Banking » Guides » Are Free Checking Account Really Free?
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Are Free Checking Account Really Free?

Free checking accounts have no monthly fees, but they are not free from other fees such as overdrafts or checks. Here's what to look for.
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
Interest Rates Last Update: January 1, 2024
The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
Interest Rates Last Update: January 1, 2024

The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.

We earn a commission from our partner links on this page. It doesn't affect the integrity of our unbiased, independent editorial staff. Transparency is a core value for us, read our advertiser disclosure and how we make money.

Table Of Content

What Are “Free” Checking Accounts?

A “free” checking account is a type of bank account that doesn't charge monthly fees or require a minimum balance to be maintained. This means that you can use the account for everyday transactions without incurring additional costs. Free checking accounts may also offer other benefits, such as unlimited check writing, free debit cards, and free online bill payment.

However, it's important to note that some free checking accounts may still charge fees for certain transactions, such as ATM withdrawals or overdrafts. Additionally, some banks may require customers to meet certain criteria to qualify for a free checking account, such as setting up direct deposit or maintaining a minimum account balance.

Free Checking Accounts Pros & Cons

Free checking accounts seem to be an ideal option, but there are drawbacks to consider. Here are the main benefits and drawbacks:

Pros
Cons
No Monthly Fees And Minimum Balance
Fewer Perks
Access To Basic Banking Services
Limited Availability
Easy To Open And Use
Fees For Certain Transactions
Fewer Restrictions
Usually No Branches

Free checking accounts typically do not charge a monthly maintenance fee or minimum balance, making them an affordable option for those who may not have a lot of money to keep and open their account.

Free checking accounts give you access to basic banking services such as online bill pay, mobile banking, and ATM withdrawals, allowing you to manage your money easily.

Free checking accounts are often easy to open, and most transactions can be done online or through a mobile app, making them convenient to use.

Free checking accounts often have fewer restrictions than other types of accounts, such as savings accounts or CDs, allowing you to make as many withdrawals and transactions as you need.

Free checking accounts may not offer the same perks and benefits as other types of accounts, such as higher interest rates or cashback rewards.

Not all banks offer free checking accounts, so you may need to shop around to find a bank that offers this type of account.

While free checking accounts don't typically charge a monthly fee, some may charge fees for certain transactions, such as ATM withdrawals outside of the bank's network or overdrafts.

Most free checking accounts are online only, so if you're looking for a personalized service at a branch you may be disappointed. 

You may have to rely on self-service options like phone, online chat or FAQ pages.

Which Fees You'll Pay Also With A Free Checking Account?

Although free checking accounts don't typically charge a monthly maintenance fee or require a minimum balance, there are still some fees that you may have to pay with this type of account. Here are some fees you may encounter:

  • Overdraft Fees: If you overdraw your account by spending more money than you have available, you may be charged an overdraft fee.

  • Non-Sufficient Funds (NSF) Fees: If you try to make a purchase or withdraw money from your account but don't have enough funds to cover it, you may be charged an NSF fee.

  • ATM Fees: If you use an ATM that is not in your bank's network, you may be charged a fee by both the ATM owner and your bank.

  • Check Fees: Some banks may charge a fee for ordering checks or for replacing lost or stolen checks.

  • Stop Payment Fees: If you need to stop payment on a check or electronic transaction, your bank may charge a stop payment fee.

It's important to note that not all free checking accounts charge these fees, and some banks may have different fee structures depending on the account. Before opening a free checking account, it's a good idea to carefully review the account terms and conditions to understand any potential fees.

Free Checking Accounts Pros & Cons
Free checking accounts seem to be an ideal option, but there are drawbacks to consider (Photo by Lisa-S/Shutterstock)

How Do Banks Make Money On Free Checking Accounts?

Even though free checking accounts do not charge monthly maintenance fees or require minimum balances, banks can still make money from these accounts in several ways:

  • Other fees: When customer overdrafts their account, they may be charged an overdraft fee, ATM fees etc. These fees can add up quickly, providing a source of revenue for the bank.

  • Merchant fees: When a customer uses their debit card to make a purchase, the merchant typically pays a fee to the bank that issued the card. This fee, known as an interchange fee, can be a significant source of revenue for banks.

  • Support Bank's Balances Sheet: any amount the customer carries in their bank account is good for the bank's balance. Despite the bank can't use it to lend money to other customers (such as savings accounts or CDs) it supports the bank's stability.

  • Cross-selling: Banks may use free checking accounts as a way to attract customers and cross-sell other products and services, such as credit cards, loans, or investment accounts. By offering free checking, the bank can establish a relationship with the customer and potentially generate revenue from other products and services over time.

How To Compare Free Checking Accounts?

When comparing free checking accounts, there are several factors to consider to help you choose the account that best meets your needs. Here are some things to keep in mind:

  • Fees: Although free checking accounts generally do not charge monthly maintenance fees, some may charge fees for other transactions. Be sure to review the fee schedule carefully to understand any potential costs.

  • ATM network: Make sure the bank has a wide ATM network, so you can easily access cash without incurring fees. Check to see if there are in-network ATMs located near you and how many out-of-network ATM fees they charge.

  • Online and mobile banking options: Many banks now offer online and mobile banking options, allowing you to manage your account from your computer or mobile device. Look for a bank that offers easy-to-use online and mobile banking tools, such as mobile check deposit and bill pay.

  • Interest rates: While free checking accounts generally do not earn interest, some banks may offer interest on balances over a certain amount. Also, check the bank's savings accounts and CD options – managing your savings and checking on the same bank is much more comfortable and can get you even more benefits.

  • Customer service: Make sure the bank offers good customer service, whether through phone, chat or email. Check out online reviews of the bank to see what other customers have experienced.

  • Overdraft policies: If you're concerned about overdrawing your account, check the bank's overdraft policies. Some banks offer overdraft protection services or alerts to help you avoid overdrafting your account, while others may charge high fees for overdrafts.

  • Additional features: Some banks may offer additional features with their free checking accounts, such as free checks or ATM fee reimbursement or other benefits and freebies. Consider these features when comparing different accounts.

Which Banks Offer Free Checking Accounts?

Many banks offer free checking accounts, and the availability of these accounts may vary depending on the location and the bank. Here are some of the banks that offer free checking accounts:

Account
APY Checking
Promotion
american-express-bank-logo
Amex Rewards Checking
1.00%
None
ally bank logo
Ally Interest Checking Account
0.25%
None

UpgradeLogo

Upgrade Rewards Checking
None
$200 $200 welcome bonus when you start using a new Rewards Checking account and make 3 purchases with Upgrade OneCard

Sofi bank logo

SoFi Checking and Savings
0.50%
$50 – $300 Minimum deposit of $1,000 – $5,000

capital one bank logo

Capital One 360 Checking
0.10%
None

The American Express Rewards Checking account is accessible to current Amex clients or individuals who have possessed an Amex credit card for at least three months. This account provides access to an extensive ATM network of over 37,000 machines, and it also includes purchase protection for eligible debit card purchases.

Additionally, customers can earn American Express Rewards by using their account debit card to make eligible purchases, which can be combined with their Amex credit card reward points to redeem for travel, experiences, or gift cards.

Upgrade offers a Rewards Checking account that does not charge a monthly fee. While this account does not have its own ATM network, customers can receive a rebate for up to five ATM fees by maintaining a minimum average daily balance or receiving direct deposits into the account.

What sets this account apart is its rewards program. Customers can earn cashback rewards on their debit card purchases, similar to what is available with a rewards credit card.

SoFi is a well-known online bank that provides free checking accounts with no monthly fees, minimum balance fees, or overdraft fees. One of the most noteworthy features of the account is the interest rate offered on balances.

SoFi's checking account provides a high 0.50% APY on balances, making it one of the most competitive rates in the banking industry. Additionally, customers can benefit from early paycheck access, receiving payment up to two days before their scheduled payday

The Capital One 360 Checking account does not require any account minimums, and customers can earn interest on their credit balance. With access to 450 physical locations and a highly rated mobile app, customers can conveniently manage their accounts.

Capital One also offers cafes where customers can complete their banking tasks while enjoying a cup of coffee and receiving advice from a certified money coach. One appealing aspect of this account is the option to activate the Next Day Grace feature.

Ally is an online bank that provides an excellent no-fee checking account.  Customers can access a network of over 43,000 Allpoint ATMs with no fees, and they can also receive up to $10 per month in reimbursements for out-of-network ATM usage in the U.S.

As its name implies, the Ally Interest Checking account offers an interest-bearing option with a tiered rate based on the daily balance. Since it is an online bank, customers can manage their accounts through the online platform or app, both of which are excellent. The app also includes a feature for mobile check deposit, similar to Amex.

Top Offers From Our Partners

Chase_logo

Promotion:
$300 New Chase checking customers enjoy a $300 bonus when you open a Chase Total Checking® account and make direct deposits totaling $500 or more within 90 days of coupon enrollment.. Expired on 4/17/2024
Chase Overdraft Assist
With Chase Overdraft AssistSM, you won’t be charged an Overdraft Fee if you’re overdrawn by $50 or less at the end of the business day OR if you’re overdrawn by more than $50 and you bring your account balance to overdrawn by $50 or less at the end of the next business day

UpgradeLogo

Fees:
No monthly fees No monthly fees and no overdraft fees. Plus get reimbursed for ATM fees with an active account 
Rewards:
Up to 2% cash back Up to 2% cash back on common everyday expenses for active accounts with monthly $1,000 direct deposit, and up to 1% cash back for other purchases 
Promotion:
$300 Use Promo Code “AXOS300” for a $300 bonus when you apply for a Rewards Checking account
Up to 3.30% APY
to get the maximum rate (up to $50,000) you'll need monthly direct deposits of $1,500 (0.40% APY), 10 transaction on your debit card (+0.30% APY), average daily balance of $2,500 on Axos Invest Managed Portfolio (+1.00% APY), average daily balance of $2,500 on Axos Invest Self Directed Trading Account(+1.00% APY) and make full monthly payment on loans (mortgage, personal and auto) with Axos account (+0.60% APY).

Promotion:
Up to $4,000 New customers may earn up to $4,000 when they open an eligible HSBC Premier checking account from January 8, 2024 through March 27, 2024 and complete qualifying activities:

• Receive a cash bonus of $1,500 when you deposit or invest $100,000 – $199,999.99

• Receive a cash bonus of $2,000 when you deposit or invest $200,000 – $299,999.99

• Receive a cash bonus of $2,500 when you deposit or invest $300,000 – 499,999.99

• Receive a cash bonus of $3,500 when you deposit or invest $500,000+

• Earn an extra $500 when you set up recurring monthly Direct Deposits totaling at least $5,000 for 3 months
Wealth Products & Advice
Get access to wealth products, insights and advice from an HSBC Financial Professional through HSBC Securities (USA) Inc
Advertiser Disclosure
The product offers that appear on this site are from companies from which this website receives compensation.
Top Offers From Our Partners

Chase_logo

Promotion:
$300 New Chase checking customers enjoy a $300 bonus when you open a Chase Total Checking® account and make direct deposits totaling $500 or more within 90 days of coupon enrollment.. Expired on 4/17/2024
Chase Overdraft Assist
With Chase Overdraft AssistSM, you won’t be charged an Overdraft Fee if you’re overdrawn by $50 or less at the end of the business day OR if you’re overdrawn by more than $50 and you bring your account balance to overdrawn by $50 or less at the end of the next business day

UpgradeLogo

Fees:
No monthly fees No monthly fees and no overdraft fees. Plus get reimbursed for ATM fees with an active account 
Rewards:
Up to 2% cash back Up to 2% cash back on common everyday expenses for active accounts with monthly $1,000 direct deposit, and up to 1% cash back for other purchases 
Promotion:
$300 Use Promo Code “AXOS300” for a $300 bonus when you apply for a Rewards Checking account
Up to 3.30% APY
to get the maximum rate (up to $50,000) you'll need monthly direct deposits of $1,500 (0.40% APY), 10 transaction on your debit card (+0.30% APY), average daily balance of $2,500 on Axos Invest Managed Portfolio (+1.00% APY), average daily balance of $2,500 on Axos Invest Self Directed Trading Account(+1.00% APY) and make full monthly payment on loans (mortgage, personal and auto) with Axos account (+0.60% APY).

Promotion:
Up to $4,000 New customers may earn up to $4,000 when they open an eligible HSBC Premier checking account from January 8, 2024 through March 27, 2024 and complete qualifying activities:

• Receive a cash bonus of $1,500 when you deposit or invest $100,000 – $199,999.99

• Receive a cash bonus of $2,000 when you deposit or invest $200,000 – $299,999.99

• Receive a cash bonus of $2,500 when you deposit or invest $300,000 – 499,999.99

• Receive a cash bonus of $3,500 when you deposit or invest $500,000+

• Earn an extra $500 when you set up recurring monthly Direct Deposits totaling at least $5,000 for 3 months
Wealth Products & Advice
Get access to wealth products, insights and advice from an HSBC Financial Professional through HSBC Securities (USA) Inc
Advertiser Disclosure
The product offers that appear on this site are from companies from which this website receives compensation.

FAQs

Yes, most free checking accounts can be used for direct deposit of paychecks, government benefits, and other payments.

The main difference between a free checking account and a regular checking account is that free checking accounts do not charge monthly fees or require minimum balance requirements.

Most free checking accounts come with a debit card, which can be used to make purchases and withdraw cash from ATMs.

You can find free checking accounts by researching different banks and credit unions in your area, reviewing their account terms and conditions, or using financial websites that summarize the free checking account options.

Checking Accounts Reviews

Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
Search
Best Checking Accounts
Top Offers From Our Partners

Chase_logo

Promotion:
$300 New Chase checking customers enjoy a $300 bonus when you open a Chase Total Checking® account and make direct deposits totaling $500 or more within 90 days of coupon enrollment.. Expired on 4/17/2024
Chase Overdraft Assist
With Chase Overdraft AssistSM, you won’t be charged an Overdraft Fee if you’re overdrawn by $50 or less at the end of the business day OR if you’re overdrawn by more than $50 and you bring your account balance to overdrawn by $50 or less at the end of the next business day

UpgradeLogo

Fees:
No monthly fees No monthly fees and no overdraft fees. Plus get reimbursed for ATM fees with an active account 
Rewards:
Up to 2% cash back Up to 2% cash back on common everyday expenses for active accounts with monthly $1,000 direct deposit, and up to 1% cash back for other purchases 
Promotion:
$300 Use Promo Code “AXOS300” for a $300 bonus when you apply for a Rewards Checking account
Up to 3.30% APY
to get the maximum rate (up to $50,000) you’ll need monthly direct deposits of $1,500 (0.40% APY), 10 transaction on your debit card (+0.30% APY), average daily balance of $2,500 on Axos Invest Managed Portfolio (+1.00% APY), average daily balance of $2,500 on Axos Invest Self Directed Trading Account(+1.00% APY) and make full monthly payment on loans (mortgage, personal and auto) with Axos account (+0.60% APY).

PNC bank logo

Promotion:
Up to $400 Open a new, select Virtual Wallet product and receive $500/$2,000/$5,000 or more in qualifying monthly direct deposits within 60 days to earn a $100/$200/$400 bonus.
Subject to state availability
PNC Virtual Wallet ® is available in AL, AZ, CA, CO, DC, DE, FL, GA, IL, IN, KY, MD, MI, NC, NJ, NY, NM, OH, PA, SC, TX, VA, WI, and WV. Virtual Wallet ® is offered in the state of MO with the exception of the Greater Kansas City area. Product availability may vary based on where you open your account and the Zip code of your primary

Promotion:
Up to $4,000 New customers may earn up to $4,000 when they open an eligible HSBC Premier checking account from January 8, 2024 through March 27, 2024 and complete qualifying activities:

• Receive a cash bonus of $1,500 when you deposit or invest $100,000 – $199,999.99

• Receive a cash bonus of $2,000 when you deposit or invest $200,000 – $299,999.99

• Receive a cash bonus of $2,500 when you deposit or invest $300,000 – 499,999.99

• Receive a cash bonus of $3,500 when you deposit or invest $500,000+

• Earn an extra $500 when you set up recurring monthly Direct Deposits totaling at least $5,000 for 3 months
Wealth Products & Advice
Get access to wealth products, insights and advice from an HSBC Financial Professional through HSBC Securities (USA) Inc
Advertiser Disclosure
The product offers that appear on this site are from companies from which this website receives compensation.
Top Offers From Our Partners

UpgradeLogo

Savings Rate: 5.07% APY
Minimum Deposit:
$0
 
CIT-Bank-Logo
Savings Rate: 5.05% APY
Minimum Deposit:
$5,000
Quontic bank logo
Savings Rate: 4.50% APY
Minimum Deposit:
$100
 
Advertiser Disclosure
The product offers that appear on this site are from companies from which this website receives compensation.

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