Free Checking Accounts? Not Anymore.

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There are about 125 million checking accounts in the US.

You probably have one to operate your financial life.

Although they’re an essential tool for managing personal finances, banks have increasingly imposed fees on these accounts. From monthly maintenance charges to overdraft fees, the cost of using a checking account can add up quickly. While many consumers are accustomed to these fees, the recent announcement from Chase Bank is a signal that even more charges may be on the horizon.

Winter…I Mean, A Bank Fee, is Coming

In recent news, Marianne Lake, CEO of consumer and community banking at JPMorgan Chase, warned that customers may soon face new charges on their checking accounts. Chase plans to pass on costs to customers if Washington enacts new regulations capping overdrafts and late fees. Lake further indicated that other banks are likely to follow suit.

Currently, many banks offer free checking accounts with stipulations, such as maintaining a minimum balance or setting up direct deposits. But with these potential regulatory changes, even accounts that are currently fee-free could soon carry charges.

Even before Chase’s announcement, fees on checking accounts were on the rise. According to Bankrate, the average monthly maintenance fee for checking accounts increased to $5.73 in 2023, which equates to roughly $68 annually. Interest-bearing accounts carry even higher fees, often exceeding $16 per month. Overdraft fees, another common pain point for consumers, now average around $30–$35 per transaction.

These rising costs can take a significant toll on everyday consumers, especially those who don’t meet minimum balance requirements or frequently use out-of-network ATMs.

As banks like Chase prepare to implement more fees, the promise of free checking accounts becomes increasingly uncertain for customers.

So, what can you do to avoid these costs and save some coin?

I use a fee-free checking account, and I’m not getting paid to say that.

The Charles Schwab Investor Checking™ account offers a refreshing alternative to fee-laden traditional bank accounts. This online checking account, linked to a Schwab One® brokerage account, offers a number of benefits that can save consumers money:

- No Monthly Fees: The account doesn’t charge monthly maintenance fees, regardless of your balance or account activity.

That’s right. Let your $12 sit there for months if you want.

- Unlimited ATM Fee Rebates: One of the standout features is Schwab’s unlimited ATM fee rebates, including rebates for international ATM fees. This benefit is particularly valuable for frequent travelers.

Love this feature, and confirm it automatically happens as they say, as evidenced by my Budapest trip below.

- No Foreign Transaction Fees: For those making purchases abroad, Schwab doesn’t charge foreign transaction fees, making it a great option for international spending.

- No Overdraft Fees: Schwab doesn’t charge overdraft fees, which is a significant cost-saver compared to the $30–$35 per overdraft transaction that most traditional banks impose.

- Competitive Interest: While not the highest on the market, the Schwab checking account offers an interest rate that often surpasses what traditional banks offer on their checking accounts. (Don’t bank too much on this!)

Because online banks operate without the overhead costs of physical branches, they can afford to provide more favorable terms to consumers. This allows everyday customers to avoid unnecessary charges and keep more of their money.

For everyday consumers, avoiding unnecessary fees is a simple way to save money. Here’s how you can benefit from an online checking account like Schwab’s:

- ATM Rebates: Frequent ATM usage, especially out-of-network, can lead to hefty fees. Schwab’s unlimited ATM fee rebates can save hundreds of dollars annually.

- No Overdraft Fees: According to the Consumer Financial Protection Bureau (CFPB), overdraft fees cost Americans over $12 billion in 2020 alone. Schwab’s lack of overdraft fees can save consumers from contributing to this burden.

- No Maintenance Fees: By avoiding monthly fees—typically $5 to $15 per month—customers can save money that traditional banks would otherwise take just to maintain their account.

As Chase and other traditional banks move toward adding more fees to their checking accounts, online solutions like the Charles Schwab Investor Checking™ account stand out as a cost-effective option. With no monthly fees, unlimited ATM rebates, no overdraft or foreign transaction fees, and competitive interest, Schwab provides an ideal checking account for customers looking to save money and avoid the growing wave of fees.

Shop around, look for online checking accounts and see what comes up.

You may be saving yourself some serious coin!

Save On,

Chris

(Disclosure: I’m a Schwab client and use the Investor Checking account. I am not compensated by Schwab.)