In the world of personal finance, checking account fees are a fairly common occurrence. Between maintenance fees, low balance fees, fees for overdrawing your account, or ATM fees, banks have figured out all sorts of ways to charge you for things you might not even be aware of until after the fact.
The good news is that with a few simple tips and a little bit of education, you can say goodbye to checking account fees forever. So, how do you avoid checking account fees?
In short, the best way to avoid checking account fees is to open an account that doesn’t charge any fees in the first place. In particular, when opening a ‘no-fee checking account’ you should look for benefits like: no minimum balance requirement, no monthly maintenance fees, no overdraft fees, and unlimited ATM reimbursements.
Like any area of personal finance, it is in your best interest to do your due-diligence, read the fine-print, and make sure you know what you’re signing up for when you open a checking account.
And that’s exactly why I put together this guide of the top 10 ways to avoid checking account fees.
So, if you’re ready to kick them to the curb, and finally live the fee-free lifestyle, keep reading!
1. Switch To A No-Fee Checking Account
As I mentioned earlier, the best way to avoid checking account fees is to switch to a ‘no-fee checking account’. There are all sorts of options out there, but you still need to be careful. As you might suspect, just because a bank calls an account “no-fee” doesn’t mean you can just do whatever you want.
Every financial institution has rules, and you need to make sure to follow them closely.
If you’re looking for a great no-fee checking account, we recommend the Axos Bank Essential Checking account. With no minimum balance requirements, no maintenance fees, no overdraft fees, and unlimited domestic ATM reimbursements, their account “checks” all the boxes. (Sorry for the bad pun) Additionally, with their Direct Deposit Express feature, you can get access to your paycheck up to 2 days earlier than most traditional checking accounts offer (we really like this feature).
2. Meet The Minimum Balance Requirement
If you don’t like the idea of opening an entirely new checking account, but you still want to avoid those nasty fees, then your top priority should be to maintain the required minimum balance.
In my experience, most banks require a minimum daily balance of $100, but you should check with your bank or credit union to make absolutely sure.
After all, the last thing you need when your checking account gets a little low is a low balance fee. So, be sure to keep your balance above the required minimum if you want to live a fee-free lifestyle.
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3. Don’t Overdraw Your Account
I have overdrawn my checking account twice in my life, and both times it was because I made a mistake and transferred too much money into savings before one of my bills had come out. You’d think one time would be enough for me to learn, but you’d be wrong.
What I did learn is that banks don’t care whether or not it was a mistake, or even if you transferred the overdrawn money back the very next day. They just take their fee and apologize for the inconvenience when you ask them to refund it. (Just another reason to switch to a no-fee checking account)
Seriously though, if you want to avoid checking account fees, don’t ever overdraw your account. Sure, you might have a friendly bank that is willing to forgive you for an accidental savings transfer, but why even take the risk?
4. Open A Savings Account At The Same Bank
Here at Be The Budget, we often recommend opening a savings account at a different bank than your checking account, because it can help you save more money. By isolating your savings, it keeps your money out of sight, and thus, less tempting to spend on an impulse. And, while this rule is a great way to save up for emergencies, or big expenditures like a down payment or a car, if you use that as your sole savings account, you can end up getting hit with checking account fees.
That’s why, if you’re going to open a checking account with a particular financial institution, we almost always recommend setting up a savings account as well. Even if you barely ever use the savings account, and opt for your isolated savings account instead, this is a great way to avoid checking account fees.
5. Enroll In Direct Deposit
If you are employed, one of the easiest ways to avoid checking account fees is to have your paycheck direct deposited into your checking account. Many banks will eliminate their monthly maintenance fee if you complete this one step, and since you are employed, this is an incredibly simple way to live fee-free.
The one thing I will say about this method, however, is that if you ever lose your job, and your direct deposit stops, you will need to figure out a different way to avoid fees. I think we can all agree that there is never a worse time for checking account fees than right after you get fired.
That’s a day-ruiner.
6. Use Your Debit Card More Often
If you are the kind of person that likes to make every purchase on a credit card, then it might be time to make the switch to your debit card. For one, you won’t be taking on the risk of high-interest debt, and two, by swiping your debit card more often, you may be able to avoid those pesky checking account fees.
Seriously, many banks will eliminate their monthly maintenance fee if you use your debit card a certain number of times each month.
No debt, and no fees? That sounds like a winner to me!
7. Set Low Balance Alerts
One of the best parts about modern-day banking, is that many banks will allow you to set low balance alerts. So, whether you are trying to avoid fees for dipping below your minimum daily balance requirement, or just trying to avoid overdraft fees, these alerts can play a big role in avoiding fees.
8. Live On A Budget
In addition to all the hacks and tips in this article, one of the best ways to avoid monthly checking account fees is to live on a well-defined budget. I mean, you can set alerts, do your best to avoid dipping below your minimum balance, and every other tip in the book, but I don’t think there is anything that can replace the value of a good budget.
Think about it like this, if you know where every dollar of your income is going each month, do you really think you’re going to get hit with a surprise checking account fee? NO WAY!
A good budget is the best defense against checking account fees–except, of course, a no-fee checking account.
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9. Be Careful Of ATMs
These days, ATMs are becoming less and less of a necessity. I mean, what is this, the 90’s? It’s called a debit card, and you can use it just about anywhere.
That said, there are certain times when you just need to grab some cash. Whether you’re going on a vacation and want to be able to leave a few tips here and there, or you just like to carry around a couple bills in your wallet at all times, an ATM is still the easiest solution.
However, if your checking account doesn’t reimburse you for ATM fees, then you could end up paying a little more than you bargained for the next time you grab some dough.
Moral of the story? Be sure to check with your bank and find out which ATMs you can and can’t use. Otherwise, you could end up paying money for your money. Now that’s a strange concept.
10. Check Your Bank Account Daily
Similar to budgeting, one of the best ways to avoid checking account fees is to just check your bank account daily. Honestly, this is just a good personal finance habit to adopt.
Keeping a daily eye on your checking account will help you avoid fees, spot suspicious activity, and just manage your money better.
So, there you have it: 10 simple ways to avoid checking account fees. Did I miss anything? If so, be sure to comment below and include the steps you take to avoid checking account fees.
Also, if you are interested in opening a no-fee checking account, be sure to check out the Axos Essential Checking. It is our #1 recommended checking account, and our favorite way to say goodbye to fees.