About Ken Tumin

Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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How To Keep Your Checking Accounts Free


How To Keep Your Checking Accounts Free

Free checking is becoming harder to find especially at the large banks. This was one of the findings mentioned by this Bankrate checking survey:

Just 45 percent of noninterest checking accounts are free of maintenance charges, down from 65 percent in 2010. That number peaked at 76 percent two years ago.

The article mentions two regulations that have pushed banks into adding fees. In addition to the Durbin Amendment which caps debit card interchange fees, there's also the new overdraft rule that took effect in 2010. Based on that rule, banks are not allowed to charge consumers for overdrafts on ATM or one-time debit card transactions unless the consumer opts in for the overdraft service. In the September 2011 issue of Money Magazine, they had a graph showing the estimated revenue lost by 2013 from the various regulations. The regulation causing the largest revenue loss was this overdraft opt-in rule. The loss was $23 billion. The loss from the Durbin Amendment was estimated at $6 billion.

Another thing to note from the article is that banks are providing more ways to have the monthly fees waived. However, that doesn't mean it will become easier to avoid the fees. As we have seen at several of the large banks, it's becoming harder to avoid monthly fees.

Earlier this month Wells Fargo notified its California and Nevada customers of checking account changes that take effect November 14th. For some checking accounts, it will require larger balances to avoid monthly fees.

Bank of America and Citibank are also phasing in similar checking account changes which will make it harder for customers to avoid monthly fees.

Avoiding Checking Account Fees

If you find that your current checking account at one of these large banks will no longer be free, you may be able to change to another checking account that makes it easier for you to have the monthly fees waived. Another option is to change banks.

Several internet banks offer free interest checking accounts. In February I reviewed a few internet banks that offer paper checks. Many of these also offer ATM surcharge refunds.

If you want to have a local checking account, many credit unions offer free checking. As I described in my 2010 blog post Resources to Help You Support Your Local Credit Unions, many credit unions are part of a shared branch network and ATM networks that can make a small credit union as convenient as a large bank.

Reward checking accounts can also be a good option even for those who don't care about interest rates. The vast majority of reward checking accounts are free checking accounts with no monthly service charges even if the customer fails to meet the debit card purchase requirements. The debit card usage is only required if you want the high interest rate or if you want ATM fee refunds. Reward checking accounts are primarily offered by community banks and credit unions. Please refer to my post, 10 Common Traits of High-Yield Reward Checking Accounts, for more reward checking account details.

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Julio   |     |   Comment #1
I have a BoA checking and savings account and was able to get their highest tier accounts paying the most favorable rates (if you can call it that) free of all monthly fees because I also happen to have my mortgage with them.  If you have a mortgage or other type of loan, it may be worthwhile to check with that bank or cu to see if they allow you to link the accounts to meet the minimums.
me1004   |     |   Comment #2
The best general rule of thumb is to stay away from the big banks. They are generally the biggest gougers. Oh, there are exceptions tot he rule, but those exceptions are few and far between -- and becoming fewer. 

Instead, go to a small bank -- they typically provide much better service (although there are exceptions to that rule, too). Or, as Ken suggests, try a credit union that is part of the shared branch system (even if the credit union you join is not near you, a shared branch at another credit union certainly will be); credit unions are typically more customer oriented (although again, there are exceptions to that rule).
jshannon   |     |   Comment #3
How To Keep Your Checking Accounts Free (by jshannon)

Close all pay accounts and only open free accounts.

The End.
Anonymous   |     |   Comment #6
Very interesting that these 3 big banks who are raising fees - Bank of America, Wells Fargo, and Citi, were just downgraded by Moodys. These 3 banks played a big part in the recession by lending to unqualified mortgage buyers.

..."the U.S. government is getting less comfortable with bailing out large troubled lenders.
The government is "more likely now than during the financial crisis to allow a large bank to fail should it become financially troubled," the ratings agency said."

Ref: http://www.moneynews.com/FinanceNews/bank-america-moodys-wells/2011/09/21/id/411820 and numerous other news websites.
Jeanne   |     |   Comment #7
So far, so good with Union Bank's free checking ($100 min, and no minimum usage or fees on debit card). Cross fingers.
IGLESIAS   |     |   Comment #9
Anonymous   |     |   Comment #10
wher is comment 8
Anonymous   |     |   Comment #11
The big banks are dead meat that should have been allowed to fail. It takes over a week to transfer money btween accounts in the same branch. They are issuing warning letters (such as if you use an onine vendor, heavens, it must be suspicious because their fellow weasels won't find work) and fees inconsistently and cluelessly all over again. Their average staff is at least twenty IQ points lower than they have any right to be. Don't blame them entirely, they have been bludgeoned endlessly by regulators, they are clueless. They scurry about with mindless business trying to stay alive while pretending to work. Universal banking should only have been allowed if they started from scratch, not by merger. These guys are clueless as to how to integrate these things, because they have so many wierd pieces which will never fit together. If you employ anoyone who used to work at a big bank, you should get fired.
J.G.   |     |   Comment #12
Today came the latest stage of this ongoing saga. Sen. Durbin's calculations are correct, but what is his point?  He accuses Wells Fargo of attempting to make a profit, "[i]nstead of making up costs."  Is Wells Fargo supposed to charge for its services just enough to cover its expenses?  What about its shareholders' interests?


But what Sen. Durbin doesn't mention in his letter is that the lost profits from interchange fees that Wells Fargo is now looking for ways to make up for have not actually disappeared into thin air, nor are they being passed on to consumers. Far from it. The $7 billion or so in annual interchange fees that the Durbin Amendment is costing issuers, are now being collected by retailers and most of it – by big-box stores (e.g. Wal-Mart and Target). It is up to them alone to pass any portion of the windfall on to consumers. If you believe that this will happen, well, I have a news for you.


The bottom line is that we are now suffering through the entirely predictable side effects of the Durbin Amendment's passing, for which everyone who was paying attention warned when it was first proposed.  Sen. Durbin should stop bullying businesses for acting in their shareholders’ best interests.  http://blog.unibulmerchantservices.com/why-are-banks-charging-new-debit-card-fees