Sometimes free checking really is not free. Hidden fees are everywhere, from ATM surcharges to overdraft fees. Many banks offer checking accounts that they claim are free but will add on hefty charges later. Luckily, there are ways to avoid accruing these charges. Here are some ways to avoid checking account fees.
Make sure you always meet the minimum balance requirement for your account. Find out what your checking accounts minimum balance requirement is and take measures to never go below it. Some free checking accounts will require you to have hundreds of dollars in your account at all times. If your balance slips below that number, you are charged with a fee. Banks like to make sure that you keep your money with them, so implementing high minimum balance requirements is one way that can do that.
Get direct deposit. Some banks will waive the minimum balance requirement if you set up a direct deposit. If you get a steady check from your employer, sponsoring agency or even from a friend, you can have your bank set up a direct deposit. With direct deposit, the funds will be drafted from the payer’s bank and put directly into your checking account. The reason your bank wants you to set this up is that direct deposit helps keep money in your account and in the bank.
Cancel your overdraft protection. Most banks will offer overdraft protection. However, since the Electronic Fund Transfer Act, customers are allowed to decide whether or not they want it. While it may sound like a good deal, overdraft protection is rarely worth it. Sure, the bank will cover the purchase if you do not have the funds, but they will charge you a big fee for it. In addition, you will still need to pay the non-sufficient funds, or NSF fees, too. You are better off monitoring your account balance carefully and making sure you do not overdraft.
Check if you can get a discount. Are you are student? A senior citizen? Active military or a veteran? If you are any of these, you may qualify for a discount at your bank. Some banks offer special accounts for these demographics that have lower monthly fees. Other banks will give you the same account as the rest of the public, but will waive the fees. The next time you are in your bank, check with a teller if there are any special discounts you are eligible for.
Switch banks. If you have tried to find ways to avoid paying hefty fees but have been unsuccessful because your bank just keeps tacking more and more on, then it may be time to switch banks. Research other banks that are close by if you are looking for a brick and mortar bank. Compare interest rates and fee schedules. Also look at minimum balance requirements for the different accounts that they offer.
Do your banking online. If you do not need to bank at an institution that you can walk in to, then look online for banks as well. Online banks have no physical branches and can pass on more savings to customers. Since they do not have to pay to run and maintain an actual branch, it costs online banks less to do business. Also, some traditional banks offer accounts that are solely online. These accounts tend to have no or lowered account balance requirements and no monthly fees.
Utilize your credit cards. If you find that your checking account is getting low and you are in danger or over drafting, you can use your credit card to pay for things you need immediately. This should only be used as a last resort since using credit cards can be costly as well. Since you are not seeing the money actually being spent, it is very easy to over spend with a credit card. Make sure you only charge things you really need and never spend more than you have.
Free checking accounts sound good, but often times have hidden fees you were unaware of. Make sure you keep your account above the minimum required balance, never over draft and look for special discounts or fee waivers. By taking these measures, you can help yourself avoid costly checking account fees.