Checking accounts offer fast and easy access to money, but huge fees may be incurred from account maintenance fees to the infamous and expensive overdraft fee. These fees can add up if you're not careful.
Checking account holders incur fees of $9.87 per month on average, or $118 annually, according to the Consumer Financial Protection Bureau CFPB. This number doubles to $29.09 per month for customers who face certain fees such as overdraft charges.
To get the most benefit from checking account, one must be familiarised with all the fees for both penalties and normal use. Below are five common fees and tips on how you can avoid them:
Meeting the minimum balance requirement
Before opening an account with the bank make sure to learn about the minimum balance requirement so as not to fall behind. Various financial institutions carry different fees. The customers can dodge monthly fees by maintaining a minimum balance in their accounts.
For basic checking accounts at national banks, the minimum requirement is around $1,500 and for private banks that offer higher interest, it can go up to $10,000
Having two or more accounts at the same bank can help avoid service charges
Banks usually forgive fees on checking accounts for relationship customers who carry savings account, money market account, certificate of deposit, or a business account in addition to a checking account.
This is the best method to avoid fees if your combined balance from multiple accounts at the bank exceeds a certain threshold. In addition to helping a customer avoid monthly service charges, opening a savings account and linking it to checking account can avoid incurring overdraft fees, which can be as high as $38.
Finding a bank that won’t charge monthly fees
Another best method to learn about the financial institutions that charge zero or minimum fees is by researching and reading reviews on BankQuality.com Customers can access BankQuality.com for reviews on different financial institutions to help them choose a bank or credit union which meets their requirements.
The internet makes switching banks much less hassle than it used to be. To switch to a new bank, fill up an account application, transfer funds, and complete all the other steps to open a new account online. Make sure not to hit with an early account closure fee when leaving the current financial institution, which can happen if the customer close an account within a few months of opening it.
Signing up for direct deposit
One of the easiest ways to eliminate checking account fees is by establishing direct deposits. A service through which your paycheck, pension, or Social Security benefit is regularly paid into your bank account automatically.
Many banks require a minimum monthly amount in “qualifying” direct deposits from an employer, corporation, or government entity and this can be a hassle-free method to avoid the monthly fees.
Utilising the debit card to its full potential
A few banks and credit unions waive monthly service fees for customers who use a debit card linked to the account a certain number of times each month, usually around 10 transactions. The bank gets paid transaction fees from the merchants instead of charging you a monthly service fee.
Customer doesn’t have to settle for a checking account that charges monthly fees. There are some tips to help customer waive those charges. In fact, some 5,000 federal banks in the United States will offer accounts with little or no fees.
The internet has also bridged the gap between consumers and financial institutions so one can always view the desired bank or credit union online and gain complete knowledge about it.
Before opening an account, make sure to read the bank’s fee schedule and communicate with the representative to understand the bank in a better manner. Use BankQuality to find accounts that suit customers’ needs.