Bank fees have been getting higher for everything from overdrafts to ATM fees, but one area that has really climbed in recent years is the fee charged just to have a checking account. In fact, since 2009, the percentage of U.S. checking accounts that were "free" has dropped from 76% to just 38%.
Source: flickr/ 401(k) 2012.
Now, I can understand charging for those other things. For example, if you use an ATM owned by another bank, you can reasonably expect to pay a few dollars for the convenience. If the bank covers an overdraft, even though the fee can be excessive, you're at least getting some type of service for your money.
However, most major banks charge between $10 and $20 per month to simply maintain a checking account. In other words, you could pay more than $200 per year just for the "privilege" of having an account.
I don't like paying fees at all, but I really don't like just giving money away without getting anything in return, and checking account fees are a great example. Fortunately, there is still such a thing as a free checking account, even at the big banks, if you know what to look for.
There are usually ways to get out of the fee
Most banks give account holders a few options to get out of paying monthly account fees. Some common qualifications are direct deposits and minimum balance requirements, but some banks have other creative options. Still, there should be a way to get out of it. According to a recent survey by Bankrate, 97% of checking accounts were either free or could become free if certain requirements are met.
The requirements for a direct deposit waiver and minimum balance requirement vary from bank to bank. For example, Bank of America's Core Checking account will waive its $12 monthly fee with a minimum direct deposit amount of $250 per statement cycle, while Wells Fargo requires total direct deposits of $500 in its Everyday Checking account. If you don't have direct deposit, both of these accounts will waive the fee with a $1,500 minimum daily balance.
Another example is TD Bank's Convenience Checking account, which doesn't have a direct deposit waiver but requires just a $100 minimum balance to avoid the $15 monthly fee. So the best way for you to avoid fees depends on your own situation and how much money you keep in your checking account.
There are other ways to get out of fees at certain institutions. Some will automatically waive account fees for college students, or for anyone under a certain age. Some will waive the fee simply for making a lot of debit card purchases.
Or, look locally
If you can't find a way to get out of the fees at one of the big banks, it may be a good idea to look to local banks or credit unions, which tend to offer sweeter deals to attract business.
Many of these charge fees but offer customers more options to get out of them. For example, this credit union has six different options to waive the account fee and charges just $5 per month to those who don't qualify.
And if you look hard enough, you can find some that still offer completely free checking accounts, like this example from a Florida credit union.
The downside to these accounts is the reduced convenience, especially if there isn't a branch location or an ATM close by, but the savings could definitely be worth the trade-off.
It's a fee you should never have to pay
While a fee of $12 per month doesn't sound like much, even that can add up to nearly $150 per year that you shouldn't need to pay. There is almost always a way to get out of paying the fee, and it could be as easy as choosing to use direct deposit or keeping a little more cash in your account.
And if you can't get out of it, another institution with better terms, like a local bank or credit union, would be happy to have your business.
The bottom line is that you need to make the effort to find an account that's going to work for you and bypass the ones that are going to nickel and dime you each month.
