What Are Checking Account Monthly Maintenance Fees?

Quick Answer

A monthly maintenance fee is a charge you may have to pay each month for having an account open at a specific financial institution. There are ways to avoid checking account monthly maintenance fees, including checking your bank’s rules for exemption requirements or switching banks.

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If you have a checking or savings account, you may be familiar with the fees many banks and credit unions charge. Typically known as monthly maintenance fees or monthly service fees, these charges can easily add up and even wipe out any interest the account earns. If you meet certain requirements, however, your bank may agree to waive them.

Here's what to know about monthly account fees and how to avoid them.

What Are Monthly Maintenance Fees?

A bank or credit union may charge a monthly maintenance fee in order to keep your checking account or savings account open. Not every financial institution charges these fees—and the ones that do may not apply the charges to every type of account.

For instance, banks may charge lower service fees on basic checking accounts and higher fees on accounts that pay interest. The fee amount varies at every financial institution, but it typically ranges from about $5 to $35 a month. Some accounts may come with no fees at all.

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Why Do Banks Charge Monthly Maintenance Fees?

Financial institutions may charge monthly maintenance fees to pay for its operating costs and help increase profits. So you're more likely to see these fees at for-profit brick-and-mortar institutions that have branches to maintain. The opposite is true for online financial institutions: With less overhead and staffing expenses, they pass on some of those savings to customers in the form of free bank accounts.

And because credit unions are not-for-profit, they're more likely to offer fee-free checking accounts or charge lower fees compared to banks.

How to Avoid Monthly Maintenance Fees

If your bank account comes with a monthly maintenance fee, here are some options for avoiding this cost:

Set Up Direct Deposit

Some checking accounts will waive the service fee when you set up direct deposits. Qualifying deposits usually include employer paychecks, pension payments or Social Security benefits that are electronically deposited into your account. You may also be able to make your own deposit each statement period. Some banks and credit unions require a minimum amount of direct deposits per month, so make sure yours will qualify.

Keep the Required Minimum Balance

Another way to avoid monthly fees is by keeping a certain amount of cash in your bank account. Financial institutions call this your minimum daily balance. If you want to use this option to avoid the fee, read the rules on how your bank calculates your balance. For instance, the bank may look at the balance at the beginning of each day or take the average balance across several accounts you have at the same institution.

Get a Different Account at the Same Bank

Many banks and credit unions offer several types of checking accounts and savings accounts to choose from. So one of your bank's checking or savings accounts may charge a monthly fee, while another account may not. Consider switching to a no-fee account at the same bank if you're happy with the customer service, banking tools, branch location and ATMs you have access to.

Check the Rules

You may be able to get around monthly service fees without setting up direct deposit or maintaining a minimum balance. For instance, some banks don't charge monthly service fees to military members, those who meet age requirements or employees of partnering businesses.

Look for relationship banking too. For instance, your bank may forgive checking account fees for customers who have a credit card or another type of account with the bank. Additionally, some financial institutions offer rewards programs that provide exclusive benefits and discounts. So when you reach qualifying status, you may be able to waive fees associated with your account.

Switch Banks

Maintaining a minimum balance can be difficult, especially if you pay bills and make purchases from the funds in your bank account. You might have to pay the fee one month because your balance drops below a certain amount or your direct deposit doesn't meet requirements.

In that case, you might consider switching to another bank or credit union that doesn't charge monthly maintenance fees. It could be worthwhile even if it's a hassle to switch direct deposits, move automatic bill payments and get new debit cards.

Banks must disclose account-related costs upfront, so ask for the schedule of service charges and fees for the account you're researching. Review this information to see which fees you may incur and whether you can avoid them. Then consider whether you can meet those requirements.

You Don't Have to Pay Bank Fees

Some banks and credit unions charge monthly maintenance fees just for keeping a checking or savings account open. There are usually ways to avoid these fees, but it usually entails tracking your balance, setting up direct deposit or meeting other requirements.

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