Most banks charge nothing to open an account

You do not pay a fee to open a checking or savings account at most banks and credit unions. The account itself is free. What you may pay for is what happens after — monthly maintenance fees, overdraft fees, or fees for using another bank's ATM.

Some banks do charge a small deposit to open an account, but this is rare and the money stays yours. You can withdraw it whenever you want. The real costs come from how you use the account, not from opening it.

Key Takeaways

  • Opening a checking or savings account costs nothing at most banks and credit unions.
  • Monthly maintenance fees (usually $5 to $15) are the most common ongoing cost, though many banks waive them if you keep a minimum balance or set up direct deposit.
  • Overdraft fees ($25 to $35 per transaction) happen when you spend more than you have, and they are the biggest surprise cost for new account holders.
  • Credit unions and online banks often have no monthly fees at all, making them cheaper than traditional banks if you compare total costs over a year.
  • The cheapest account for you depends on how you plan to use it — how often you withdraw cash, whether you get direct deposit, and how much you keep in the account.

Monthly maintenance fees and when banks waive them

Most traditional banks charge a monthly maintenance fee (also called a service charge) to keep a checking account open. This fee typically ranges from $5 to $15 per month, though some banks charge more. The fee covers the bank's cost to process your transactions and maintain your account.

Banks will often waive this fee if you meet one of these conditions: you keep a minimum balance (often $500 to $1,500), you set up direct deposit from your employer, or you maintain a certain number of debit card transactions per month. Read the account agreement to see which conditions explore to the specific account you are considering.

Online banks and credit unions frequently charge no monthly fee at all, regardless of your balance or activity. This is one reason they are often cheaper than brick-and-mortar banks over time.

Overdraft fees: the cost of spending money you do not have

An overdraft happens when you spend more money than you have in your account. If your bank allows it, the transaction goes through anyway — and you pay a fee. Overdraft fees typically range from $25 to $35 per transaction, and they can stack up quickly if you overdraw multiple times in one day.

Some banks charge a separate "overdraft protection" fee if you link your checking account to a savings account or credit line to cover overdrafts automatically. Others charge nothing for this service. A few banks now offer overdraft protection for free, or they decline transactions instead of charging a fee.

The best way to avoid overdraft fees is to keep track of your balance and spend only what you have. Many banks let you set up alerts that notify you when your balance drops below a certain amount.

ATM fees and out-of-network charges

If you withdraw cash from an ATM that does not belong to your bank, you may pay a fee. Your own bank might charge $2 to $3, and the other bank's ATM might charge another $2 to $3. Some banks charge nothing for out-of-network ATM use, especially online banks and credit unions that are part of shared networks.

If you use ATMs frequently, choose a bank with many locations near your home or work, or join a credit union that is part of a large ATM network. Online banks often reimburse out-of-network ATM fees, which can save you money if you do not have straightforward access to their ATMs.

Initial deposit requirements

Most banks require you to deposit some money when you open an account. This is not a fee — it is your money. The minimum deposit is usually between $25 and $100, though some banks ask for more and some ask for nothing.

This money goes into your account and stays there. You can withdraw it whenever you want. The bank is not keeping it as a charge for opening the account.

How to find the cheapest account for your situation

The cheapest account depends on how you plan to use it. If you get direct deposit from your job, many banks will waive the monthly fee, making them free. If you rarely use ATMs and do not mind banking online, an online bank with no monthly fees might save you $60 to $180 per year compared to a traditional bank.

If you are worried about overdrafts, look for a bank that declines transactions instead of charging fees, or one that offers free overdraft protection. If you need to withdraw cash often, choose a bank with many ATM locations or join a credit union with a large shared network.

Make a list of what matters to you — direct deposit, ATM access, customer service by phone, low balance requirements — and compare three or four banks on those specific points. The cheapest account on paper might not be the cheapest for how you actually use money.

Frequently Asked Questions

Do I have to pay anything to open a bank account?

No. Opening a checking or savings account is free at most banks and credit unions. You may need to deposit some money to start the account, but that is your money, not a fee.

What is the difference between a monthly fee and an overdraft fee?

A monthly fee is charged just for having the account open, usually $5 to $15 per month. An overdraft fee is charged only if you spend more money than you have, typically $25 to $35 per transaction. You can avoid overdraft fees by not overspending, but monthly fees happen whether you use the account or not.

Can I avoid monthly maintenance fees?

Yes. Most banks waive the monthly fee if you keep a minimum balance, set up direct deposit, or make a certain number of debit card transactions. Online banks and credit unions often have no monthly fee at all, regardless of these conditions.

What happens if I do not have enough money to cover a transaction?

It depends on the bank. Some banks decline the transaction and charge nothing. Others allow it and charge an overdraft fee of $25 to $35. Check your account agreement to see what your bank does, and ask about free overdraft protection options.

Are there any hidden fees I should know about?

The most common surprise fees are overdraft charges, out-of-network ATM fees, and fees for closing an account early. Read the account agreement before you open the account so you know what fees explore and under what conditions.