Say Goodbye to Annoying Checking Account Fees With These Simple Tricks
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I have often found myself equally surprised and shocked when I get my hands on my bank statements. Besides the expenses, several bank fees bite into my savings, and I always look for ways to reduce them. Changing banks isn't always a good option because I could end up with a new fee in a new bank.
If you, like me, want to eliminate the annoying checking account fees, here are a few tried and tested tricks to help you.
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What is a checking account?
A checking account is a type of bank account designed for everyday transactions. It provides a convenient and secure way to manage your money, allowing you to deposit and withdraw funds easily. Here are some key features and aspects of checking accounts:
- Deposits. Account holders can deposit money into a checking account through various methods, such as direct deposit, cash deposits at a bank branch or ATM, or electronic transfers.
- Withdrawals. Checking accounts provides easy access to your funds. You can withdraw money by writing checks, using a debit card at ATMs or point-of-sale terminals, and making electronic transfers.
- Check writing. While checks have declined with the rise of electronic transactions, many checking accounts still offer check-writing capabilities. Checks can be used to pay bills or pay individuals or businesses.
- Debit cards. Most checking accounts come with a debit card, which can be used for purchases at retail stores, online transactions, and ATM withdrawals.
- Online banking. Checking accounts often come with online banking services, allowing you to manage your account, view transactions, and perform various banking activities through a secure website or mobile app.
- Overdraft protection. Some checking accounts offer overdraft protection, which helps prevent declined transactions or overdraft fees in case of non sufficient funds by linking the checking account to another account, such as a savings account or a line of credit.
- Fees and charges. Checking accounts may have fees, such as monthly maintenance fees, overdraft fees, or ATM fees. However, many banks offer fee-free checking accounts or provide ways to waive certain fees by meeting specific criteria.
- Interest. While checking accounts traditionally don't offer high interest rates compared to savings accounts or other investment options, some banks provide interest-bearing checking accounts that may earn a small amount of interest on the account balance.
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Types of checking account fees
Checking accounts can have various fees associated with them. Common fees that you might encounter with a checking account include:
Monthly maintenance fees
Some banks charge a monthly fee for maintaining a checking account. However, many banks offer fee-free checking accounts, especially if you meet certain criteria, such as maintaining a minimum balance requirement, setting up direct deposits, or having a linked savings account. It typically ranges from $5 to $15 per month. Some premium accounts might charge more.
Overdraft fees
If you spend more money than you have in your account, and your account goes into negative balance, you may incur overdraft fees. Some banks also offer overdraft protection services to help you avoid these fees. Overdraft fees can range from $30 to $35 per transaction.The banks that offer overdraft protection services, might have separate fees or use a line of credit or savings account to cover overdrafts, potentially at a lower cost.
ATM fees
If you use ATMs not affiliated with your bank's network, you may be charged withdrawal fees. Some banks reimburse a certain number of non-network ATM fees monthly, while others may charge both the ATM owner's fee and an additional fee. Non-network ATM fees can be around $2 to $3 per transaction. Additionally, the ATM owner might charge their own fee, which can be similar in amount.
Transaction fees
Certain types of transactions, like wire transfers or cashier's checks, may come with fees. These fees can vary depending on the bank and the type of transaction. For wire transfers, domestic fees might range from $15 to $30, while international transfers can be $30 to $50 or more. Cashier's checks might cost between $5 and $15.
Paper statement fees
Some banks charge a fee if you receive paper statements instead of electronic ones. This fee is usually around $2 to $3 per statement.
Stop payment fees
If you request a stop payment on a check, a fee may be associated with this service. These fees can range from $15 to $35 per request.
It's important to carefully review the terms and conditions of any checking account you're considering, paying attention to the fee schedule. Many banks offer ways to avoid fees, such as maintaining a minimum balance, setting up direct deposits, or using ATMs within their network. Additionally, some banks offer fee-free or low-fee checking accounts as part of their product offerings.
Tricks to avoid checking account fees
Avoiding checking account fees often involves understanding your bank's fee structure and taking proactive steps to meet certain requirements. Here are some tricks and tips to help you avoid checking account fees:
Maintain a minimum balance
Many banks waive monthly maintenance fees if you maintain a minimum balance in your checking account. Be aware of the required balance and strive to keep your account balance above that threshold. However, this balance isn't low either, it can range from $500 to $1500 per month.
Direct deposit
Some banks offer fee waivers if you set up direct deposit into your checking account. This typically involves having your paycheck or a certain amount of money automatically deposited into your account each month.
Choose a fee-free checking account
Many banks offer fee-free checking accounts as part of their product lineup. Look for accounts with no monthly maintenance fees, and consider switching to one if your current account charges fees.
Use ATMs within your bank's network
To avoid ATM fees, use ATMs in your bank's network. Some banks also reimburse a certain number of non-network ATM fees monthly, so be aware of any reimbursement policies. Certain banks have a limit on the number of monthly reimbursements they make, so check the bank policy in advance.
Opt for electronic statements
Some banks charge fees for paper statements, while electronic statements are often provided for free. Opting for electronic statements not only helps the environment but can also save you money. Choose electronic statements to save on paper statement fees.
Set up overdraft protection
Overdraft fees can accumulate quickly. Consider setting up overdraft protection, linking your checking account to a savings account or a line of credit. This can help prevent overdrafts and associated fees.
Understand fee waiver criteria
Know the specific criteria for fee waivers at your bank. This could include maintaining a certain balance, using direct deposit, or meeting other requirements. Ensure that you fulfill these criteria to avoid fees. Some banks and credit unions specialize in fee-free or low-fee banking. Explore these options to find an account that suits your needs without charging excessive fees.
Regularly review your account
Periodically review your account activity and balance to avoid overdrawing and incurring overdraft fees. Stay aware of any changes in your bank's fee structure.
Negotiate with your bank
If you've been a loyal customer or have multiple accounts with the bank, consider negotiating with a representative to waive certain fees. Some banks may be willing to work with you, especially if you have a good relationship with them.
Compare banks
If your current bank's fees are consistently a concern, explore other banks in your area or online that may offer more favorable fee structures. If you have a good relationship with your bank or have multiple accounts with them, consider negotiating with a representative to waive certain fees.
Remember that fee structures can vary between banks, so it's essential to understand the terms and conditions of your specific checking account. Regularly monitoring your account and being proactive can help you avoid unnecessary fees and make the most of your banking relationship.
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- Affordable monthly payments
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Banks with no checking account fees
Ally Financial
Ally Financial is a diversified financial services company known primarily for its digital banking offerings. It operates as a bank holding company, providing an array of financial products and services to customers, both individuals and businesses. The company has a strong emphasis on customer-centric services and digital innovation, positioning itself as a user-friendly alternative to traditional brick-and-mortar banks.
Ally offers an Interest Checking Account with no monthly maintenance fee, no overdraft fees and no minimum deposit requirement. It pays an annual percentage yield of 0.25% in case of a minimum daily balance of $15,000 and 0.1% otherwise. It also offers access to 43,000 fee-free ATMs and reimburses up to $10 in a statement cycle for fees the are charged at the other ATMs across the country.
Capital One 360
Capital One is a well-known financial institution that offers a broad range of financial products and services to consumers, small businesses, and commercial clients. It is particularly famous for its credit card services, being one of the largest issuers in the United States. In addition to credit cards, Capital One provides banking services, including checking and savings accounts.
Capital One charges no fee for using its Capital One 360 checking account. It has a 0.1% APY, irrespective of the balance and gives access to over 70,000 Allpoint ATMs. It doesn’t have any overdraft fee, or foreign transaction fee. Capital One allows you to get access to your pay check early with the early pay check.
Discover Bank
Discover Bank is a prominent financial services institution, widely recognized for its Discover credit card and as a direct banking and payment services company. They offer a range of banking products, primarily focusing on direct-to-consumer services. Key offerings include savings accounts, checking accounts, personal loans, student loans, and home equity loans.
Discover Bank checking account comes with no fees and gives access to fee-free 60,000 ATMs. You can also get paid early with direct deposit and enjoy fee-free overdraft protection service. You can also send and receive money with Zelle and get 1% cash back on upto $3,000 worth of purchases in debit card each month. It has no minimum balance requirement, no fee for insufficient funds and no fee for check reorder or official bank check.
FAQs
How does a checking account differ from a savings account?
While both checking and savings accounts are types of deposit accounts, checking accounts are primarily used for everyday transactions, while savings accounts are designed for saving money and earning interest over time.
What documents do I need to open a checking account?
Requirements vary by bank, but generally, you'll need a form of identification (such as a driver's license or passport), proof of address, and your Social Security number. Some banks may also ask for proof of income.
What is overdraft protection?
Overdraft protection is a service offered by some banks to prevent overdrawing your account. It is often linked to a savings account or a line of credit, and if your checking account balance falls below zero, funds are transferred from the linked account to cover the shortfall, helping you avoid overdraft fees.
Can I have multiple checking accounts?
Yes, it is possible to open multiple checking accounts but understand the bank's policy and fee structure.
Can I earn interest on a checking account?
While traditional checking accounts typically don't offer high-interest rates, some banks provide interest-bearing checking accounts. These accounts may earn a small amount of interest, but it's generally lower than what you would earn in a savings account or other investment options.
Get up to $50,000 with a low, fixed rate loan
- Affordable monthly payments
- No prepayment fees
- Fast funding
- 9.99% to 35.99%
The bottom line
Checking accounts are essential tools for managing everyday transactions. While they provide convenient access to your money, it's crucial to be aware of potential fees and take proactive steps to avoid them. Choosing the right checking account, understanding fee structures, maintaining minimum balances, utilizing direct deposit, and monitoring your account regularly are key strategies to ensure a positive and cost-effective banking experience. Tailor your approach based on your financial needs, and stay informed about the terms and conditions of your specific checking account to make the most of your banking relationship.
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