Top checking account fees to watch out for and how to avoid them

Two women smile as they use in-network ATM, avoiding checking account fee.
December 26, 2024 | Alliant Credit Union

Checking accounts may seem straightforward, but many come with hidden fees that can take a toll on your finances over time. By understanding these fees, you can avoid unnecessary charges and keep more of your money.

According to a 2024 MoneyRates study, Americans pay an average of $167 annually in checking account fees. A 2024 Bankrate survey has found ATM fees have hit record highs, with Americans paying more for out-of-network ATM use than at any time since 1998. These costs can accumulate quietly, draining your balance without you even realizing it.

Here's a closer look at some of the most common checking account fees to watch out for and how you can avoid them.

What you’ll learn

Monthly service fees

Monthly service fees are one of the most common types of fees associated with checking accounts. These fees, typically ranging from $5 to $15, are charged simply for maintaining an account. Many banks apply them to accounts that don’t meet specific criteria, such as receiving a minimum number of monthly direct deposits.

How to avoid:

  • Choose a checking account with no monthly fees: While traditional banks often charge monthly fees, more customer-centric options like Alliant's high-yield checking account have no monthly fees, helping you save more of your hard-earned money.
  • Set up direct deposits: Banks frequently waive monthly fees for accounts that receive a set amount of direct deposit payments each month.
  • Link accounts or make debit transactions: Some banks will waive fees if you link your checking account to a savings or investment account or meet a minimum number of monthly debit card transactions.

Overdraft and NSF (non-sufficient funds) fees

Overdraft fees, which can cost around $35 per occurrence, are charged when a transaction brings your balance below zero. Non-sufficient funds (NSF) fees are similar, applying when a transaction cannot be processed due to lack of funds. Unlike Alliant, which charges no overdraft fees, some banks may even charge you both fees for the same incident, turning a simple mistake into an expensive ordeal.

How to avoid:

  • Monitor your account: Regularly check your account balances using mobile apps or budgeting tools to help ensure you always have enough funds.
  • Enable mobile alerts: Set up notifications for low balances or large withdrawals to avoid triggering an overdraft.
  • Link accounts: Link your checking account to a savings account or credit line to either automatically lower the cost of potential overdrafts or eliminate them entirely.

ATM fees

Using an ATM outside of your bank’s network can result in steep fees, typically ranging from $2 to $5 per transaction. In some cases, you may be charged both by your bank and the ATM operator, doubling the cost.

How to avoid:

  • Use in-network ATMs: Check your bank’s mobile app or website to locate in-network ATMs and avoid paying fees.
  • Find a financial institution that reimburses ATM fees: Sometimes you have no choice but to go out-of-network for an ATM, so choose a credit union or bank that reimburses ATM fees. For example, Alliant offers a monthly rebate of up to $20 for out-of-network ATM fees,1 providing a bit of cushion for those unavoidable transactions.
  • Get cash back: When making purchases at stores, request cash back to avoid ATM fees altogether.
  • Choose institutions with large ATM networks or reimbursement policies: Some credit unions and online banks, like Alliant, offer access to large ATM networks or reimburse customers for out-of-network fees. With the Alliant Visa® contactless debit card, you can access more than 80,000 fee-free ATMs nationwide, plus receive up to $20 per month in rebates for out-of-network ATM use.59

Minimum balance fees

Many banks impose minimum balance fees when your account falls below a required threshold, whether calculated daily or averaged over the month. If your balance consistently hovers near the minimum, these fees can quickly add up, often ranging between $10 and $25.

How to avoid:

  • Keep a buffer in your account: Maintaining a buffer can prevent your balance from unexpectedly dropping too low, especially during the middle of the month when bills might come due.
  • Stay aware of your bank’s policies: Familiarize yourself with your bank’s minimum balance requirements. Use budgeting apps or financial tools to ensure your balance remains above the threshold.
  • Choose flexible banking options: Online banks and credit unions often offer accounts with low or no minimum balance requirements. Alliant’s high-yield checking account is a good example — it has no minimum balance requirements and no monthly fees, making it a great choice for fee-free banking.104

Paper statement fees

Banks often charge a small fee for mailing paper statements, usually between $1 and $3 per month, as an incentive to switch to electronic statements. While the cost might seem minor, it can add up over time if you don’t act.

How to avoid:

  • Go paperless: Switching to statements you receive digitally is an easy and quick way to avoid this fee. Many financial institutions allow you to make the switch through their app or online banking platform.
  • Help the environment: By opting for electronic statements, you can reduce both your costs and your environmental footprint, contributing to less paper waste.

Lesser-known fees

Beyond the typical fees like service and ATM charges, banks often hide additional fees in their terms that you might not even realize you're paying.

  • Check fees: Banks may charge you for ordering checks, particularly for special types like cashier's checks or rush deliveries. How to avoid: Try to minimize the need for checks by opting for online bill pay or other electronic payment methods whenever possible.
  • International transaction fees: Traveling abroad with your debit card can result in international transaction fees of 1% to 3% of the total value. How to avoid: Consider having a special travel debit card with low or no foreign transaction fees or use a credit card that offers no foreign transaction fees.
  • Wire transfer fees: Sending money via wire transfer can be costly, with banks charging between $15 and $60 depending on the destination and amount. How to avoid: Look into alternative money transfer services like Venmo for domestic and international transfers, which can offer more affordable rates.

Taking control of your banking experience

Understanding and managing your checking account fees is crucial to keeping your hard-earned money where it belongs — in your account. By being proactive and aware of potential charges, you can prevent fees from chipping away at your savings.

For a more streamlined solution, consider switching to a more transparent and cost-effective option like Alliant Credit Union. Alliant offers accounts with no monthly service fee, no overdraft fees, and no minimum balance requirements. You shouldn't have to pay for the privilege of having a checking account, and at Alliant, you won't have to.


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