Should I get a checking account with no fees?

When personal finance blogger Allan Liwanag was establishing his career and living paycheck to paycheck, he often had just enough money to cover his expenses each month. Then he ran into an issue with an old checking account that caused him some major grief.

“I forgot to account for the $15 monthly fee that the bank would charge,” Liwanag says. “So, I was short covering my rent. It was a stressful situation because I didn’t know at first if the bank would process the payment for the rent or not.” The bank ultimately covered it, but Liwanag got charged $35 for an insufficient funds fee—on top of the original monthly fee.

Liwanag, who now runs a consumer money-saving website, learned a lot from that experience. The main point being, checking accounts can rack up fees—even for standard activity. As Liwanag learned, fees could eat away at the funds in your checking account, which may become problematic when it’s time to pay bills or take care of other expenses.

What you may not know is that there are no-fee checking account options without the hassle of common fees. Discover^®Cashback Debit, a no-fee checking account, for instance, doesn’t charge any account fees. It also offers no-fee checking without an opening deposit requirement, which is especially beneficial if you’re starting with a small balance or plan to make big withdrawals or transfers.

So, you might be thinking right about now, “What are the benefits of a no-fee checking account?” To answer that question, it’s important to understand what types of fees you may be racking up and how you can make the most of a no-fee account. Let’s get to it.

Your most common checking account fees

Checking account fees can become a trap you may not realize you’ve fallen into until it’s too late. It’s possible to be charged fees just for keeping your account open or for services or features you may have assumed came standard with the account. Being charged a fee doesn’t necessarily mean you’ve done anything wrong, but it’s a hassle you can avoid with the proper research.

But if you want to avoid checking account fees, you’ve got to know what they are. Here are some of the most common fees you could be paying: 

• Monthly fees to maintain or service your account
• Overdraft or insufficient funds fees
• ATM fees
• Fees to order books of checks
• Online bill pay fees
• Stop payment fees
• Replacement debit card fees

Not sure which checking account fees you’re dishing out? Contact your bank or visit its website to get a copy of your deposit account agreement. This document usually has a list of fees related to your checking account that may apply to you.

Another good tipoff: “If you see monthly, quarterly, or annual fees broken out on your monthly bank statement, you’ll know whether your account is truly no-fee,” says CPA and financial analyst Riley Adams, who founded a website with strategies for financial independence.

It’s important to review your statements regularly to identify which fees you are being charged and to determine how that’s impacting your budget.

3 benefits of a no-fee checking account

Now that you’ve identified the many possible checking account fees you could be charged, you’ll find that the benefits of a no-fee checking account go beyond just freeing up some cash in your budget. In addition to the features you’re used to with a regular checking account, a checking account with no fees gives you a financial edge in the following ways:

1. More money for your financial goals. “Having a no-fee checking account can help you get ahead financially,” Adams says. “Instead of paying monthly service fees and even overdraft fees, you can apply that money toward your own financial goals.” The money you save on fees could be used to pay down debt, boost a savings account, or help fund an education, business venture or vacation.
2. Flexibility. A checking account with no fees allows you to bank on your terms. If you’re just starting out, one of the benefits of a no-fee checking account is that you have the flexibility to fund the account with whatever amount makes sense for you. Need to make a big transfer from checking to savings? No problem, since you won’t have to worry about dipping below a minimum balance threshold. You can even go on your merry way using ATMs in your bank’s network without being restricted by fees, and if you accidentally overdraw, your no-fee account’s flexibility may save you the stress of a ding for insufficient funds.
3. No surprises. “Should I get a no-fee checking account?” was an easy question to answer for Liwanag, because he knows exactly what to expect with one. “A plus of no-fee accounts is that you can rest assured that unaccounted-for or surprise fees will not kick you into overdraft,” Liwanag says. (In other words, less stress.)

Manage your finances with multiple no-fee accounts

There are also ways that no-fee checking accounts can help you better manage your income and expenses, in case you’re still wondering, “Should I get a no-fee checking account?”

Liwanag had no problem answering that question: “I have four,” he says, “which I use for easily tracking specific budget categories or expenses.”

As he explains, it can be easier to track expenses when money for different priorities, such as his emergency fund or that much-needed vacation, is bucketed into different no-fee checking accounts. Because he may be charged fees for excessive withdrawals from a savings account, Liwanag uses his no-fee checking accounts to manage the money he’ll need to access frequently for specific purposes.

The best part: Maintaining multiple checking accounts doesn’t cost him extra since a benefit of no-fee checking accounts means fees aren’t in the equation, he says. Some banks do have limits on how many checking accounts you can open, so be sure to consider this if you’re using a multiple-account strategy like Liwanag.

Keeping your expenses organized is a pretty big motivator; so, if you’ve answered “yes” to the question, “Should I get a no-fee checking account?”, the next step is knowing how to choose one.

Find the best checking account with no fees for your needs

Although the benefits of a no-fee checking account are key, don’t forget to consider other checking account features that match your lifestyle. If customer service is your deal breaker, make sure the bank offers it around the clock and that it’s recognized for being top-notch. If you’re always on the go and your phone is right there with you, mobile features and mobile check deposit may be on the top of your list. If you’re regularly withdrawing cash, evaluate the bank’s network of no-fee ATMs and see if an ATM locator is offered to make tracking them down a breeze.

Checking with cash back and no monthly fees

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Discover Bank, Member FDIC

If the benefits of a no-fee checking account are top of mind, you may also want to consider the benefits of a rewards checking account. For example, Discover’s Cashback Debit even offers 1% cash back on up to $3,000 in debit card purchases each month.¹ So on top of a no-fees savings strategy to meet your goals, you could also earn up to $360 a year. (Vacation, here we come!)

Start on your path to smart checking

Clearly, the advantages of a checking account with no fees are numerous. Just be sure to do your research, then compare your findings carefully. The no-fee checking account you choose should ultimately help you reach your personal financial goals. You may find that saving on fees might be one of the key remedies as you deal with financial stress.  

¹ See Deposit Account Agreement for details on transaction eligibility, limitations, and terms.

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