Ethan Riley
Banks are for-profit institutions that primarily make money by charging their customers fees and interest. Monthly maintenance fees are a common source of revenue for banks, but not all banks charge them. Monthly maintenance fees are more common among traditional banks than online banks and credit unions. Banks that do charge monthly fees often provide a way to get the fee waived, such as by maintaining a minimum balance or setting up direct deposits.
| Characteristics | Values |
|---|---|
| Do all banks charge a monthly fee? | No, not all banks charge a monthly fee. |
| Banks that do not charge a monthly fee | Credit unions, Ally Bank, Chase Bank (for students), Bank of America (for students under 25 and account holders under 18), Citi's Basic Banking (for customers under 18 or over 62), CIBC Bank (in six states), TD Bank Complete Checking (if certain conditions are met) |
| Conditions to waive off the monthly fee | Maintaining a minimum balance, setting up direct deposits, linking checking and savings accounts, signing up for a premium account, having multiple accounts with the bank, maintaining a certain average daily balance |
| Other common bank fees | Wire transfers, bounced checks, ATM fees, foreign transaction fees, paper statements, replacement cards, overdraft fees, non-sufficient funds fees |
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What You'll Learn
Monthly maintenance fees
It is important to note that monthly maintenance fees are not the only charges associated with bank accounts. Other common fees include overdraft fees, non-sufficient funds (NSF) fees, ATM fees, wire transfer fees, and charges for additional services such as replacement cards, paper statements, and stop payments. Some banks also charge foreign transaction fees when customers use their debit cards or withdraw cash from ATMs outside of the country.
To avoid or minimise fees, it is essential to understand the fee structure of your bank and the specific requirements to waive charges. Additionally, consider shopping around for a bank account that aligns with your financial circumstances and needs. Many banks offer fee-free accounts or low-cost options for specific groups, such as students or seniors.
By being proactive and informed about bank fees, individuals can effectively manage their finances and minimise the impact of monthly maintenance fees and other associated charges.
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Waiving fees
Banks and credit unions may charge a monthly maintenance or service fee, but they usually don't if certain requirements are met. These requirements may include:
- Maintaining a minimum balance in your account. For example, Wells Fargo waives its $10 monthly fee if you maintain a daily balance of at least $500.
- Setting up direct deposits. Some banks require a minimum number of direct deposits per month, while others only require that you enroll in direct deposit.
- Having multiple accounts with the bank. Some banks will waive fees if you have a mortgage and a linked checking account, or if you maintain a minimum aggregate balance across multiple accounts.
- Using a bank-issued debit card for purchases or bill payments a certain number of times per month. Typically, ten transactions are required.
- Being a student or senior citizen. For example, Chase offers a no-fee account for customers aged 17 to 24 who can provide proof of student status.
- Choosing a credit union or online-only bank. Credit unions typically have lower fees than traditional banks, while online banks often charge fewer fees due to having lower overhead costs.
It's important to carefully review the terms and conditions of your account to understand the specific requirements for waiving fees. Additionally, banks are required to disclose any fees and explain how they can be avoided when you open an account.
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Online banks
While most banks charge a monthly fee for their services, not all banks and accounts charge a monthly fee. Some banks are "no-fee or minimum banks", meaning they are completely free. Some banks waive the monthly fee if certain requirements are met, such as setting up direct deposits or maintaining a minimum balance.
BMO also offers a Smart Advantage Checking Account with no monthly maintenance fee, providing customers with the flexibility to bank from anywhere using their digital tools. This account encourages paperless statements by waiving the monthly fee for paper statements if customers opt for digital banking.
Chase offers an account with no monthly maintenance fee for students aged 17 to 24 who can provide proof of student status. This account has no minimum opening deposit but charges fees if the average daily balance falls below $5,000.
Citi's Basic Banking account removes its monthly service fee for customers who make a qualifying direct deposit and maintain a combined average monthly balance of $1,500. This account provides free usage of over 65,000 ATMs but does not offer out-of-network reimbursement.
Overall, while some online banks offer accounts with no monthly fees, it is important to consider the features and requirements of each account to determine the best option for your needs.
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Credit unions
Banks and credit unions can charge a monthly maintenance or service fee, but this varies. Some banks are "no-fee or minimum banks", which means they are completely free. Others will charge a monthly fee or require a minimum account balance. Banks and credit unions must tell you upfront what the fees are and how you can avoid paying them.
Some credit unions offer free personal accounts and free e-transfers. They may also offer low-cost checking accounts, such as senior or student accounts, with a low minimum balance and a limited number of free checks and withdrawals.
Ultimately, the decision between choosing a bank or a credit union depends on your personal preferences and financial circumstances.
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Foreign transaction fees
These fees are imposed by financial institutions, including banks and credit card issuers, and they can consist of two parts: the network fee (or currency conversion fee) charged by the card network, such as Visa or Mastercard; and the issuing bank fee, charged by the card issuer, such as Bank of America or Wells Fargo. It's important to note that foreign transaction fees are separate from currency conversion fees and may be incurred in addition to them.
Not all cards charge foreign transaction fees. Some credit card companies offer cards with no foreign transaction fees, such as Mastercard, Citibank, and Capital One. Discover, Charles Schwab Checking, and Capital One 360 are global financial institutions that also do not charge foreign transaction fees for debit or credit card purchases. Additionally, some banks offer accounts with no foreign transaction fees, such as Ally Bank, which provides a free ATM network and reimbursement for out-of-network ATM withdrawals.
If you plan to travel or make international purchases, it is worth researching cards and accounts that waive foreign transaction fees to avoid unexpected charges.
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Frequently asked questions
No, not all banks charge a monthly fee. Some banks are "no fee or minimum banks", meaning they are completely free.
A monthly maintenance fee is a charge for banking with a company. It is one of the many revenue sources for banks. Monthly maintenance fees are more common among national and regional traditional banks.
Monthly maintenance fees typically range from $5 to $25, depending on the type of account and the financial institution.
Many banks will waive the fee if you meet certain requirements, such as maintaining a minimum daily balance, setting up recurring direct deposits, or signing up for a premium or top-tier account.
