How to Bank With No Minimum Balance Fees

hundred dollar bill widdled down with teeth marks
••• John Kuczala/Stone/Getty Images

You need a bank account to function in today’s world, but it’s hard to afford banking unless you keep a large account balance. Banks charge monthly fees for checking accounts, and those fees are especially troublesome when you’re trying to keep your account balance above zero. Fortunately, it’s not too hard to find great banking services with no minimum balance requirements. Here are 3 of the best ways to bank for free.

Go Online

An online bank is a great choice if you’re just getting started, or if you tend to keep a small account balance. Most online banks have no minimum balance requirements, which means you can avoid fees even if your account is empty.

For example, both Ally Bank and Capital One 360 both offer free checking and savings accounts with no minimum balance to open an account (and no ongoing minimums either). Opening an account is easy, and you’ll probably earn more on your savings than you would get from the bank down the street. You’ll be able to deposit checks with your phone or tablet, and when it’s time to spend the money you can either use your debit card or pay bills online for free.

What’s the Catch? As long as you plan ahead, there might not be one. Your funds are in an internet account, so it’s not possible to walk into a branch and conduct business. For small cash withdrawals, any ATM will do the trick – but all banks have daily withdrawal limits, which might create challenges.

If you ever need something like a cashier’s check, you’ll want to get things in place well ahead of time: you can possibly order the check from your online bank (and wait for it to come in the mail), transfer that money to a local brick-and-mortar bank, or get enough cash to buy a money order locally.

Go Small

Small banks and credit unions are another good option for free checking and savings accounts. These institutions are less likely than megabanks to have minimum balance requirements and high monthly fees.

Look around locally for small regional banks. Ask friends, family, and co-workers who they bank with to get some ideas. Your employer might even have a relationship with a local credit union, which would further improve your chances of banking for free. Not quite sure what a credit union is? Find out how credit unions compare to banks.

Dodge the Fees

Even if you use a megabank (a national brand with branches on every corner), you might not have to pay fees – or even keep a large balance in your account. Banks typically offer several ways to avoid paying monthly fees, and you might qualify for a fee waiver even if you think your balance is too low.

Talk with a banker or search for details on any criteria that will help you bank for free. Usually, the bank applies waivers automatically – you don’t need to notify the bank or request a waiver. A few examples of waivers are listed below:

  • Set up direct deposit into your checking account (some banks require a minimum monthly deposit, such as $500). If you have multiple accounts, ask your employer if it’s possible to spread your deposits among those accounts.
  • Some banks waive fees if you simply use your account (for example, if you use your debit card at least 10 times per month, the fees are waived)
  • Students often get a great deal – show proof of enrollment and your fees can be waived for the next several years
  • See if there’s an online-only or paperless option at your existing bank. If you’re not using the branch anyway, you can save money (and still have the option to visit a teller – for a modest fee – if the need arises).

    Alternative: Try Prepaid

    If there’s just no way to avoid paying monthly maintenance fees to your bank, look into prepaid debit cards. Instead of depositing funds into your bank account, you’ll “load” funds onto your card. You can spend your balance just like with any other debit card, and some cards offer online bill payment and other features.

    Be cautious about using a prepaid card as a substitute for a bank account. Balances might not be FDIC insured, and those cards have a history of charging high fees. Plus, you don’t earn interest on savings, so it’s hard to make progress towards your goals. However, there are several affordable cards to choose from if a bank account just won’t work for you.