Truly free checking?

[Mr Nice Guy]

Does anyone bank with a national bank that has truly free checking with no strings attached?

I am with a local credit union now, and I have been getting assessed bill pay fees every month which leaves me with a sour taste, seeing as how they advertise their accounts as "Free."

I was curious to see how you guys are faring and if truly "free checking" is thing of the past.

[Diavel_guy]

I'm with Navy Federal Credit Union (the largest credit union in the country I believe) and there are no costs associated with the checking. Interest rate sucks, but its checking so I wouldn't expect otherwise.

[Petunia 100]

My checking account is truly free. I have Wells Fargo's PMA account, which normally costs $30 per month, but you can have it for free with 50k of assets. I have that because I moved my traditional IRA over. And because I have PMA, I get 100 free trades each year inside my traditional IRA.

I love that circular logic.

[phantom]

I have a free checking account with Charles Schwab that I used regularly until a little over a year ago. I used online bill pay and never got hit with fees of any sort. They even refund ATM fees charged by other banks to use their ATMs. The catch is that you must have the checking account linked to a Schwab brokerage account. But, there's no requirement to fund or maintain a balance on the brokerage account, so you can just ignore it.

My Schwab account is still open, but I switched my regular banking to a local bank that offered $500 off my mortgage refinance to do so. That's the only reason I stopped using the Schwab account. I have no complaints.

[kork13]

I use USAA for my checking, which is totally free -- they even refund any ATM fees I may get charged during the month by other banks. Unfortunately, they're not totally available to anybody, since they require a military affiliation in your family....

However, there are plenty of good options still out there. Credit unions are generally pretty good about having no fees, but if your current CU is starting to tack on fees, you can look elsewhere. I also use Pentagon FCU, which doesn't charge any fees. I believe ING Direct (or whatever it's called now), Ally Bank, and Discover Bank (all online banks) offer no-fee checking. You might also try searching through BankRate.com -- at least in the past, they had a big listing of what banks offered what types of savings, checking, and CD accounts, so you can probably compare alot of them all at once on there.

[dczech09]

Here is the scoop with bank accounts- you can have low fees and lower interest rates, or higher fees and higher interest rates. Ultimately it averages out.

The bank or credit union needs to make money to cover costs of operations. Costs of operations include the interest rates they pay you on the deposit accounts. So if they are paying you a higher interest rate, where are they getting the money to do so? They have to get it from somewhere. Either they charge a higher interest rate on debt products, or they charge higher fees.

Since lenders are extremely competitive with debt products, and the demand for debt is relatively inelastic, lenders typically get interest rates on debt products near prevailing market rates. This means that they must charge higher fees if they are going to offer higher deposit rates.

So how do we as consumers deal with this?

The purpose of a bank account is to hold money for a short amount of time (typically less than 5 years). So the whole idea of bank accounts really is not to make money or build wealth. The purpose of bank accounts is to park money- that is it. So getting interest on deposits should not be much of a priority.

So find a bank with low fees and the interest rate on deposits will follow suit.

I go through US Bank myself. I also have my emergency fund through an online bank. I do not pay monthly fees to have an account, do not pay any maintenance fees, and I do not get charged for bill pay. At the same rate, I do not receive much for interest on my deposits.

[MonkeyMama]

I've always had 100% - no hoops/free checking, with local credit unions. Some credit unions are terrible. Some are great. Just chiming in to say one credit union is one credit. We've used 3 CUs in the past few decades - only changed to our current one because we combined assets and moved to another city. Never charged a fee for anything, that I can think of. (Not for bill pay, ATMs, $0 or $1 minimums, yadda yadda).

Both banks and CUs will charge you fees if you have a higher-interest rate and drop below the minimum. I prefer to avoid the hassle and only use my checking account as an conduit to deposit money and make transfers (to higher interest-rate accounts). So basically, the balance is always about $0 and I don't care about the interest. I don't have direct deposit or use debit cards either - which is a pretty common workaround. Maybe some day if I have direct deposit, I will chase higher interest rates on our checking.

[bUU]

I have a free checking account with Charles Schwab that I used regularly until a little over a year ago. I used online bill pay and never got hit with fees of any sort. They even refund ATM fees charged by other banks to use their ATMs. The catch is that you must have the checking account linked to a Schwab brokerage account. But, there's no requirement to fund or maintain a balance on the brokerage account, so you can just ignore it.

Both Schwab and Fidelity offer comparable accounts (at Fidelity, it's called the Fidelity Cash Management Account), and I think they're about as free as we're going to get these days. They refund the fees other banks charge for using their ATMs, and don't even charge ATM fees for international withdrawals, IIRC. I'm actively using my Fidelity Cash Management Account as our family checking account. Bill Pay is easy-to-use (and free, of course). It was easy to set of EFT connections to a local credit union (which I use for ATM deposits, only), and to our high-yield savings account (to sweep money into when our checking account balance gets too high).

[Goldy]

Ally is totally free and has one of the best interest rates around plus has all the modern tools like bill pay and reimburses you for ATM fees. It's the best bank I have used yet.

[disneysteve]

I've always had totally free checking. Our account is now with Bank of America, which is I think the 5th bank that has owned my account since I opened it back in college. But all along it has been free. I've never really understood all the folks who complain about their checking account fees. Why not just open a free account somewhere?

[bUU]

I dumped Bank of America in December because they refused to give me a free checking account without maintaining a $50k balance at an utterly unacceptable interest rate. They must really like you.

[disneysteve]

I dumped Bank of America in December because they refused to give me a free checking account without maintaining a $50k balance at an utterly unacceptable interest rate. They must really like you.

I can assure you that I do not maintain a 50K balance.

[bUU]

What do you do to make them like you so much?

I just checked to see if BoA changed anything since December. They do have a new eBanking account which is free if you go paperless and teller-less, but you still pay fees to the owners of other bank ATMs.

The also have a new Enhanced checking account, which is free with a daily balance of $5,000.

Also, the $50,000 limit has been reduced to $20,000 (which makes sense, since that was the threshold for free checking from their biggest competitor here - the bank we were originally going to switch to, TD Bank).

Nice changes. I wonder why the branch manager didn't mention that the changes were coming down the pike, when he tried to get me to keep our account open. Regardless, it still would not have been enough to have gotten us to stay with BoA - at least we wouldn't have left that $50,000 there. Even though BoA ATMs are everywhere, they are nowhere near where my spouse works, and so being able to use any ATM for free is a big advantage we cannot do without. However, that new eBanking account is interesting, if only because it gives us remote deposit back on our Windows Phones. I'll have to think about that.

[Petunia 100]

I dumped Bank of America in December because they refused to give me a free checking account without maintaining a $50k balance at an utterly unacceptable interest rate. They must really like you.

I am not a B of A customer any longer, but I just want to pipe up and say that the 50k doesn't have to be in cash. They include all of your accounts. So if say, you own ETFs in your IRA, that can count.

To get the Wells Fargo deal I mentioned above, I transferred my trad IRA from Vanguard to Wells Trade. I still own my Vanguard ETFs, but now they make my checking account free.

Also at Wells Fargo, you can get the mid-service level checking account free if you have a Wells Fargo mortgage.

Mr Nice Guy, do you have a mortgage? Is it serviced by a bank which also offers checking accounts? If yes to both, you might want to see if you are entitled to a free checking account.

[bUU]

I am not a B of A customer any longer, but I just want to pipe up and say that the 50k

Now $20k

doesn't have to be in cash. They include all of your accounts. So if say, you own ETFs in your IRA, that can count.

Yup, but we found Merrill Lynch sucked compared to Fidelity, and our moving our investments to Fidelity is actually what predicated the problem in the first place (and provided its solution, incidentally - see above).

Mr Nice Guy, do you have a mortgage? Is it serviced by a bank which also offers checking accounts? If yes to both, you might want to see if you are entitled to a free checking account.

That was another thing that BoA really screwed up on. We have excellent credit. It makes no sense that TDBank would offer us decent terms for a refi and the bank we had been with for almost twenty years would not.