How to Choose a Checking Account Without Paying Extra Fees

To choose a checking account, start with what it will cost you each month: the maintenance fee and how to avoid it, the overdraft and NSF (non-sufficient funds) policy, and what you pay to get cash. Then check the practical fit: ATM access, mobile deposit, branch access if you need it, and how fast deposits clear. An account that charges no monthly fee and no overdraft fees, with free ATMs near you, will suit many people. This guide shows how to compare accounts line by line, what to do if you have been turned down before, and how to switch banks without bounced payments.

Start with the fee schedule

Federal law requires banks to disclose every fee tied to a deposit account. Ask for the account opening disclosure and the fee schedule, because any fee the bank can charge must appear there ^[1]. The CFPB also suggests asking your current bank for a list of what you pay now, so you can compare it with other banks and credit unions ^[2].

Monthly maintenance fees

Many accounts charge a monthly fee that the bank waives if you meet a condition, such as a minimum balance or a direct deposit. Bankrate's 2025 checking fee study, which covered 245 banks and thrifts in 25 large U.S. markets, found ^[3]:

• 47% of non-interest checking accounts charged no monthly fee, and another 48% waived it with direct deposit.
• Interest-bearing checking accounts charged an average monthly fee of $15.65, and the average balance needed to avoid it was $10,705.

That second figure matters. Keeping $10,705 in checking to dodge a $15.65 fee often makes little sense when the same money could earn more in a savings account. For many people, a non-interest account with an easy waiver is the cheaper choice.

Worked example. Account A has no monthly fee. Account B charges $12 a month unless you keep $1,500 in it. If your balance drops below $1,500 in four months of the year, Account B costs you $48 that year. Write down your lowest balance in a typical month before you pick an account with a balance rule.

Other fees to look for

• Out-of-network ATM fees (covered below)
• Paper statement fees
• Fees for checks, cashier's checks or money orders
• Fees for incoming or outgoing wires
• Fees for closing an account soon after you open it

Overdraft and NSF practices

An overdraft happens when you spend more than you have and the bank covers the payment anyway; you then owe the shortfall plus any fee ^[4]. An NSF fee is different: it is a charge some banks make when they decline a payment, such as a check or electronic debit, because the account is short ^[5].

What the law says about opting in

For ATM withdrawals and one-time debit card purchases, a bank cannot charge an overdraft fee unless you have opted in ^[6]. If you do not opt in, the bank will generally decline the purchase instead, and you pay no overdraft fee ^[4]. That opt-in rule does not reach checks and recurring electronic payments. Banks may still charge overdraft fees on those even if you never opted in ^[6]. You can change your choice at any time by telling your bank ^[4].

What overdrafts cost

• The CFPB says many banks and credit unions charge $30 or more per overdraft, can charge several in one day, and may add another fee if you do not cover the shortfall within a few days ^[4].
• The FDIC notes that some banks charge "continuous" or daily overdraft fees for every day an account stays negative ^[1].
• Bankrate's 2025 survey put the average overdraft fee at $26.77 and the average NSF fee at $16.82 ^[3].

Fees have come down. The CFPB estimated that reported overdraft and NSF fee revenue fell by $6.1 billion from 2019 to 2023, yet consumers still paid more than $5.8 billion in these fees in 2023 ^[7]. Nearly two-thirds of banks with over $10 billion in assets had dropped NSF fees, while 16 of the 20 credit unions of that size still charged them when the CFPB looked ^[5]. So check the policy of the specific bank or credit union you are considering, not the industry trend.

Questions to ask about overdrafts

1. Do you charge overdraft fees at all? How much, and how many per day?
2. Do you charge NSF fees for declined payments?
3. Is there a grace period to bring the balance back up before a fee?
4. Can I link a savings account to cover shortfalls, and what does that transfer cost?

Linking savings is often cheaper. The bank pulls money from savings to cover the gap, and any transfer fee is usually lower than an overdraft fee ^[1][4]. A line of credit tied to the account is another option, though you will pay interest on what you borrow ^[4].

Minimum balances and opening deposits

Two numbers matter here, and they are easy to mix up:

• Minimum opening deposit: what you need on day one. This is often small.
• Minimum balance to avoid the fee: what you must keep each day or on average each month. This is the number that can cost you.

Ask whether the balance test uses your daily balance or your average monthly balance. An average is easier to meet if your balance swings around payday.

ATM networks and getting cash

Using an ATM outside your bank's network can trigger two fees: a surcharge from the ATM's owner and a separate fee from your own bank ^[3]. In Bankrate's 2025 study, those averaged $3.22 and $1.64, for a total of $4.86 per withdrawal ^[3]. In 39% of cases, the bank or account charged nothing for out-of-network use ^[3].

Worked example. If you take out cash from out-of-network ATMs twice a month and pay the average $4.86 each time, that is $116.64 a year. An account with free in-network ATMs near your home and work, or one that refunds ATM fees, removes that cost.

The CFPB suggests asking how many ATMs and branches a bank has, where they are and when they are open ^[2].

Online banks vs. branch banks and credit unions

The right mix depends on how you use money. Use these questions to compare:

The CFPB also suggests checking whether a bank offers online or mobile banking and how good its customer service is ^[2]. A credit union requires you to become a member before you open an account. Whatever type you choose, confirm the institution is FDIC- or NCUA-insured; our guide to FDIC insurance explains how.

If you have been denied: second-chance and Bank On accounts

Banks often check a specialty report on your past checking history before opening an account. Companies such as ChexSystems and Early Warning Services collect this information ^[8]. You may have a negative record if a past account was closed with an unpaid negative balance, if you were suspected of fraud or bad checks, or if you shared an account with someone who had those problems ^[8].

Your rights and options:

• These companies must follow the Fair Credit Reporting Act and cannot report most negative items older than seven years ^[8].
• Nationwide checking account reporting companies must give you a free report once a year on request, and you can get another free one after a bank turns you down based on such a report ^[8].
• You can dispute errors in writing, and reporting companies must investigate and fix inaccurate information ^[8]. You can also dispute with the bank or credit union that supplied it ^[9].
• Some banks will open an account once you repay old fees, and many offer lower-risk checking or prepaid accounts designed to prevent overdrafts ^[9].

These lower-risk products are often called second-chance accounts. A related option is an account certified under the Bank On National Account Standards, set by the Cities for Financial Empowerment Fund. The 2025–2026 standards call for ^[10]:

• A minimum opening deposit of $25 or less
• A monthly fee of $5 or less if it cannot be waived, or $10 or less if it can be waived in at least two simple ways
• No overdraft or NSF fees
• Free in-network ATMs, with out-of-network fees of $2.50 or less (or up to $3.00 with a free partner network)
• Federal deposit insurance

The Bank On website keeps a list of certified accounts, so you can ask a bank or credit union near you whether it offers one.

How to switch banks safely

Switching goes wrong when a payment hits the old account after you have emptied it. Follow this order:

1. Open the new account first. Ask what ID it requires ^[2]. Fund it with at least the minimum that avoids fees ^[11].
2. List every automatic deposit and payment on the old account, using two or three months of statements ^[2].
3. Move your direct deposit. Give your employer or benefit payer the new details. This can take several weeks, so start early ^[11].
4. Wait for the first direct deposit to land in the new account, then move automatic bills to start after that date. Cancel each one at the old bank so nothing is paid twice ^[2].
5. Re-enroll bill pay. If you use your bank's online bill pay, cancel it at the old bank and set it up at the new one, well before due dates ^[11].
6. Leave a cushion in the old account to cover checks or debits that have not cleared ^[2].
7. Watch for deposit holds. A new account under 30 days old can face longer holds on deposited checks ^[12]. Cash deposited in person and electronic payments, such as ACH direct deposits, generally must be available by the next business day ^[12].
8. Move the rest and close the old account once everything runs through the new one. Ask for written confirmation of the closing ^[2].
9. Destroy old checks and cards securely after the account is closed ^[11].

Common mistakes

• Choosing an account for a sign-up bonus without reading the fee schedule. The FDIC warns against letting short-term offers drive the decision ^[11].
• Opting in to debit overdraft coverage without meaning to.
• Closing the old account before the last checks and debits post, which can trigger fees ^[11].
• Picking an online bank when you often deposit cash.

When to get help

If a bank charged you a debit card overdraft fee you did not opt in to, you can file a complaint with the CFPB ^[6]. If you were denied because of a report you think is wrong, dispute it with the reporting company ^[8]. A nonprofit credit counselor can help if overdraft fees are a regular part of your budget.

Your next step

Pull your last three months of statements and total what you paid in monthly, overdraft, NSF and ATM fees. Then ask two or three banks or credit unions for their fee schedules, compare them against that total, and use the switching checklist above if one comes out ahead.