Maintaining a checking or savings account is a fundamental aspect of managing personal finances. However, many banks charge monthly maintenance fees, which can erode your account balance over time.
If left unchecked, these fees can add up to a substantial amount and make it challenging to achieve your financial goals. In this article, we will explore what monthly maintenance fees are, why banks charge them, and how you can avoid them. We will also provide tips on choosing the right bank and account to help you save money and achieve your financial objectives.
What are monthly maintenance fees?
Many banks charge their customers a monthly maintenance fee to keep their checking or savings accounts open. Fees may range from a few dollars to more than $20, depending on the bank and the kind of account the customer holds.
Why do banks charge monthly maintenance fees?
Banks charge monthly maintenance fees to cover the cost of keeping their customers’ accounts up-and-running. This includes expenses such as processing transactions, maintaining digital banking systems, and other administrative expenses. It’s also a way for them to generate revenue and help offset some of the costs associated with providing banking services.
How to Avoid Monthly Maintenance Fees
Monthly maintenance fees can be a significant expense for account holders, especially if they are not aware of the requirements to avoid them. Fortunately, there are several ways to avoid these fees and keep your money in your account. Here are some tips:
Choose the Right Bank
- Look for a fee-free account: Some banks offer fee-free checking or savings accounts, which can help you avoid a monthly maintenance fee altogether. When searching for a bank, consider comparing their account offerings and fees to find one that fits your needs.
- Read the account disclosures: Before opening an account, read the account disclosures thoroughly to understand the fees and requirements associated with the account. This will help you avoid any surprise charges that may be incurred.
Meet the Bank’s Requirements
- Keep a certain account balance: Many banks require account holders to maintain a minimum daily balance to avoid the monthly fee. If your account balance falls below the required amount, you may be charged a fee. Ensure you understand the minimum balance requirements and try to maintain the minimum balance to avoid the monthly fees.
- Set up direct deposits: Some banks offer fee waivers if you receive a certain amount of direct deposits each month. Consider setting up a direct deposit with your employer or transferring funds from another account to meet the requirement.
- Hold multiple accounts: Some banks offer fee waivers to customers who hold multiple accounts with them. If you have other accounts, such as a credit card or mortgage, consider opening a checking or savings account with the same bank to qualify for fee waivers.
- Be in a specific age range: Some banks offer fee waivers for account holders who fall within a specific age range, such as students or seniors. Check with your bank to see if they offer fee waivers for your age range.
Monthly Maintenance Fees of 22 Financial Institutions
Here’s an overview of the monthly maintenance fees charged by popular banks and credit unions to help you make an educated decision on which bank and account will suit your needs best.
| Financial Institution | Checking Account | Savings Account |
|---|---|---|
| Alliant Credit Union | $0 | $0 |
| Ally Bank | $0 | $0 |
| Bank of America | $0 – $4.95 | $8 |
| BMO Harris Bank | $0 – $25 | $0 |
| Capital One 360 | $0 | $0 |
| Charles Schwab | $0 | $0 |
| Chase | $0 – $25 | $0 – $5 |
| Chime | $0 | $0 |
| Citibank | $0 – $25 | $0 – $25 |
| Connexus Credit Union | $0 | $0 |
| Discover Bank | $0 | $0 |
| Fifth Third Bank | $0 – $25 | $0 – $5 |
| Huntington Bank | $0 – $25 | $0 – $4 |
| KeyBank | $0 – $25 | $4 – $25 |
| Navy Federal Credit Union | $0 – $10 | $0 |
| PNC Bank | $0 – $7 | $0 – $5 |
| Regions Bank | $0 – $18 | $0 – $5 |
| TD Bank | $0 – $25 | $0 – $5 |
| Truist | $0 – $12 | $0 – $5 |
| U.S. Bank | $0 – $6.95 | $0 – $4 |
| Wells Fargo | $0 – $10 | $0 – $12 |
What are other common fees that banks charge?
When choosing a bank, it’s important to be aware of the fees they charge. While some banks may offer fee-free accounts, others may charge fees for various services. Here are some common fees that banks charge:
- Overdraft fees: If you exceed the balance in your account, you may be hit with an overdraft fee of up to $35 per transaction.
- ATM fees: When you use an ATM outside your bank’s network, you could be charged a fee both by the ATM owner and your bank. ATM fees typically range from $2 to $5 per transaction.
- Wire transfer fees: If you need to send money to someone quickly, you may use a wire transfer. However, banks often charge a fee for this service, which can be as high as $30.
- Foreign transaction fees: When you use your card outside the U.S., you will likely be charged a foreign transaction fee, which is often a percentage of the total transaction.
- Account closing fees: If you decide to close your account, some banks may charge you a fee for doing so. This fee can be as high as $25.
To avoid these unexpected fees, it’s critical to review the fine print of your potential bank account and select one that best suits your financial goals.
Bottom Line
The costs associated with having a bank account can vary widely, depending on the type of account you open and the bank or credit union you choose. For example, certain banks may require that you maintain a certain balance or make a certain number of transactions to avoid paying a monthly maintenance fee.
Fortunately, there is a simpler way to dodge these charges: open a checking or savings account with a bank that doesn’t charge monthly fees. You can open an account with many online banks in a matter of minutes.
Frequently Asked Questions
Which banking products have monthly maintenance fees?
Monthly maintenance fees are generally associated with checking and savings accounts, but products such as certificates of deposit (CDs) tend to be exempt from this charge. However, it is important to be aware of the other fees and penalties that come with CDs so that you can avoid them.
What are the requirements to avoid monthly maintenance fees?
The requirements to avoid paying a monthly maintenance fee vary depending on the bank and the account. Common requirements include maintaining a certain minimum balance, making a minimum number of monthly transactions, or setting up direct deposit. Some accounts may also waive the fee if you meet certain age or income requirements.
How can I find a fee-free account?
To find a fee-free account, start by researching different banks and their account offerings. Look for accounts that explicitly state they have no monthly fees, or look for fee waivers based on meeting certain requirements. You can also consult a banking professional to help you find a fee-free account.
How do I know if a bank charges a monthly service fee?
Banks must include all fees associated with their accounts, such as monthly service fees, in the terms and conditions. To find out more about fees, you can research the account details online or phone the bank’s customer service operatives for further information.
What is the average monthly maintenance fee?
The average monthly maintenance fee varies by bank and account type. Some banks may charge as little as $5 per month, while others may charge upwards of $25 or more per month.
Can I avoid monthly fees if I don’t meet the bank’s requirements?
If you don’t meet the requirements to avoid monthly maintenance fees, you may still be able to avoid them by switching to a different account or banking institution. Additionally, some banks may provide discounts or waivers for certain customers, such as students or seniors. It may also be possible to bargain with your bank to have the fee waived or reduced.
