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Where to Find Free Checking Now

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I just watched a short Bankrate video on the decline of free checking and how many banks are pulling their “free” no interest checking accounts off their menu of options.

It’s becoming pretty clear that “free checking” was, at least in the banking industry, code for “free checking paid for by enormous fees.” Now that the rules for fees like overdraft/NSF fees have been overhauled, banks can no longer live off free checking the way they used to. I’ve long argued that free checking wasn’t actually free because you are paying for it with your lack of interest income. Your opportunity cost is the interest you would’ve earned in a high yield savings account.

So if you want a free checking account, where you should you look? One answer – credit unions.

You Own Your Credit Union

Credit unions are like banks except the shareholders are the account holders. Whereas a commercial bank has to earn a profit for its owners/shareholders, credit unions’ customers are the shareholders. Instead of earning a profit, credit unions work to keep the lights on and return the rest in the form of low interest loans and higher interest deposit accounts. They aren’t there to generate huge profits so they don’t feel the pressure to do so. (there are a lot of reasons why credit unions are great)

Tradeoffs with Credit Unions

The tradeoff is that credit unions are often much smaller than commercial banks, especially compared to the largest commercial banks. This means slightly more hassle when you need to find an ATM or make a deposit (though they are getting pretty good at expanding their networks) but ultimately you jump through fewer hoops for everything else.

Eligibility Requirements

The only other hassle I can think of when it comes to credit unions is eligibility. By law, a credit union has to have rules on eligibility based on something legal (so it can’t be based on race, religion, creed, etc.) like geographic area (residents of a city), employment (employees of a company, or the state), or something like that. In most cases you can figure out a way to join a credit union if look hard enough.

If you’re having trouble finding free checking somewhere, or the free checking you do find has a high minimum balance, consider going to a credit union.

{ 17 comments, please add your thoughts now! }

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17 Responses to “Where to Find Free Checking Now”

  1. Ken says:

    One thing many people forget is that the vast majority of high-yield reward checking accounts are also free checking accounts. There are no monthly maintenance fees even if you don’t make the necessary debit card purchases or the other monthly requirements. If you don’t meet the requirements, you just won’t receive the high yield or the ATM fee reimbursements.

  2. I have has free checking for years at First Union which was taken over by Wachovia which was taken over by Wells Fargo. I’ve free business and 2 personal checking accounts without fees. Sure there isn’t interest, but balances are always below $1000. I’ll trade the interest for the fees.

  3. yakov says:

    you can try boa and ing. ING pays interest (very little)

  4. Matt K says:

    how about the reward checking accounts? the one with minimum credit card transactions per month?

    it’s definitely a hassle, but they’re free, and you get interest.

  5. zapeta says:

    I’d also consider community banks if you can’t find a credit union. A lot of the smaller banks are still doing free checking and you get better service than you would at any of the large commercial banks. As Matt K mentioned, rewards checking is a great way to go if there is a bank or CU near you that offers it. The checking account is free and you earn a good interest rate if you meet their qualifications.

  6. Credit Unions are always the better choice in my opinion.

    But if you can’t find one that’s right for you, there are still enough banks still offering free checking accounts.

    Just take your money somewhere else if your bank starts charging you fees up the wazoo.

  7. Anonymous says:

    I have long felt the attitude of scr** the banks and have been happy with my credit union. With Co-op, their netwok has gotten even larger across the country as well as the world. Unless you have a need for commercial services, most can accept a “bank equivalent” with better service, higher rates, etc. Please do support your local credit union. Affiliation through your local school, church, etc. is all that is needed. Even where you live is sometimes all thatr is necessary.

  8. Shirley says:

    To the Bank of America, I was a number.
    To my credit union, I am a recognized person and treated graciously. A real person answers the phone! To me that’s worth the not receiving interest on checking.

  9. I’ve always been a collector of bank accounts (i.e. using a number of banks, with one primary). I was sad when I moved away from my favorite local bank and could no longer use them. Since then I’ve jumped around from Citi to BoA to Chase, etc. This year Citi started charging me $10/mo on my checking account and that account was shut down quickly (balance in there was approx. $50). Definitely on the look out for a great local bank, I just need to make the effort of opening accounts at a couple and trying them out, especially since I should be in this area for a while now. It’s always nice to keep at least one major bank for traveling so that you can get withdrawals without fees, especially if traveling abroad.

  10. Cory Kaufman says:

    I don’t understand why everybody talks up credit unions so much. I’ve checked out the few that I’m elegible for in my local area, and they don’t seem to offer any great benefits over a bank. Their accounts don’t pay much (if any) interest, they have plenty of fees, and they don’t refund ATM charges (as Schwab bank does).

    I’ve got free MyAccess checking at Bank of America, and while they aren’t any better than the credit unions I’ve researched, at least I can travel anywhere in the US and find a branch or an ATM.

  11. fairydust says:

    I set up a “free” checking account at Citizens bank when they opened a branch within walking distance of our house, just to try them out. That was less than three months ago, and I just received a letter saying if I don’t start using my debit card 5 times/mo or keep a $1500 min balance in the acct, I’ll have to pay $4.99/mo, starting Dec 5. I’m closing the account – that’s ridiculous (IMO).

  12. Lanie says:

    Try First Merit.

    Free checking, checks, wire transfer and an overdraft voucher.

    I don’t work for the bank but seen alot of them lately in Chitown.

  13. jsbrendog says:

    i have chase and haven’t gotten any correspondence about paying fees…are ppl who already had accounts grandfathered in or did i miss something?

    • coakl says:

      HEADS UP for former Wamu checking customers who have grandfathered accounts with Chase! YOUR ACCOUNT WILL BE CONVERTED IN FEBRUARY 2011!

      My husband works for Chase and told me that if you have a grandfathered Wamu Free Checking account your account will be converted to a new fee-based Chase product on February 8th, 2011. The accounts to be converted are:

      Free Extra Checking (free basic checks, no fee for money orders, cashier’s or official checks or traveler’s checks)
      Free Classic Checking (no fee for money orders, cashier’s or official checks or traveler’s checks)
      Basic Checking

      All of the above accounts have no minimum balance requirements and no monthly service fee.

      What you will be converted to is called Chase Total Checking and will have a $10 or $12 monthly fee depending on the state you live in. No more free money orders, cashiers checks, or travelers checks. There will be 4 ways to waive the monthly fee for you “new” account:

      –Maintain an average daily balance in the account of at least $1500
      –Have at least a $5K total deposit relationship with Chase (total of all your accounts including any brokerage)
      –Have at least 1 monthly direct deposit of $500 or more (example: 2 DD’s of $450 each do NOT qualify; at least one of your direct deposits must be $500+)
      –You will also not be charged the monthly service fee if you have paid $25 or more in fees for that statement cycle (example: NSF/OD fee; ODP transfer; stop payment, ATM fees; check printing charges; etc)

      Chase Total Checking is basically a hybrid of the 2 accounts that Chase is eliminating: Chase Checking and Better Banking Checking. Better banking is free if you have the $1500 daily balance or a $5K relationship. Chase Checking is free if you have ANY AMOUNT direct deposit OR 5 or more debit card purchases during your statement cycle.

      BOTH OF THESE ACCOUNTS WILL BE GRANDFATHERED IF YOU CURRENTLY ARE IN THEM NOW. Meaning that if you currently are in Chase Checking you still will be able to use you debit card 5x a month and keep your account free. HOWEVER, existing Chase Checking customers who are using direct deposit to keep their account free will be subject to the new $500+ requirement in February even though you will then be in a grandfathered account.

      So, what are your options you say? Well, since I have one of the free Wamu accounts and:
      –My direct deposit checks are usually not more than $500 (I work part time)
      –I do not maintain a $1500 daily balance in my account
      –I have an online savings account with a high yield so I will not be moving it to Chase
      I will be converting my account to Chase Checking, which gives me the option of keeping my account free by using my debit card at least 5x (the new Chase Total Checking does not offer this feature). I will then be grandfathered into my account come February 2011 when the conversion hits.

      • rain says:

        i work with chase and sure this will give us a lot of question next year. there’s a lot of client already calling about this concern and wanted to close their checking accounts

  14. Reader says:

    As of today Jan. 9, 2011, JPMorgan Chase will not grandfather old WAMU to Chase, will not have any form of FREE anything. Bank employees explained this new checking program were told different in 2010 than what’s happening now. There will be charge for printed cheques for 18.95 per box (basic cheques) in February. So best to order your last 2 free boxes before January ends. JPMorgan Chase will also not allow the $10 monthly fee waived if you use your ATM Debit card 5 times a month. JPMorgan Chase has gone through a lot of effort to be rid of their long time customers. So, close your accounts people and go with a credit union or small local bank in your neighborhood.


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