If you want to open a checking account with a well-known bank, you should expect to pay a lot of different fees, especially when you’re low on cash. There is usually a fee for having a low balance, for overdrafts, ATM withdrawals, and more. What many people don’t know is that there are quite a few banks with no fees out there – you just need to know where to look.
This article will present you with some recommended banks with no fees and some other banks which do charge a fee but are still worth checking out.
Three Banks with Lowest Fees
Ally Interest Checking
This bank offers .1% interest on your balance. It also does not require a minimum balance, so there are no minimum balance fees. Other benefits of Ally include:
- Reimbursement of out-of-network ATM fees ($10 limit per month)
- No-fee transfers from your money market or savings
- Access to free ATMs in 40,000 locations
With free transfers from other money sources, you can top up your checking account balance. For instance, if your debit card is denied, you know you need to transfer money to your account from a savings account or a money market account. There is no fee for that, and you don’t have the automatic overdraft fee to pay. Any check or automatic draft will be returned for insufficient funds though. Naturally, you still have to make sure that your overall balance in all your accounts is positive.
Schwab Bank High Yield Investor Checking
This bank uses a linked brokerage account to ensure you have enough funds in your checking account. You can open both a brokerage and a checking account with no required minimum balance. If your bank account runs out of money, it will automatically draw on your brokerage account – until that is empty. Other perks include:
- Get refunds on out-of-network ATM use
- .06% interest on your balance
- Overdrafts draw from brokerage account
As with Ally, you will still have the insufficient funds fees if you spend everything in both accounts.
Not as many people have heard of this bank, but it has some great features:
- Out-of-network ATM reimbursement
- .25% interest on balances under $2500
- Debit card refusal if you have an insufficient balance
This is not a bank without fees. You will have a $33 overdraft fee for bounced checks or insufficient funds for scheduled payments, however, they say that if this only happens occasionally, they might waive the fee. Also, with Aspiration Summit, you have to submit your email address and wait for an invitation to open an account and it can take one or two weeks. Their fee structure is quite unique as they let you make contributions only if you want to, rather than paying fees. You can read more about it on their website: https://support.aspiration.com/hc/en-us/articles/200989324-What-are-Aspiration-s-fees-What-is-Pay-What-Is-Fair-
If you are looking for banks with no fees, you probably know how painful it can be to get hit by an unexpected overdraft fee. The banks make you pay a fee for not having enough cash, which leads to having even less of it! This may seem not fair at first, however, the banks consider it to be a high-risk loan since they lend you money which you wouldn’t have access to otherwise.
Overdraft might seem like a good solution for times when you just need cash now but our advice is to be aware of the problems with going into overdraft frequently before you use this option.
Problems with Overdrafting
1. Opting out of overdraft protection is easy to miss
Most banks offer overdraft protection but you usually have to sign up for it. If you are not the one to thoroughly read contracts before you sign them, you may have inadvertently signed up for overdraft protection when you opened your account. That would explain why you get an extra charge when your bank covers an insufficient funds purchase. You’re not alone – over 50% of account owners don’t realize they have opted in to overdraft protection.
2. Overdraft protection is just too convenient.
The biggest problem with overdraft protection is that it allows you to keep using your debit card, even if your account is out of money. If you don’t keep a close eye on your expenses, before you know it, you are hit with massive fees from your bank.
3. Be aware of your bank’s overdraft protection policy
Most banks charge $35 for each insufficient-fund purchase – which is taken out of your already negative balance bank account. While this does keep you from having to cover hot checks with different vendors, it will wreck you financially if you use your debit card for most purchases. There are banks which have better charges for overdrafts, you can compare them here: how much can I overdraft my checking account
Eventually, overdraft happens due to a mismatch between your expenses and your paycheck. This mismatch can usually be avoided by better managing your finances and recurring expenses. How do you it? Well, there’s an app for that! Check out our coverage of overdraft protection solutions
More Punitive Bank Fees
Overdraft fees are not the only charges that can drain your bank account or future deposits. Some banks charge a minimum balance fee. So, if your account drops down below, say, $100, you get charged $5 for your balance being so low. Makes sense, right?
Another way they get you is with out-of-network ATM fees. These are the ATM machines at the mall or shopping center that work for everyone’s bank card. Yeah, you can get charged – by your own bank – for using your own money – at one of these upstart ATM machines.
Monthly maintenance fees can gouge your account for $20 a month. You might have $500 in the bank, never spend a dime, but still find yourself paying overdraft fees after their maintenance fee depletes your balance!
One common way to get around this is to consider opening a free online checking account: Free online checking account with no deposit