Minimum balance requirements exist on some checking accounts, not all
A minimum balance requirement is a set amount of money you must keep in your checking account at all times to avoid fees or to get certain features. Not every checking account has one. Banks that do impose them typically require anywhere from $500 to $2,500, though some require more. If your balance drops below that threshold, the bank charges a monthly fee—usually $10 to $25—until you bring it back up.
The account type that most commonly requires a minimum balance is a premium or tiered checking account. These accounts offer perks like higher interest rates, fee waivers, or access to investment services. The bank uses the minimum balance requirement to offset the cost of those benefits. Standard checking accounts—the basic option most banks offer—typically have no minimum balance at all.
Some banks also tie minimum balance requirements to other account features. For example, a bank might waive monthly maintenance fees if you maintain a $1,000 balance, or they might require a $5,000 minimum to earn interest on the account. The requirement is always spelled out in the account's terms and conditions before you open it.
Key Takeaways
- Premium and tiered checking accounts are the main type that require a minimum balance, while basic checking accounts usually do not.
- Minimum balance amounts vary by bank and account type, ranging from $500 to $2,500 or higher.
- If your balance falls below the minimum, the bank typically charges a monthly fee of $10 to $25 until you restore it.
- Some banks waive the minimum balance requirement if you set up direct deposit or maintain a linked savings account.
- You can find the exact minimum balance requirement in the account's disclosure document before opening the account.
How banks calculate whether you meet the minimum
Banks measure your balance in different ways, and the method matters. Some banks look at your daily balance—the amount in your account at the end of each day. Others use your average daily balance over the month, which smooths out fluctuations. A few use your minimum daily balance, meaning the lowest amount your account held at any point during the month.
If you use the daily balance method and your account dips below the minimum for even one day, you may trigger a fee. With an average daily balance calculation, you have more room to move—you can drop below the minimum on some days as long as your average for the month stays above it. The account disclosure will tell you which method your bank uses, but it is worth calling to confirm before you open the account, especially if you expect your balance to fluctuate.
Some banks also offer a grace period. They might not charge a fee if you fall below the minimum for just a few days, or they might charge only if you stay below for the entire month. Again, this varies by bank and account type, so read the fine print or ask directly.
Types of accounts most likely to have minimum balance requirements
Money market checking accounts frequently require a minimum balance because they offer interest on your deposits. The higher the interest rate, the higher the minimum is likely to be. Banks use the minimum to may support they are lending out enough of your money to cover the interest they pay you.
Premium checking accounts marketed to higher-income customers often require minimums of $2,500 to $10,000 or more. These accounts may include perks like fee waivers at partner ATMs, higher interest rates, or access to a personal banker. The minimum balance is how the bank ensures the account is profitable for them.
Business checking accounts frequently have minimum balance requirements, sometimes higher than personal accounts. A small business account might require $1,000 to $5,000. The bank assumes a business account will generate more transaction volume and fees, so they offset that with a balance requirement.
Student checking accounts and accounts for seniors typically have no minimum balance, as these are designed to be accessible. If you are in either group and see a minimum requirement, that account is not marketed to you—shop elsewhere.
Ways to avoid or waive the minimum balance requirement
Many banks will waive the minimum balance requirement if you meet one or more conditions. The most common is setting up direct deposit—if your paycheck or government benefits go straight into the account, the bank often drops the requirement entirely. Some banks require a minimum deposit amount per month (like $500) rather than a balance sitting in the account.
Linking a savings account to your checking account can also waive the requirement. The bank looks at the combined balance of both accounts, so if your checking account is low but your savings account is healthy, you may still meet the threshold. A few banks waive the minimum if you maintain a certain credit card balance with them or use their investment services.
If you already have an account with a minimum balance requirement and you no longer want to meet it, contact the bank and ask if they can convert you to a basic checking account with no minimum. Many banks will do this without closing your account, though you may lose any interest-earning features or fee waivers that came with the premium account.
What happens if you fall below the minimum
The first consequence is a monthly maintenance fee, usually $10 to $25. This fee is charged once per month, typically on the same date each month, and it comes out of your account automatically. If your balance is already low, this fee can push you further into the red and trigger overdraft fees on top of it.
Some banks charge the fee only once per month, even if you stay below the minimum all month. Others charge it every day you are below the threshold, which can add up quickly. Read your account agreement to understand the bank's specific policy.
If you fall below the minimum and then receive a deposit that brings you back above it, the fee is not reversed. You have to pay it for that month. However, if you stay above the minimum for the next billing cycle, no additional fee is charged.
How to learn about your account has a minimum balance requirement
The easiest way is to look at your account's disclosure document or terms and conditions, which the bank must provide before you open the account. This document lists all fees, including any monthly maintenance fee tied to a minimum balance. It will also state the exact minimum amount and how the bank calculates whether you meet it.
If you already have an account and are not sure whether it has a minimum balance requirement, log into your online banking or call the customer service number on the back of your debit card. Ask directly: "Does my account have a minimum balance requirement? If so, what is it, and how is it calculated?"
When you are shopping for a new account, compare the minimum balance requirements across banks. If you know you cannot maintain a high balance, choose a bank that offers basic checking with no minimum. Many online banks and credit unions have no minimum balance requirements at all, even on accounts that earn interest.
Frequently Asked Questions
Can I have a checking account with no minimum balance?
Yes. Most banks offer at least one basic checking account with no minimum balance requirement. Online banks and credit unions are particularly likely to have no-minimum options. You may not earn interest on the account, but you will avoid monthly fees.
What is the difference between a minimum balance requirement and an overdraft fee?
A minimum balance requirement is a fee the bank charges if your balance falls below a set amount. An overdraft fee is charged when you spend more money than you have in the account. You can have both—falling below a minimum and then writing a check that bounces will trigger both fees.
If I close my account, do I get the minimum balance fee back?
No. Once the fee is charged, it is kept by the bank. However, if you close the account before the next fee is due, you will not be charged again. If you are unhappy with the fees, closing the account and moving to a bank with no minimum is a reasonable option.
Can a bank change the minimum balance requirement on my existing account?
Yes, banks can change account terms, including minimum balance requirements. They must notify you in writing before the change takes effect, usually 30 days in advance. If you disagree with the change, you can close the account and move to another bank.
Do savings accounts have minimum balance requirements?
Some do, but it is less common than with checking accounts. High-yield savings accounts sometimes require a minimum balance to earn the advertised interest rate. Basic savings accounts usually have no minimum. Check the account disclosure before opening.