A checking account fee is money your bank takes from your account for a service, or sometimes for not meeting a requirement
Banks charge fees for different reasons. Some fees cover the cost of a service you use — like withdrawing cash from an ATM that doesn't belong to your bank. Other fees penalize you for breaking a rule, like writing a check when you don't have enough money in the account. A few fees exist straightforward because your account doesn't meet a minimum balance or doesn't have direct deposit coming in.
The key thing to understand is that fees are not the same everywhere. One bank might charge $3 for an overdraft, while another charges $35. Some banks charge no monthly fee at all. This is why comparing accounts before you open one matters — the difference between banks can add up to hundreds of dollars a year.
Key Takeaways
- Monthly maintenance fees are charged just for having the account open, though many banks waive them if you meet conditions like keeping a minimum balance or setting up direct deposit.
- Overdraft fees happen when you spend more money than you have, and they are usually the most expensive fee a checking account charges.
- Out-of-network ATM fees are charged when you withdraw cash from an ATM that your bank does not own or partner with.
- You can avoid most checking account fees by choosing a bank that matches your habits and reading the fee schedule before you open the account.
Monthly maintenance fees and how to avoid them
A monthly maintenance fee (also called a service charge) is what some banks charge just to keep your account open. This fee typically ranges from $5 to $15 per month, though the amount varies by bank and by account type. A basic checking account at one bank might have no monthly fee, while a premium account at the same bank might charge $25.
Most banks let you avoid this fee by meeting one or more conditions. The most common are: keeping a minimum balance in the account (often $500 to $1,500), setting up direct deposit of your paycheck, or making a certain number of debit card transactions per month. Some banks waive the fee for customers over 65, students, or people who are members of the military. Read the fine print before opening an account to see what your bank requires.
Overdraft fees: the most expensive charge
An overdraft fee is charged when you spend more money than you have in your account. If your balance is $50 and you swipe your debit card for $75, the bank covers the extra $25 — and then charges you a fee for doing so. This fee is usually between $25 and $35 per transaction, making it the most expensive regular fee a checking account charges.
Some banks charge multiple overdraft fees in a single day if you make several purchases that overdraw your account. A few banks limit you to one overdraft fee per day, while others have no limit. This is why a single mistake — like forgetting about a pending check — can cost you $75 or more.
You can protect yourself in two ways. First, many banks offer overdraft protection, which means the bank automatically transfers money from a savings account or linked account to cover the shortfall. This usually costs nothing or a small fee ($1 to $3), much less than an overdraft fee. Second, you can straightforward decline overdraft protection and have the transaction rejected instead — no fee, but the purchase won't go through.
ATM fees and network limitations
An out-of-network ATM fee is charged when you withdraw cash from an ATM that your bank does not own or partner with. Your bank typically charges $2 to $3 for this service. Some ATM operators also charge their own fee on top of that, so you might pay $4 to $5 total for a single withdrawal.
Banks that have many physical locations or partner with other banks usually have larger ATM networks, which means fewer out-of-network withdrawals. Online banks and smaller regional banks often have smaller networks, so you may pay more in ATM fees if you need cash frequently. Before opening an account, check whether the bank has ATMs near your home, work, and places you shop regularly.
Other common checking account fees
Banks charge smaller fees for specific situations. A returned check fee (also called a bounced check fee) is charged when you write a check but don't have enough money to cover it — the bank returns the check unpaid and charges you $25 to $35. A stop payment fee is charged when you ask the bank to cancel a check you wrote, usually costing $25 to $35. A wire transfer fee is charged when you send money electronically to another bank, typically $15 to $30 for a domestic transfer.
Some banks charge fees for services that used to be free, like talking to a teller or getting a paper statement mailed to you. A few charge fees for closing your account within a certain time period, or for having too many transactions in a month. These fees are less common, but they exist — which is why reading the full fee schedule matters.
How to compare fees before opening an account
Every bank publishes a document called a fee schedule or pricing guide
As you compare banks, think about your own habits. If you rarely use ATMs, an out-of-network ATM fee matters less to you. If you get paid by direct deposit and keep a steady balance, you might avoid the monthly maintenance fee entirely. If you are careful with your checkbook and never overdraw, overdraft fees won't affect you. Match the account to your life, not the other way around. Some banks advertise "no-fee checking," which usually means no monthly maintenance fee — but other fees may still explore. Make sure you understand what "no-fee" actually covers before you sign up. Yes. If you make several purchases that overdraw your account, most banks charge a separate overdraft fee for each one. Some banks limit overdraft fees to one per day, and a few cap the total number you can be charged per month. Check your bank's policy in the fee schedule. An overdraft fee is charged when the bank covers a purchase you can't afford. Overdraft protection is a service that automatically transfers money from another account to prevent the overdraft — it usually costs $1 to $3 or nothing at all. Protection is much cheaper than the fee. No. Many banks offer checking accounts with no monthly fee, especially online banks. However, some require you to meet conditions like setting up direct deposit or keeping a minimum balance. Others charge a monthly fee unless you do one of these things. Sometimes. If you have been a customer for a long time or have multiple accounts with the bank, you can call and ask a manager to waive a single fee. Banks are more likely to do this for overdraft fees than for monthly maintenance fees. It never hurts to ask, but do not expect it. Banks charge fees to cover the cost of running the service and to discourage behavior that costs them money. An overdraft fee discourages you from spending money you don't have. A monthly maintenance fee helps the bank make money on accounts that don't generate profit through interest or other means.Frequently Asked Questions
Can a bank charge me multiple overdraft fees in one day?
What is the difference between an overdraft fee and an overdraft protection fee?
Do all banks charge monthly maintenance fees?
Can I negotiate or get a fee waived?
Why do banks charge fees at all?