A checking account can go a long way towards having ownership and taking control of your finances, especially when you open a free account. The best checking accounts can be easy and convenient, with features that help you better manage your money. A bank account can also help you build your banking history and improve your chances of getting a loan.
Before opening a free checking account, it pays to understand the pros and cons. While many banks and credit unions promise fee-free banking, some requirements come along with nearly every type of account. Understanding both the benefits and the requirements of a free bank account can help you find the right account to meet your needs and gain control of your financial future.
The Pros and Cons of Free Checking
Today, many banks and credit unions offer a wide variety of products and services. With all the options available, how do you know which bank account is right for you? Before you decide to open a free checking account, weigh the pros and cons to see if it meets your everyday banking needs.
Opening a bank account gives you control over your money. You can use your checking account to set up direct deposits, manage bills, make payments, and more.
Mobile and online banking
Many free checking accounts allow you to manage your money with just a few clicks anywhere, anytime. A mobile app and online banking makes staying on top of your finances easy.
With some accounts, you can take advantage of a wide ATM network or use any ATM that’s convenient to you for free or with fees waived. Some credit unions, like Marine, have Smart ATMs that offer additional services, as well.
Perks, rewards, and benefits
Some free checking accounts may offer more perks and benefits, such as free checks, cash back on debit card purchases, or a high interest rate or annual percentage yield (APY).
Opening a bank account gives you more control over your money. You can use your checking account to set up direct deposits, manage bills, make payments, and more. Many free checking accounts also allow you to manage your money with just a few clicks anywhere, anytime — a mobile app and online banking make staying on top of your finances easy.
With some accounts, you can take advantage of a wide ATM network or use any ATM that’s convenient to you. Sometimes ATM use is free and sometimes the fees are waived. Some free checking accounts also offer additional perks and benefits, such as free checks, cash back on debit card purchases, or a high-interest rate or annual percentage yield (APY).
The cons of a free checking account:
Monthly maintenance fees
Many banks charge a monthly maintenance fee on their accounts. Be sure to understand these fees or what’s required to avoid them.
Minimum balance requirements
In some cases, banks charge a minimum balance fee, which you’ll incur if your checking account balance falls below a certain amount. Some banks have high minimum balance requirements to open or maintain a free account, so always ask about these fees.
Minimum transaction requirements
Some banks require you to make a certain number of debit card purchases or other transactions to meet the account requirements. Compare accounts and their rules to see which account is best for you and your everyday banking.
What to Watch Out for when looking for the Best Checking Accounts
Free checking accounts often promise fee-free banking, but what may not be clear is that sometimes fees — even on free accounts — are unavoidable.
Many banks charge monthly maintenance fees, require a minimum balance, or ask you to meet a threshold of activity, like making a certain number of debit card transactions. Some banks also charge ATM fees for ATM transactions outside of their network. Before you open a checking account, it’s important to make sure you understand the requirements associated with your account.
Monthly maintenance fees and other account fees can add up to a big expense. That’s why it pays to find a checking account that’s best for your everyday banking needs.
Checking Fees to be Aware of
Many “free” accounts can end up costing you money if you don’t meet certain requirements. Here are some of the common checking account fees you might encounter, along with options to avoid them.
Monthly maintenance fees
Many banks charge a monthly maintenance fee on their accounts. In some cases, this may be called a minimum balance fee, which you’ll be charged if your checking account balance falls below a certain amount in a monthly statement period.
How to avoid it: There are some banks that don’t charge a maintenance fee or they have low minimum balance requirements. If there is a monthly maintenance fee, some banks will waive the fee if you have a direct deposit attached to your account. Be aware, however, that your direct deposit may need to exceed a certain dollar amount.
Banks charge an overdraft fee when you create a negative balance in your account, and the bank covers the transaction. For example, you might make a debit card purchase for more than is available in your account, and that will trigger an overdraft fee. Overdrafts on your account may also lead to sustained overdraft fees, which are charged after your account remains negative for a certain period of time.
How to avoid it: Planning and budgeting are the best ways to manage your spending and avoid overdrafts. You can also manage your account by using online or mobile banking to keep an eye on your balance, transactions, and more.
Many banks offer overdraft options, like enrolling in debit card overdraft protection. If you plan to enroll in overdraft protection, ask how much the bank charges if you make a transaction that takes your account negative.
Savings overdraft protection is also an option at some banks. With savings overdraft protection, you can use a linked savings account or money market account to fund a transaction that would take your checking account balance negative. This type of overdraft may cost less than other overdraft charges.
Marine Credit Union offers added protection against overdrafts with CoverIt, a program with unlimited access to a $50 grace zone that lets you go a little under on your account without incurring fees.
It’s common to incur a charge for using an out-of-network ATM. Know which ATMs are in or out of network for your bank, and ask how much it will cost you to withdraw money from an out-of-network ATM.
How to avoid it: Banks with a large or convenient ATM network help you avoid ATM fees. Some banks will waive or reimburse some or all out-of-network ATM fees. You can also look for alternative ways to withdraw money from your account, like selecting cash back when you make a debit card transaction at the grocery store or pharmacy. Keep in mind that there are usually limits to how much cash back you can receive, just like there are limits on ATM withdrawals.
Paper statement fees
Many banks charge a fee if you want to receive a paper statement in the mail.
How to avoid it: In our digital world, there are a lot of alternatives to paper statements. Most banks offer a mobile app and online banking that puts account management at your fingertips.
Marine Credit Union’s Mobile App and Online Banking offer a faster, easier banking experience with digital banking tools that help you set and manage savings goals, view your spending habits, set up auto-pay, make transfers, and more.
Yes, there are many checking accounts that offer fee-free banking. Just be sure you understand the requirements you may need to meet to best manage your account and avoid or minimize fees.
What are the benefits of a free checking account?
The best free checking accounts offer a lot of benefits, like a free debit card, direct deposit, access to online and mobile banking, and free ATM transactions or reimbursement of ATM fees. Some accounts even offer an annual percentage yield (APY) that pays interest on your account balance, which can be an added perk of maintaining a checking account.
What should I watch out for with a free checking account?
Many “free” accounts can end up costing you money if you don’t meet certain requirements. Some of the most common checking account fees to watch out for include monthly maintenance fees or minimum balance fees, overdraft fees, ATM fees, and paper statement fees.
What should I expect when opening a checking account?
In most cases, you can count on it taking less than half an hour to open a checking account. Sometimes, the account opening process may take longer (for example, if you have a credit freeze on your credit file and the bank needs to contact a credit bureau during the account opening process).
What do I need to provide when I open a new checking account?
The requirements for account opening vary from bank to bank and credit union to credit union. Some of the items you might need to provide when opening a new checking account include:
Your legal name
Your government-issued photo ID
Your Social Security number or tax identification number
Your date of birth
Your address and phone number
An initial opening deposit
Can I open a bank account online with no money?
Yes, some banks and credit unions will allow you to open a checking account online without an initial deposit. However, you usually need to fund the account within a certain period of time. For example, Marine Credit Union requires that an account opened online be funded within 30 days.
Other banks may ask you to fund an initial deposit immediately. This can often be done electronically from another existing account, and will require you to provide a routing number and account number.
What kind of bank account fees can I expect?
Some of the most common fees you might encounter—even with a free checking account—include monthly maintenance fees, minimum balance fees, overdraft fees, ATM fees, and paper statement fees. Many banks and credit unions give you an opportunity to avoid these fees by maintaining a minimum balance, having direct deposit, or meeting a certain threshold of account activity.
How can I avoid checking account fees?
It is possible to avoid some of the fees you’ll commonly find attached to a checking account. Many banks and credit unions offer checking accounts that waive a monthly fee if you maintain a minimum balance, have direct deposit, or meet other activity thresholds. It’s best to look for a checking account that doesn’t have a monthly maintenance fee or requires a low minimum balance that you know you can maintain.