The Free Checking Offer
Banks offer free checking as a way to get attention and save you money. They usually require that you make a small deposit in order to open the account, and you qualify for free checking. There should not be any annual fee or low balance fee on a free checking account. Some banks also offer free checks for life with free checking.
Since the financial crisis, it's become harder and harder to find free checking. However, it still exists. Small banks and credit unions are especially likely to offer the service, and you can even earn interest with some online checking accounts.
- Online Interest Checking Accounts
- How Credit Unions Work
- Where to Find Checking Accounts with No Fees
Free Checking Features
To make sure you get the good deal on a free checking account, Look around for a free checking offer that has the following:
- No Low Balance Fees
- Free ATM and/or Debit Card
- No charge for ACH and Direct Deposit transactions
- Free online access to your account
- Unlimited monthly checkwriting
- No minimum checkwriting amount
Bonus Free Checking Features
For the best in free checking, see if you can find free checking that also offers:
- At least one free book of checks (or free checks for life)
- Free online bill pay
- Overdraft protection plans (watch out for the costs!)
- No charge to use ATMs outside the banking family
- Reimbursement of ATM fees charged to you by another ATM
Free Checking Drawbacks
It is important to know what you are not getting when you use a free checking account. Free checking typically doesn’t pay interest on your money. This is not unique to free checking – most checking accounts don’t pay much. However, you can link your account to a higher yielding vehicle like an internet bank account and earn interest on the cash you’re not using.
It's also possible to find free checking accounts that pay interest. Reward checking accounts pay more than most savings accounts, but you have to jump through some hoops.
Another service you might miss is the ability to view your checks after they’ve been paid. Some people like to see a copy of the actual check and the payee’s signature. Free checking usually doesn’t offer this, although a few free checking accounts put images online. My opinion is that you don’t need it, especially for personal accounts. There are plenty of ways to track payments – and you can always order a copy from a free checking account if there’s a particular check you want to track.
Finally, you’re giving up perks like free Stop Payments and Cancelled Check Return when you use free checking. Because I rarely use these services, I do not think you are missing much. However, if your situation is different you may want to shop around.
If you keep a relatively small balance in your checking account, the free checking accounts will probably cost less than an account with premium services. If you ever need to use those services, just pay the small fee in the free checking account.
Why Banks Offer Free Checking
Banks offer free checking as a way to drum up new business. If you go to a branch and ask to open a free checking account, they will be glad to help you. However, they will also try to capture other assets and business from you.
Free checking accounts get customers in the door. Therefore, you shouldn’t be surprised if you get a friendly sales pitch while you’re opening your free checking account.
