America made $986,652 from maintenance fees. Not too far behind was JPMorganChase, at $779,930 for the year.

With the average checking account maintenance fee ranging from $5-$15 per month, banks stand to make huge dollar amounts through eliminating the option for a no monthly fee checking account. This makes monthly maintenance fees a common practice employed by banks.

Part of finding banks with no checking account fees means avoiding monthly maintenance fees at all cost. While searching for checking accounts with no fees, make sure to immediately eliminate these types of accounts. Maintenance and minimum balances go hand-in-hand with additional checking account charges.

5. Utilize Online Banking as a Tool For No Monthly Fee Checking

In a banking world where no-fee checking accounts are steadily disappearing, the online banking market has emerged as a formidable force. Many online banks now offer checking accounts with no fees as a standardized option.

For example, Ally Bank is one of the highest-rated online banks. Not only do their no-fee checking accounts come without restriction or requirement, but they can also earn interest. An Ally checking account can earn 1% interest annually, even with less than a $10,000 balance.

Commonly known for their credit card services, Discover has recently begun offering no-fee checking accounts as well. Opening an online checking account through Discover means having a no monthly fee checking account with no minimum balance requirements and no additional fees.

Additionally, Discover debit card purchases and online bill payments rack up reward points, making it possible to earn $120 in cash back per year.

Though online banking may be a nontraditional option, it may be the best option to guarantee opening a checking account without fees.

6. Comparison Shop to Find the Best No-Fee Checking Accounts

Lastly, the most important tip in finding the best no-fee checking accounts lies in the strength of comparison shopping. This means that every banking consumer should take their time in looking for no-fee checking accounts. Each checking account is different, and while one fee may be eliminated, two more could appear in its place.

The first no monthly fee checking account that you find might not actually fulfill all of your banking needs. Comparing one account to another may open up new banking possibilities, increasing the value of one checking account without fees and decreasing the value of another. Finding checking accounts with no fees takes time and patience.

Comparison shopping can be difficult, as fee components are described differently, and with varying degrees of detail. Though it may require additional effort, comparsion shopping is a valuable and worthwhile tool in finding no-fee checking accounts.



Conclusion

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While it may not be easy, finding checking accounts with no fees brings great benefits to banking consumers.

Photo courtesy of: Bankrate

It’s easy to see why checking accounts with no monthly fees are beneficial. A no monthly fee checking account allows you to safely deposit money, without worrying about getting charged additional fees. Finding checking accounts with no fees is an important part of helping you manage your money wisely.

It can be challenging to save money when banks charge additional fees, and no monthly fee checking is indeed in short supply. Thankfully, although checking accounts with no fees may not be commonly found, heavy banking competition keeps them in existence.

While banking is a business, the key is to let that business work for you, not against you. Banks with no checking account fees may not be focused on making as much money as competitors, but they are certainly focused on providing widespread consumer value. Through following our six tips to finding checking accounts with no fees, consumers can find that same value in their no-fee checking account.

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