Many financial institutions charge a monthly fee just for having an account. Often called “maintenance” or “service” fees, these charges tend to be most common with checking accounts, but some banks levy monthly fees for savings accounts as well.
Maintenance fees are also typically charged on top of other common bank fees, such as overdraft and ATM fees.
Depending on how closely you read your statements, you may or may not be aware of these monthly charges–or how much they can add up to each year.
Not all institutions charge maintenance fees, however. And, many banks will reduce or waive these fees if certain requirements are met, such as maintaining a certain balance or setting up direct deposit.
If you’d prefer to see your money grow (rather than shrink) while it’s in the bank, read on. Below, we break down what these common bank fees are for and how you may be able to avoid them.
What is a Monthly Maintenance Fee?
Banks often charge fees on personal and business checking accounts and sometimes even savings accounts to help them offset operational costs–or help to “maintain” your account.
Institutions may also charge these fees as a way to incentivise customers to make larger deposits. Many banks will waive fees if customers keep their balances high or use their account more frequently, all moves that benefit the bank.
Monthly maintenance fees are usually automatically withdrawn from a customer’s account each month.
How Much are Maintenance Fees?
While not all banks charge a monthly maintenance fee, many of the large financial institutions in the U.S. do charge monthly fees.
How much varies from one bank to another, but the average monthly maintenance fee for a checking account is currently around $13.95 per month, according to a recent MoneyRates.com survey.
While that may not seem like a lot of money when viewed as a one-time charge, it adds up to a whopping $167 per year.
Add in other fees–like for using an out-of-network ATM or overdrafting your account–and these surcharges can start to chip away at your hard-earned money.
Avoiding Account Maintenance Fees
Fortunately, there is often some wiggle room when it comes to maintenance fees. Here are some simple ways you may be able to minimize, or even completely avoid this type of account fee.
Choosing the Right Institution
Fees can vary quite a bit from one major US bank to another. Some charge $7 a month just for maintaining a checking account, while others charge $15 for the same exact service. For that reason, it can pay to do a little digging before you open a new account.
When comparing banks, it can be helpful to understand exactly what the monthly maintenance fee (if any) will be, and if there are any ways to avoid the fee.
Many banks will waive the monthly fee If you meet certain requirements. If you won’t be able to meet those conditions, however, you may want to keep shopping around.
Maintaining a Minimum Balance
Many institutions will waive the monthly account fee if you keep a certain amount of money in your account, known as a minimum balance.
That means If your average monthly balance dips below this amount, the maintenance fee would be triggered for that month and deducted from your account.
If your average monthly balance is above this threshold, the bank would waive the fee for that month.
Opening More than One Account
Many institutions will reward you for loyalty and waive monthly fees if you have multiple accounts with them, such as a savings account, money market account, or certificate of deposit (CD), in addition to a personal checking account.
In some cases, linking your accounts (such as a checking and a savings account) can help you meet the balance requirement to avoid the monthly maintenance fee.
Signing up for Direct Deposit
Many checking accounts are free when you elect to have your paycheck or benefits check automatically deposited into your account.
Each bank may have slightly different qualifying criteria. Some banks waive the maintenance fee if you make a certain number of direct deposits to your account each month, while others might require you to deposit a minimum dollar amount.
Recommended: How to Set Up Direct Deposit
Using Your Debit Card Frequently
You may want to find out if your financial institution waives checking account fees if you use the bank-issued debit card linked to the account to make purchases or bill payments a certain number of times per month.
This number will vary from one bank to another, but ten is often the number required to make fees disappear.
Banks are able to ease up on customer fees because they get paid transaction fees from the merchants.
Reading Your Bank Notifications
Your “free” checking account is only free until…it isn’t.
While it’s important to read your account agreement when you first open up an account (and make sure you understand the bank’s requirements to avoid fees), you may also want to keep in mind that your bank can change its rules at any time as long as it notifies you about the change in writing.
For that reason, it’s a good idea to read the notifications the bank sends (via email or snail mail) about changes to its terms and conditions.
This will allow you to keep up to date on what you need to do to avoid monthly service fees–before you start seeing these debts show up on your account.
Giving up an Interest-Bearing Checking Account
If you have an interest-bearing checking account with your bank, it may be worth checking to see whether you can avoid a monthly maintenance fee by switching to an interest-free account, and if this could actually help you come out ahead.
Today’s interest rates are so low that the interest you are earning on your checking account may not even cover the monthly service fee you are paying in order to have an interest or “rewards” checking account.
Considering an Online Bank or Credit Union
Because online-only banks typically have lower overhead expenses than brick-and-mortar institutions, they can be less likely to charge their customers monthly fees.
Credit Unions can be worth checking out as well. As nonprofit, member-owned institutions, credit unions typically aren’t as focused on the bottom line as for-profit banks. This enables them to charge lower rates on credit products and levy fewer (and lower) account fees compared to banks.
Asking About Student and Senior Discounts
Many banks will offer a break on monthly fees to students. So, if you are currently in school it can be worthwhile to ask if a discount is offered, what age group is covered, what proof you’ll need to show that you’re a student, and what types of schools are included.
Similarly banks may offer a lower fee or no monthly fee if you’re over a certain age, and qualify as what they consider a “senior.”
Signing up for Electronic Statements
You may be used to getting that statement in the mail and there is something to be said for having it handy, but is it worth paying a fee for?
Since financial institutions save money by not printing and mailing you a paper statement each month, they often pass that savings along by offering discounts to customers who agree to go paperless.
The discount is often a reduced or no monthly maintenance fee.
You don’t necessarily have to settle for high monthly checking account fees.
Many financial institutions will waive monthly fees if you maintain a certain balance, make a minimum number of purchases with your debit card each month, or sign up for direct deposit.
Another way to avoid paying monthly fees is to consider going with a checking and savings account, such as SoFi Checking and Savings®.
SoFi Checking and Savings allows you to earn competitive interest, save, and spend all in one account. And SoFi Checking and Savings doesn’t have any account fees, monthly fees, or many other common fees.
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