Avoiding Chase Bank Checking Account Monthly Fees

In the last few months we have been learning of the new monthly fees at Chase Bank and the new rules that make avoiding them harder. The easiest way to avoid monthly maintenance fees at Chase is to switch to internet banks, community banks or credit unions which offer real free checking accounts. Don't forget that the vast majority of reward checking accounts are also free checking accounts. However, in my last post on Chase Bank, several readers noted some reasons why they still want to keep their Chase checking accounts. One reader praised Chase's ACH system and bill pay:

I still bank with Chase, they have the fastest ACH system around and no holds on the funds like Ally does. Bill pay is almost immediately paid and no wait or scheduling needed.

Another reader mentioned Chase QuickPay and QuickDeposit:

There are actually a couple of features of Chase's checking account that I would like, namely their remote deposit and direct person-person payments...

In addition to those who like some of Chase Bank's services, there's also the issue of the extra work that's required to switch banks. One reader lamented the reason he hasn't switched:

The thought of untangling all my electronic payments / bill pay is the only thing holding me back

For those staying with Chase, you will have to be more careful to avoid fees. As I mentioned in my last post, Chase's new fee policy has taken effect, and it applies to both new and existing checking accounts. This change was also noted in this Sunday USA Today article.

Easy Alternative to Direct Deposit

Customers used to be able to avoid the monthly service charge by having direct deposit of any amount. Now customers need to have monthly direct deposit of at least $500. One direct deposit must be at least $500. Multiple smaller direct deposits that add up to over $500 don't qualify. The USA Today article described how this affected one person:

Amilivia, a part-time worker at Target, receives several direct deposits to her account each month that together total more than $500. But under Chase's new rules, that didn't matter.

A question that readers have asked is whether the direct deposit really needs to be a direct deposit from an employer. Will an ACH transfer initiated at another bank qualify? A friend has confirmed that he was able to avoid the $12 monthly fee by initiating a $510 ACH transfer from his Discover Bank savings account. He said he added an extra $10 to make it look less suspicious, but I doubt that's necessary. I can't say if this will always work, but Chase does appear to have a history of allowing ACH transfers to meet the direct deposit requirements. One reader commented in the last post that Ally ACH transfers were used to fulfill the direct deposit requirement at Chase.

So if you want to avoid Chase Bank's monthly fees, the ACH transfer option appears to work at least for now. This will require that you have another bank account where it's easy to initiate ACH transfers. The savings accounts at Discover Bank and Ally Bank are both good options. They have no monthly fees, and they make it easy to initiate ACH transfers. In addition, they pay interest with rates much higher than what you can get with a Chase savings account. One advantage of Ally over Discover is that Ally also offers a free interest checking account. If you open this checking account, you may quickly find that you don't really need that Chase checking account after all.