Minimum balance requirements vary by bank and account type, and many checking accounts have none at all
A minimum balance requirement is the lowest amount of money a bank requires you to keep in your checking account at all times. If your balance falls below that number, the bank charges you a fee—usually $10 to $35 per month, though some banks charge more. The requirement exists because banks use customer deposits to lend money and generate revenue; a minimum balance compensates them for the risk of holding an account that doesn't generate enough activity.
Not every checking account has a minimum balance requirement. Many banks, particularly online-only banks and credit unions, offer checking accounts with zero minimum balance. Traditional brick-and-mortar banks are more likely to impose one, but even they often have account tiers—a basic account with no minimum and a premium account with a higher minimum that waives other fees.
The requirement is typically stated in the account's terms and conditions, which you receive when you open the account. Banks calculate the balance requirement in different ways: some look at your balance on a single day each month, others average your balance across the entire month, and a few require you to maintain the minimum at all times without dipping below it even once.
Key Takeaways
- Minimum balance requirements range from zero to several thousand dollars depending on the bank and account type, with $500 to $1,500 common for standard accounts at large banks.
- The bank's method of calculating whether you meet the requirement matters: daily balance, average balance, and end-of-month balance all produce different results for the same account activity.
- Online banks and credit unions typically have no minimum balance requirement, while traditional banks often do, though they usually offer a no-minimum tier at a lower account level.
- If you fall below the minimum, the bank charges a monthly fee that can range from $10 to $35 or more, and these fees compound if you remain below the threshold for multiple months.
How banks calculate whether you meet the minimum
The way a bank measures your balance against the requirement is not always obvious from the account name alone. Three methods are common, and they can produce very different results.
Daily balance is the strictest method. Your balance must never fall below the minimum on any single day of the month. If you have $1,500 required and you drop to $1,499 on one day—even if you deposit $5,000 the next day—you fail the requirement and pay the fee. This method is less common now but still appears in some premium accounts.
Average daily balance is more forgiving. The bank adds up your balance at the end of each day for the entire month, then divides by the number of days. If your average comes out to $1,500 or higher, you meet the requirement even if you dipped below $1,500 on individual days. This is the most common method at large banks.
End-of-month balance looks only at what you have on the last day of the month. If the requirement is $1,500 and you have $1,500 or more on the 30th or 31st, you pass—regardless of what happened earlier in the month. Some online banks use this method because it is straightforward to administer.
Minimum balance amounts at different bank types
The actual dollar amount varies widely. Online banks and credit unions typically have no minimum at all. Traditional banks vary based on the account tier and the bank's size.
| Bank Type | Typical Minimum Balance | Notes |
|---|---|---|
| Online banks | $0 | Most have no minimum requirement on any checking account. |
| Credit unions | $0 to $100 | Many have no minimum; some require a small share deposit to join but not a checking balance. |
| Large national banks (basic tier) | $0 to $500 | Entry-level accounts often have no minimum; premium tiers have higher requirements. |
| Large national banks (premium tier) | $1,500 to $10,000 | Higher minimums waive monthly fees and sometimes offer higher interest rates. |
| Regional or community banks | $500 to $2,500 | Varies by institution; smaller banks may have higher minimums to offset lower transaction volume. |
The amount also depends on what else the account offers. An account that pays interest on your balance may have a higher minimum than one that does not. An account that waives overdraft fees or offers free wire transfers may require you to maintain a minimum to offset those benefits.
What happens if you fall below the minimum
When your balance drops below the requirement, the bank charges a fee at the end of the month or billing cycle. The fee is separate from overdraft fees—you can trigger both at the same time if you go negative. The fee typically ranges from $10 to $35, though some banks charge $5 and others charge $50 or more.
The fee is charged once per month, not every day you are below the minimum. If you stay below the requirement for three months, you pay the fee three times. Some banks waive the first fee if it is your first violation, but this is not standard.
Repeated minimum balance fees can add up quickly. A $15 monthly fee on an account where you cannot maintain $1,500 costs $180 per year. Over five years, that is $900 in fees alone—money that could have gone toward building your balance or paying other expenses.
Ways to avoid or waive minimum balance requirements
If your current bank has a minimum balance requirement you cannot meet, you have several options. The simplest is to switch to a bank with no minimum. Online banks like Ally, Charles Schwab, and Discover have no minimum balance requirements on their checking accounts. Credit unions often have none either, and you may be able to join one through your employer or a community organization.
If you want to stay with your current bank, ask whether they offer a lower-tier account with no minimum. Most large banks have at least two checking account options. You may lose some features—fewer free transfers, lower interest rates, or fewer ATM locations—but you avoid the monthly fee.
Some banks waive the minimum balance requirement if you set up direct deposit of your paycheck. Others waive it if you maintain a certain balance in a linked savings account, or if you have a credit card with the same bank. Read your account's terms or call the bank to ask what waivers are available.
Minimum balance versus overdraft fees
Minimum balance fees and overdraft fees are separate charges that can both appear on your statement. A minimum balance fee occurs when your balance is below the required amount at the end of the month. An overdraft fee occurs when your balance goes negative—you spend money you do not have.
You can have a minimum balance of $1,500 required, stay above it all month, and still pay an overdraft fee if you make a large purchase that temporarily takes you negative. Conversely, you can go negative (and pay an overdraft fee) and also fall below your minimum balance (and pay a minimum balance fee) in the same month.
Some banks link these fees together in their pricing. A premium account might waive both minimum balance fees and overdraft fees if you maintain a high balance. A basic account might charge both. Understanding which fees explore to your specific account is important for budgeting.
Frequently Asked Questions
Can a bank change my minimum balance requirement?
Yes. Banks can change account terms, including minimum balance requirements, with advance notice—typically 30 days. They must notify you in writing or through your online banking portal. If you disagree with the change, you can close the account and move to another bank.
Does a minimum balance requirement affect my credit score?
No. Minimum balance requirements are internal bank policies and do not appear on your credit report. Overdraft fees and unpaid negative balances can affect your credit if the bank reports them to a credit bureau, but a minimum balance fee alone does not.
What if I have a joint account—does each person need to maintain the minimum?
No. The minimum balance applies to the account as a whole, not to each individual owner. If the account requires $1,500 and you and your spouse own it jointly, the combined balance must be $1,500 or higher. Either of you can deposit money to meet it.
Do savings accounts have minimum balance requirements too?
Many do, though the amounts and methods vary. Savings accounts often have lower minimums than checking accounts—sometimes $100 to $500—but some have none. Check your specific account's terms. Savings minimums are less common at online banks.
If I close my account, do I owe the bank for minimum balance fees I already paid?
No. Once the bank charges a minimum balance fee, it is final. You cannot get it back by closing the account. However, if you close the account before the end of the month, the bank will not charge a new minimum balance fee for that month.