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If you have a basic checking account with a large national retail bank, you could be on the hook for as much as $12 a month just to maintain the account.
With a standard checking account, you can deposit and retrieve money, use a debit card, set up direct deposits and use online banking services. When opening a new account, you’ll want to consider such things as interest rate, security features and fees.
Opening and maintaining a checking account could also come with a host of fees. Fortunately, there are ways to make sure your checking account is free, some of which won’t even require you to switch banks. In this quick guide, we’ll cover three ways to get a free checking account and include some options to consider.
- At a glance: The best free checking accounts
- Switch to an online bank
- Consider a local credit union
- Meet the bank’s waiver requirements
At a glance: The best free checking accounts
|Discover Bank||Best for cash back on debit card purchases|
|Capital One 360||Best for branch support|
|Ally Bank||Best for savings|
1. Switch to an online bank
Online banks typically don’t have big networks of brick-and-mortar branches, and their costs tend to be lower than large national banks. Many online banks don’t charge a monthly maintenance fee.
If you’re considering opening a checking account with an online bank, here are a few to consider.
Discover Bank doesn’t charge a monthly maintenance fee, regardless of your account balance. You’ll also earn 1% cash back every time you use your debit card on up to $3,000 in purchases each month.
Plus, if you open a free savings account, you’ll earn a 0.5% annual percentage yield (or APY) on your deposits.
Capital One 360
If you live near a Capital One branch and don’t want to switch to online banking entirely, consider opening a Capital One 360 Checking account.
You won’t pay any monthly maintenance fees or fees for account minimums, plus you can earn 0.10% APY, depending on your checking account balance. For comparison, the average checking account APY, according to the Federal Deposit Insurance Corporation, is just 0.05% as of Dec. 7, 2020.
Note that Capital One is upfront that there are fees for other things you might want to do with your account, though, such as requesting overnight check delivery or a stop payment.
Ally Bank’s checking account comes with no monthly maintenance fees and 0.10% or 0.25% APY, depending on your account balance. What’s more, the bank has a high-yield savings account that offers 0.60% APY, regardless of your balance.
2. Consider a local credit union
Credit unions are not-for-profit organizations and are owned collectively by their members. As a result, profits are typically returned to members in the form of lower fees and higher savings rates.
To join a credit union as a member, you’ll need to meet certain eligibility requirements. Some of the more common ones include living, working or worshiping in a specific geographic area. You could also qualify if you belong to a certain organization.
Check with credit unions in your area to see what the terms are on their checking accounts. Even if you can’t find a free account, the fees may be less than what you’d find with a bank.
3. Meet the bank’s waiver requirements
If your bank charges a monthly fee, you may be able to get it waived by meeting certain criteria.
Some, for example, require a minimum daily balance to get the fee waived. Others will drop the fee if you use direct deposit (minimums apply) or make a minimum amount of debit card purchases each month. College students can typically get their monthly fee waived while they’re in school.
If you do qualify for a waiver, though, don’t forget about the fee in the future. The last thing you want is to switch your direct deposit to a different account, take your balance below the minimum amount required, or graduate from college and get surprised with a monthly fee.
Finding a free bank account is relatively easy in today’s banking industry. But while some banks will make you work for it, others don’t charge a fee at all.
As you consider your banking options, do your research and compare the different options available to you. In addition to looking at the fees, also consider what kind of interest rates the banks offer on their deposit accounts, as well as other convenience features, like mobile apps or online bill pay.
Whether you choose to open a new bank account or keep your current one, go with the option that offers you the most value based on your needs and financial situation.