Financial institutions and retail banks offer checking accounts, also known as a demand accounts or transactional accounts, to allow account holders to access money using checks, cash withdrawals, automated teller machines (ATM), or electronic debit cards. It simplifies the transactions for individuals with its accessibility and automated deposits, payments, and withdrawals. However, some banks charge their account holders a checking fee for their checking accounts. These fees may range from $4 to $20, it varies depending on the bank and nature of checking account.
MyBankTracker, a website that provides financial services and aids to consumers, conducted a survey in 2017 concerning the checking account usage in the United States. They found that 13,347 or roughly 67% of 21,186 respondents had less than $1,000 available in their checking accounts. Moreover, the data showed that Americans contributed an approximate $3.5 billion in monthly service fees to the top U.S. banks – Bank of America, Citibank, Wells Fargo, Chase, and U.S. Bank. Additionally, the average monthly fee for checking accounts of multinational banks is $10.99 a month, while the minimum maintenance balance to waive the checking fee is $1,500.
Avoiding Bank Fees
Generally, the primary way to avoid monthly bank fees is to maintain the required minimum balance in your accounts. The minimum balance requirement of most banks in the United States for standard checking accounts is anywhere from $100 to $1,500. Additionally, account holders can waive fees through the following methods:
- Direct Deposits – direct deposit is the electronic transfer deposit from an employer or benefits provider (social security or pension) to the account of the recipient. Many banks will waive monthly fees if the account holder makes a certain number of regular deposits.
- Debit Card Purchase – account holders can often waive monthly fees by making a certain number of purchases or payments using their bank issued debit cards.
- Customer Age – many banks do not charge fees to customers under the age of 21. However, once they attain the legal age, financial institutions will require payment on their accounts. Some banks offer a variety of checking account especially for teens with provision from an adult.
- Overdraft Protection – banks have mechanisms in place to prevent account holders from spending more money than they have. Those mechanisms often require hefty fees, though. The best way to avoid them is to opt out of overdraft protection and to link your checking account with a savings account or line of credit to cover any instances of overdraft.
Comparing Two Banking Options
The question becomes, is it really possible to use banking services in the United States without paying checking account fees. We will now take a closer look at two banking options to see what consumers face. The traditional bank, Wells Fargo, offers services similar to its main competitors and charges a variety of fees to do so. The modern non-traditional banking account, Chime, offers the same kinds of services but does so without fees or brick and mortar locations.
A Closer Look At Chime Accounts
Chime offers an alternative to traditional banking. These accounts operate entirely online. There are no brick and mortar locations. As a result, there is virtually no overhead for Chime to operate. This equates to no fees for account holders. Customers can open both checking and savings accounts. They can make deposits, do online bill pay, transfer funds, check balances, and budget their finances all online. Chime also issues Visa debit cards for customer use. Chime offers an online platform as well as an award winning mobile banking app. So account holders can access their accounts any time and from anywhere.
Chime has no minimum opening deposit, no monthly maintenance fees, no minimum balance requirement, no overdraft fees (charges are simply declined if they would put an account in the negative), no ATM fees (for in-network withdrawals), and no card replacement fees. There are no hidden fees either.
A Closer Look At Wells Fargo Accounts
Wells Fargo offers five different personal checking accounts to its account holders — Opportunity Checking, Everyday Checking, Teen Checking, Preferred Checking, and Portfolio. All types of Wells Fargo checking account require a minimum of $25 deposit to open and conditions to waive the checking account fees.
This checking account comes with online banking where account holders can view their balances, transfer funds, and statements online. They also have free access to the Wells Fargo Online Banking with BillPay and My Spending Report with Budget Watch to track their finances and expenditure. Wells Fargo also offers a platinum debit card for everyday purchases and bill payment for participating retail shops and providers online or via smartphones and tablets. Account holders also get free access to Wells Fargo branches and ATMs nationwide. Opportunity Checking guarantees a zero liability protection for unauthorized debit transactions, 24/7 fraud monitoring, account alerts for low balances and suspicious activities, and a debit card with a unique security code for fraud protection.
The Opportunity Checking is best for lower account balances with the lowest monthly service fee, and individuals who are unable to open standard accounts. The minimum opening deposit for Opportunity Checking is $25, while the monthly service fee is $10. However, account holders can waive the monthly service fee during each period with:
- A minimum daily balance of $1500, or
- Direct deposit with a sum of at least $500, or
- At least ten debit card payments which include purchases using signature, PIN, online, and phone or mobile wallet. Wells Fargo does not include ATM and ACH (Automated Clearing House) in debit card transactions.
Everyday Checking is suitable for a variety of customers including college students from 17 to 24 years old with low account balances. It offers online bill payments and transfers, mobile deposit, security-enhanced chip platinum debit card, text banking, budgeting, expenditure, and cash flow tools, 24/7 customer service, text banking, and access to ATMs. Everyday Checking also includes Wells Fargo Mobile where account holders can check their balance, pay bills, or transfer money through smartphones and tablets via the Wells Fargo Mobile application. Moreover, the members can send money to anyone with a bank account from the United States without sharing their account numbers.
The minimum opening deposit for Everyday Checking is $25, and the monthly service fee is $10. To waive the fee, account holders have the option to do one of the following each statement period:
- The principal account holder is 17-24 years old. Wells Fargo will impose the standard monthly fee on the 25th birthday of the account holder, or
- A minimum of $1,500 daily balance, or
- At least ten debit card purchases and payments, or
- A total of at least $500 direct deposit from pension, social security, or salary, or
- A linked Wells Fargo Campus Debit Card or ATM for college students.
Wells Fargo offers a Teen Checking account for adolescent individuals from ages 13 to 17 (ages 13 to 18 in Alabama) with an adult account co-owner. It allows teens to spend money using their debit cards or ATMs independently with the proper guidance of their parents in withdrawals and purchases. Some benefits that Teen Checking holds for its primary owners are 24/7 online access to manage their accounts, accessibility of money management tools to develop their budgeting skills, and an online alert and notification via text message or email. Parents have the ability to evaluate the account activities of their child, transfer funds from their account to their child’s, and to enroll in the optional Overdraft Protection from their Wells Fargo savings account to avoid unintended overdrafts.
There is a $15 overdraft fee for every deficiency on Teen Checking account. The minimum initial deposit to open a Teen Checking account is $25, but there is no monthly service fee.
Preferred Checking is appropriate for customers who want to earn interest, who maintain higher account balances, and Wells Fargo Home Mortgage holders. Account holders can earn interest with a balance of at least $500 in their checking accounts and can receive a discount of $10 on personal style checks. It comes with a security-enhanced chip platinum debit card, 24/7 customer service, online bill payments and transfers, mobile deposit, tools for the budget, expenditure, and cash flow, and text banking.
There is a minimum $25 initial deposit to open a Preferred Checking account and a $15 monthly service fee. Wells Fargo can waive the charge if the account holders meet one of the following during the statement period:
- A total of $10,000 in minimum deposit balances, or
- A sum of at least $1,000 direct deposits from social security, salary, and pension, or
- A connected Wells Fargo Home Mortgage.
This type of checking account is designed for customers who carry high balances. It has an interest rate discount on personal loans, home equity credit (subject to approval), and auto loans. It also comes with a personal credit card from Wells Fargo Visa, chip technology-enhanced platinum debit card, and an annual relationship bonus for Wells Fargo Propel World American Express Card. The Portfolio Account has no monthly maintenance fee for secondary linked accounts, no fee for bank services including Wells Fargo Personal Wallet checks, Overdraft Protection advance fee, and money orders. There are also added benefits, particularly for customers with a total qualifying balances of at least $250,000 or the Wells Fargo Plus holders such as waived fees for services, reimbursement of ATM fees, and no Overdraft Protection transfer fee.
The minimum initial deposit for opening a Portfolio Account is $25, and there is a monthly service fee of $30. Wells Fargo can waive the service fee if the customer meets one of the following requirements during the statement period:
- At least $25,000 in qualifying connected bank deposit accounts, or
- At least $50,000 qualifying linked brokerage, credit, and bank balances.
Can Those Pesky Fees Be Avoided?
It appears that there is a way to avoid fees associated with checking accounts. One way is to follow the advice of always maintaining a positive balance in your account. Even if you do so, though, you could still be hit with some other hidden fees from your traditional bank. Another option is to open a non-traditional banking account with Chime. With this type of account, you will never have to worry about a negative balance or about hidden fees. There simply are none.