How to Avoid Common Checking Account Fees
Nobody opens a checking account expecting to pay for the privilege of using it, yet fees are one of the most common complaints new account holders have — mostly because the triggers for those fees aren’t always obvious until after one shows up.
The short answer
Most checking account fees fall into a small number of categories: monthly maintenance fees, overdraft fees, and out-of-network ATM fees. Nearly all of them can be avoided, or at least significantly reduced, once an account holder understands the specific conditions that trigger each one. Banks are generally required to disclose these fees and their triggers in an account’s terms, which makes them predictable rather than random, even though it doesn’t always feel that way in the moment.
Monthly maintenance fees
Many checking accounts charge a flat monthly fee just for keeping the account open, though this fee is frequently waivable. Common ways to waive it include maintaining a minimum balance, receiving a qualifying direct deposit each cycle, or being a student or account holder under a certain age. Some banks avoid the fee structure altogether by offering no monthly fee on any of their checking products, which is worth comparing when choosing a first bank account.
- Set up direct deposit. Many banks waive the monthly fee automatically once qualifying deposits post each cycle.
- Track the balance requirement. Knowing whether the rule is a daily minimum or an average makes it easier to avoid dipping below it.
- Consider a fee-free account type. Comparing online banks and traditional banks often turns up options with no maintenance fee at all.
Overdraft fees
An overdraft happens when a transaction is approved despite the account not having enough funds to cover it, and the fee attached to that event tends to be one of the largest a checking account charges. A few habits reduce the odds of this happening:
- Turn on low-balance alerts. Most banks and budgeting apps can send a notification before a balance gets uncomfortably low.
- Opt out of overdraft coverage for debit purchases. Declining coverage for everyday debit card transactions means a purchase is simply declined rather than approved into a negative balance.
- Link a backup account. Some banks offer automatic transfers from a savings account to cover a shortfall, often at little or no cost compared to a standard overdraft fee.
- Set up automatic transfers. Moving money between checking and savings on a schedule keeps a buffer in place before it’s needed.
Out-of-network ATM fees
Withdrawing cash from an ATM outside a bank’s network often triggers two separate charges: one from the account holder’s own bank, and a second surcharge from the ATM’s owner. This is one of the easier fees to sidestep entirely, since it only applies when a specific machine is used. Using a bank’s mobile app to locate in-network ATMs, choosing cash back at a retail checkout, or banking somewhere with a large surcharge-free network are all common workarounds. Some online banks also reimburse ATM fees up to a certain amount each month, which is worth checking when comparing accounts.
Other fees worth knowing
A few less common fees are still worth watching for on a monthly statement: fees for paper statements, fees for closing an account too soon after opening it, and fees for wire transfers or replacement debit cards. None of these come up as often as the three above, but they’re easy to overlook precisely because they’re infrequent.
What to weigh
Avoiding checking account fees mostly comes down to reading the account’s fee schedule once and building a couple of habits around it — setting up direct deposit, watching the balance, and knowing which ATMs are in-network. The accounts that make this easiest are often the ones with the fewest fee categories to begin with, which is worth factoring into the choice of bank alongside customer service and account features.