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How to Avoid Monthly Checking Account Fees

Banking, Banking Basics, Banks & Credit Unions, Savings Accounts
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ways to avoid bank fees

Few of us enjoy reviewing our bank statements, and for good reason: “I spent how much on takeout this month?” “When’s the last time we even watched that channel?” “Maybe I should just quit the gym already.” It can be a sobering and downright frustrating experience.

Perhaps even more maddening is seeing that your bank hits you with checking account fees for “maintenance.” This is the price you pay just to park your cash in a safe place, and it can add up to more than $100 a year.

But you might be able to avoid paying a monthly service fee by meeting one of the following requirements. Better yet, they’re pretty reasonable.

Meet the minimum balance requirement

Fees and rules vary by institution, but customers at most banks and credit unions can dodge monthly charges by keeping their balance above a certain amount. For basic checking accounts at national banks that don’t earn interest or other perks, that figure tends to be around $1,500. For premier accounts, it may be as much as $10,000.

If you can’t meet that mark today, you can make moves to bolster your balance. Approach this as you would any other savings goal.

“Put aside $25 per week, or whatever you can reasonably save, until you meet your goal,” says Carrie Houchins-Witt, a financial advisor in Coralville, Iowa. “Keep saving that $25 each week until you have a cushion. That way, you won’t have to worry daily about dipping below the minimum and getting hit with fees.”

» MORE: NerdWallet’s best checking accounts

Enroll in direct deposit

Another way to avoid fees is to enroll in direct deposit, a service through which your paycheck or some other money you receive regularly is paid into your bank account automatically. Some banks and credit unions will require you to receive a certain amount of money in direct deposits each month, typically not more than $500 for basic checking accounts. If that applies to you, don’t distribute your income to more than one account.

“If you’re splitting your direct deposit between two accounts, like checking and saving, you may never meet the minimum,” says Johanna Fox Turner, a financial advisor in Mayfield, Kentucky. “But you can set up your direct deposit so that your entire income goes to your checking account, and then simply transfer some of that money to your savings each month.”

Open a savings account at the same institution

A bank or credit union also might waive fees for customers who have multiple accounts under the same roof. For most people, opening a savings account will be the easiest solution.

In addition to helping you avoid monthly service charges, opening a savings account and linking it to your checking account can protect you from incurring overdraft fees, which can be as high as $38.

Switch to plastic

A few banks and credit unions waive monthly service fees for customers who use a debit card linked to the account a certain number of times each month, usually around 10 transactions. If you’re having trouble meeting some of the other waiver requirements, consider finding a financial institution that cancels fees for frequent debit card users.

Look for free checking elsewhere

Another option, of course, would be to simply ditch your bank or credit union for one that offers free checking. Just make sure that you won’t be hit with an early account closure fee when leaving your current financial institution, which can happen if you close your account within a few months of opening it.

But if you like your bank or credit union and just want to eliminate fees, these moves can help you avoid paying them.

Tony Armstrong is a staff writer at NerdWallet, a personal finance website. Email: tony@nerdwallet.com. Twitter: @tonystrongarm

Updated March 21, 2017.