Most people are looking for ways to reduce their spending, especially when the economy is poor. One way to save money is to open a free checking account with no fees. However, doing so can be like walking through a minefield, so consumers must step carefully.
Typical Features
A free checking account is one in which there are no fees. No fees generally means that the customer won’t be charged a monthly maintenance or activity fee. That does not mean that banks don’t charge for other activities because they do. No fee accounts usually include a free debit card. They typically offer online, mobile, bank–by–phone services. Monthly statements are provided electronically. Direct deposits are encouraged.
Special Features and How To Get Them
Each bank will have extra or bonus features, but customers usually have to ask for them. It may be necessary to ask several times to get complete information on benefits. The first feature to request is no service charge if the account balance drops below a certain amount. Most people also want unlimited check writing privileges. Online access to the account should be free. Less common, but available, are features like free checks, occasionally for life, and no fee for withdrawals from unaffiliated ATMs.
Fine Print
Ah, the fine print. There’s lots of it because it pertains to all the fees banks can charge consumers for their free checking account. Read it all carefully, then read it several more times. Customers can have overdraft protection, but they’ll pay for it. Don’t expect to receive a paper statement without paying a service charge for it. In fact, don’t expect anything on paper, including canceled checks. Special services such as wire transfers, stop payment orders, and safe deposit boxes are not free, even if the bank says the no–fee account is “full service.”
Reasons to Choose Free Checking
Despite the drawbacks, there’s good reason to open a free checking account. They’re ideal for people who maintain a low account balance and have simple transactions. Truly free checking lets customers save their money for their own needs, rather than pay for services they usually don't need.
Reasons to Avoid Free Checking
Consumers who require special services will pay sometimes hefty fees for what would otherwise be free with a regular checking account. Accounts with large balances can earn interest. If the bank has a rewards program, they may be able to charge a fee to customers with free checking to redeem their rewards. Essentially any services other than basic transactions will incur a fee.
Many banks offer free checking to students and seniors as a matter of routine. Members of credit unions often quality for no–fee accounts. Others may have to shop around to find a bank that will meet their needs. Consumers who regard checking accounts with no fees as a product and carefully investigate all their potential choices can avoid the minefield of unexpected or excessive bank service charges.
