What to look for before you open a checking account
The difference between a cheap credit union checking account and an expensive one usually comes down to three things: the monthly maintenance fee, the overdraft policy, and what triggers those overdraft charges. Most credit unions charge between $0 and $15 per month for a basic checking account, but some waive the fee entirely if you meet straightforward conditions — like keeping a minimum balance or setting up direct deposit.
Before you open an account, find out what the credit union actually charges for the things you do regularly. If you use out-of-network ATMs frequently, a $3 fee per transaction adds up fast. If you occasionally overdraft, the difference between a $25 overdraft fee and a $35 one matters. Write down the specific fees that explore to your habits, not just the ones that sound important.
The credit union's website usually lists these fees in a document called a fee schedule or pricing guide. If you cannot find it online, call and ask for it by name — do not rely on a summary from the website, because the full schedule often contains exceptions and details the summary leaves out.
Key Takeaways
- Monthly maintenance fees range from $0 to $15, but most credit unions waive them if you maintain a minimum balance or receive direct deposit.
- Overdraft fees typically run $25 to $35 per transaction, and some credit unions charge multiple fees if you overdraft several times in one day.
- Out-of-network ATM fees, foreign transaction fees, and paper statement fees are common add-ons that vary widely between credit unions.
- The cheapest account on paper may not be the cheapest for your actual spending pattern, so compare based on what you actually do with your money.
Monthly maintenance fees and how to avoid them
A monthly maintenance fee is a flat charge the credit union takes from your account each month just for having the account open. Most credit unions charge $0 to $10, though some charge up to $15. The key is that most of these fees have an escape hatch — a condition you can meet to waive it.
Common ways to waive a monthly fee include: keeping a minimum balance (often $500 to $1,000), setting up direct deposit of your paycheck, maintaining a savings account at the same credit union, or using the debit card a certain number of times per month. Some credit unions waive the fee for members under 25 or over 65. Check which condition applies to you, because meeting one is usually easier than paying the fee every month.
If the credit union charges a monthly fee with no waiver option, that is a sign to look elsewhere. Many credit unions offer checking with no monthly fee at all, so you should not pay for the privilege of having an account.
Overdraft fees and how credit unions handle them
An overdraft happens when you spend more money than you have in your account. The credit union can either decline the transaction (which costs you nothing but may embarrass you at the register) or pay it anyway and charge you a fee. Most credit unions charge $25 to $35 per overdraft, though some charge as little as $15 or as much as $39.
The real cost depends on how the credit union counts overdrafts. Some charge one fee per transaction that overdrafts. Others charge one fee per day, no matter how many transactions overdraft that day. A few charge a fee for each overdraft plus an additional daily fee if your account stays negative. Read the fee schedule carefully — the difference between "one fee per transaction" and "one fee per day" can save you hundreds of dollars if you have a bad month.
Many credit unions now offer overdraft protection, which means they automatically transfer money from a linked savings account or line of credit to cover the overdraft instead of charging a fee. This usually costs $0 to $10 per transfer, which is cheaper than an overdraft fee. Ask whether the credit union offers this and whether you can set it up before you open the account.
ATM fees and where you will actually withdraw cash
Credit unions are smaller than banks, so they have fewer ATMs. If you use an ATM that does not belong to your credit union, you will pay a fee — usually $2 to $3 per withdrawal. That does not sound like much, but if you withdraw cash twice a week, it costs $200 to $300 per year.
Before you open an account, check whether the credit union is part of an ATM network. Most credit unions belong to either the CO-OP Network or the Allpoint Network, which means you can use thousands of ATMs without a fee. Some credit unions also have reciprocal agreements with other credit unions, so you can use their ATMs for free too. Look up the credit union's name on the CO-OP or Allpoint website to see how many free ATMs are near your home and work.
If the credit union has few ATMs in your area and charges $3 per out-of-network withdrawal, that is a real cost to factor in. A credit union with more ATM access might be worth a slightly higher monthly fee.
Debit card features and foreign transaction costs
Most credit union checking accounts come with a debit card, but the features vary. Some cards have no annual fee and no foreign transaction fee. Others charge $1 to $3 per transaction made outside the United States, which adds up if you travel or shop online from foreign retailers.
Check the fee schedule for foreign transaction fees — this is the charge for using your debit card in another country or in a foreign currency. If you never travel internationally, this does not matter. If you do, a credit union with no foreign transaction fee saves you money compared to one that charges 2 to 3 percent of each transaction.
Some credit unions also charge a fee if you request a replacement debit card, if you use your card for a cash advance, or if you dispute a transaction. These are less common, but they appear in the fee schedule, so read it all the way through.
Paper statements and other small fees that add up
Many credit unions now charge a fee if you want a paper statement mailed to you instead of viewing it online. This fee is usually $1 to $2 per month, which is small but unnecessary if you are willing to go paperless. Some credit unions waive it if you sign up for paperless statements, so check whether that option exists.
Other small fees to watch for include: a fee for a cashier's check, a fee to stop payment on a check you wrote, a fee to close your account within a certain time period, and a fee for a wire transfer. None of these are common charges, but if you know you will need one of these services, ask the cost upfront.
Add up all the small fees that explore to your situation. A credit union with no monthly fee but a $3 out-of-network ATM fee and a $2 paper statement fee might cost more than one with a $5 monthly fee but free ATM access and free statements.
Comparing accounts side by side
The best way to choose is to list the fees that actually matter to you, then compare two or three credit unions using that list. Here is what that might look like:
| Fee Type | Credit Union A | Credit Union B | Credit Union C |
|---|---|---|---|
| Monthly maintenance | $0 with direct deposit | $5 (no waiver) | $0 |
| Overdraft | $28 per transaction | $25 per day | $30 per transaction |
| Out-of-network ATM | $3 | Free (CO-OP Network) | $2.50 |
| Foreign transaction | 2% | None | 2% |
| Paper statement | $2 | Free | $1.50 |
Once you have the table filled in, estimate your annual cost for each credit union based on how often you use each service. If you use out-of-network ATMs twice a week, that $3 fee costs $312 per year. If you overdraft twice a year, that $28 fee costs $56 per year. Add them up and you will see which credit union is actually cheapest for your situation.
Frequently Asked Questions
Can I switch credit unions if I find a better deal later?
Yes. You can close your account at any time, and most credit unions have no penalty for closing early. Open a new account at the better credit union, then close the old one once your direct deposits and automatic payments have moved over. The whole process usually takes a few weeks.
What if my credit union charges an overdraft fee but I did not authorize it?
You can dispute the fee by contacting the credit union and explaining that you did not authorize the overdraft. Some credit unions will reverse one or two fees per year if you have a good history. Ask for a reversal — the worst they can say is no.
Do I need to keep a minimum balance to avoid fees?
Only if the credit union requires it. Check the fee schedule to see whether a minimum balance is one of the ways to waive the monthly fee. If it is, decide whether keeping that balance is easier than meeting the other waiver conditions, like setting up direct deposit.
Are credit union checking accounts safer than bank accounts?
Credit union deposits are insured by the National Credit Union Administration (NCUA) up to $250,000, the same as bank deposits are insured by the FDIC. Both are equally safe from a loss-of-funds perspective. The difference is in fees and service, not in safety.
What happens if I do not meet the conditions to waive the monthly fee?
The credit union will charge the monthly maintenance fee and deduct it from your account. If you cannot meet the waiver conditions, look for a credit union that charges no monthly fee at all, or switch to one that does.