Taylor Scott
Banks charge fees for various reasons, and while some banks charge a monthly maintenance fee, others do not. Monthly maintenance fees, also known as monthly service fees, are charged by banks and credit unions for account upkeep. These fees can be avoided by choosing a fee-free or no-fee checking account or meeting specific requirements, such as maintaining a minimum daily balance, setting up direct deposits, or linking multiple accounts. Some banks also offer accounts with low minimum balance requirements and low or no fees, such as student accounts. It is important to carefully review the terms and conditions of different banks and account types to understand the associated fees and requirements.
Banks Charging Maintenance Fees
| Characteristics | Values |
|---|---|
| Banks Charging Maintenance Fees | Bank of America, TD Bank, Chase, Citi, Capital One |
| Banks Not Charging Maintenance Fees | Ally Bank, SoFi Checking and Savings, CIBC Bank |
| Fee Waiver | Maintaining a minimum balance, direct deposits, linking checking and savings accounts, age (students and seniors) |
| Other Fees | Overdraft fees, ATM fees, foreign transaction fees, paper statement fees, wire transfer fees, replacement card fees, non-sufficient funds fees |
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What You'll Learn
Some banks don't charge monthly maintenance fees
Not all banks charge a monthly maintenance fee. Many banks and credit unions offer accounts with no monthly maintenance fees, no minimum balance requirements, and low initial deposits. Some banks may offer these accounts with certain conditions, such as setting up direct deposits or maintaining a minimum balance.
For example, Chase offers a no-fee account for customers aged 17 to 24 who can provide proof of student status. This account has no minimum opening deposit but does charge fees if regular electronic deposits are not set up or if the average daily balance falls below $5,000. Bank of America also offers a similar no-fee account for students under 25 and all account holders under 18. Additionally, their Advantage Plus account waives the monthly fee for those with a qualifying direct deposit of at least $250 or a minimum daily balance of $1,500.
Other banks that offer accounts with no monthly maintenance fees include Ally Bank, Citi, Axos Bank, SoFi, and Schwab. These banks may have certain conditions or requirements for their no-fee accounts, so it is important to review their terms carefully.
Credit unions, in particular, are known for typically not charging fees simply for having an account. For example, Capital One Credit Union and Alliant Credit Union are recommended options for no-fee checking accounts. However, it's important to note that some credit unions may have recently introduced a minimum balance requirement to waive fees.
Overall, while some banks do charge monthly maintenance fees, there are also many banks and credit unions that offer accounts with no monthly fees, providing flexibility and accessibility for their customers.
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Fee avoidance methods
While not all banks charge a monthly maintenance fee, it is a common practice. Luckily, there are several methods to avoid these charges and keep your account fee-free.
Firstly, many banks waive monthly maintenance fees if you maintain a specific minimum balance in your account. For example, Bank of America waives its $12 monthly fee if you maintain a daily balance of at least $1,500 or set up direct deposits of $250 or more each month. Setting up account alerts can help you monitor your balance and avoid dipping below the threshold.
Secondly, direct deposits can also help you avoid maintenance fees. Many banks, including Bank of America, Citi, and Chase, waive fees if you set up regular direct deposits to your account. This method often requires you to make a qualifying direct deposit and bill payment per month.
Thirdly, consider switching to online banks or credit unions, which often offer accounts with no monthly fees. Online banking operates without physical branches, passing the savings on to customers in the form of fee-free accounts. Some examples include Ally Bank and Capital One 360, which provide free checking accounts with no hidden fees and even reimburse out-of-network ATM fees.
Additionally, bundling your checking and savings accounts at the same bank can help you avoid monthly service fees. Many banks will waive these fees if you link your accounts and maintain a combined minimum balance.
Lastly, some banks offer accounts with no monthly maintenance fees for specific customer segments, such as students or senior citizens. For instance, Chase offers a fee-free account for customers aged 17 to 24 who can provide proof of student status, while Bank of America provides a similar option for students under 25 and all account holders under 18.
By employing these strategies, you can effectively reduce or eliminate monthly maintenance fees and maintain more of your money in your accounts.
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Account types with different fees
Banks and credit unions can charge a monthly maintenance fee, but this varies depending on the type of account. Some accounts are exempt from monthly fees, while others have specific requirements to waive the fee. Here are some account types with different fee structures:
- Standard Checking Accounts: These are traditional bank accounts that allow you to write checks, use ATMs, pay bills, and make purchases with a debit card. Standard checking accounts typically don't earn interest and may come with a monthly service fee. They usually have lower minimum balance requirements compared to premium accounts.
- Premium Checking Accounts: Premium or high-tier accounts often have higher minimum balance requirements, sometimes in the range of $10,000 or more. In exchange for maintaining a high balance, the bank may waive the monthly maintenance fee, offer interest on the balance, or provide discounts on other banking services.
- Student Accounts: Some banks offer special accounts for students, which typically have no monthly maintenance fees. For example, Chase offers a student account with no monthly fees for customers aged 17 to 24 who can provide proof of student status. Similarly, Bank of America's SafeBalance Banking® account has no monthly fee for students under 25 and all account holders under 18.
- Senior Citizen Accounts: Certain banks may offer accounts specifically for senior citizens with no or reduced monthly fees. For example, Citi's Basic Banking account waives the monthly service fee for customers under 18 or over 62.
- Direct Deposit Accounts: Many banks and credit unions waive monthly maintenance fees for accounts that receive direct deposits of paychecks or benefit checks. This encourages customers to use direct deposit and can be a way to avoid fees.
- Online-Only Checking Accounts: These accounts are offered by banks that don't have physical branch locations. Since the bank has lower overhead costs, online-only accounts often have fewer fees and may offer higher interest rates compared to traditional bank accounts.
- No-Fee Accounts: Some banks offer accounts with no monthly maintenance fees, no minimum balance requirements, and low initial deposit amounts. For example, CIBC Bank offers a no-monthly-fee account with a $50 opening deposit, although it does not earn interest.
It's important to carefully review the terms and conditions of different account types to understand their fee structures. Additionally, some banks may be willing to negotiate or waive certain fees, so it's worth contacting your bank to discuss your options.
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Foreign transaction fees
To avoid foreign transaction fees, it is worth researching credit cards that do not charge these fees, such as the Chase Sapphire Preferred® Card, Bank of America® Travel Rewards credit card, and the Capital One Venture Rewards Credit Card.
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Paper statement fees
Banks are required to provide customers with bank statements for any period in which an electronic funds transfer was made. This includes instances where you swiped your debit card, made an ATM withdrawal, or paid a bill from your account. However, banks are increasingly moving towards digital statements and charging customers a fee for receiving paper statements.
Credit card companies have also started charging extra fees for paper statements, with some retailers imposing a fee of $1.99 for those who wish to continue receiving paper statements. Synchrony Bank, for example, has introduced this fee for its co-branded and store-affiliated credit cards, including the Sam's Club Credit Card, the Lowe's Store Card, and the Amazon Store Card. Citibank has also informed its customers that going paperless is now required to access their accounts on digital platforms.
While there is no federal law banning paper statement fees in the United States, two states, New York and Pennsylvania, have passed laws prohibiting companies from charging for paper statements. In New York, while companies cannot charge extra for paper statements, they are allowed to offer incentives for opting out of them. Pennsylvania's law specifically prohibits public utility companies from charging a fee for a paper bill or invoice, including energy, water, wastewater, and telecommunications utilities.
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Frequently asked questions
No, not all banks charge a maintenance fee. Some banks will waive the fee if you meet certain requirements, such as maintaining a minimum balance or setting up direct deposits.
You can avoid bank maintenance fees by choosing a fee-free or no-fee checking account, or by meeting certain requirements such as maintaining a minimum daily balance or setting up recurring direct deposits.
Some banks that do not charge monthly maintenance fees include Ally Bank, SoFi Checking and Savings, Chase, and Bank of America.
