Free checking accounts are getting harder to find at large brick-and-mortar banks. While they typically offer ways to avoid monthly maintenance fees, such as maintaining a minimum balance or direct deposit, these options aren't always easy for many. And even if you can avoid monthly fees, it may not last.
That was the case for many customers of Bank of America (BAC). In January, eBanking checking accounts were converted to Core checking accounts. With eBanking, an $8.95 monthly fee could be avoided if customers used e-statements and self-service options for making deposits and withdrawals. Core checking requires customers to either maintain a $1,500 minimum balance or to make a monthly direct deposit of at least $250 to avoid a $12 monthly fee.
This conversion of checking accounts has created a backlash. More than 379,000 people have signed a petition at change.org asking Bank of America "to not end their free checking accounts."
Fortunately, you can still avoid the fee-laden checking accounts at Bank of America or any of the large brick-and-mortar banks -- if you look online. Several banks offer free online checking accounts with no monthly maintenance fees. They include large, well-known banks like Ally (ALLY), Discover (DFS) and Capital One (COF).
The downside is that you can't receive help with your checking account at a physical branch, but that shouldn't be considered a major loss, considering how little you can't do online, at an ATM or on the phone. The upside of online checking accounts is that they're free. In addition to no monthly maintenance fees, they offer many other perks including free paper checks, no-fee access to ATMs nationwide and mobile check deposits.
If you're not comfortable with online banking, another option is community banks and credit unions. Free checking accounts are much more common at them than at the large banks. One type of checking account often found at community banks and credit unions is called reward checking. The vast majority of these are free, with no monthly maintenance fees.
In addition, they reward customers with additional perks like higher interest rates and ATM fee refunds when they meet monthly requirements, such as debit card usage, direct deposit and e-statements. No fee is charged if the customers fail to meet the monthly requirements. More than 1,000 community banks and credit unions from around the nation offer reward checking accounts.
Of course, moving your checking account to another bank isn't easy. Once things like direct deposit and automatic payments are established, it can take time to move them to another bank. That's one reason so many banks offer new account bonuses: Once you open a checking account and start actively using it, you'll likely stick with it even after being charged fees.
Still, you have options besides signing a petition in hopes a bank will change its position on fees. Finding a free checking account is definitely possible -- it just requires a little effort in moving your business to a new bank or credit union.
Ken Tumin is founder and editor of DepositAccounts.com, which has been tracking and rating the savings, CD and checking account offerings of banks and credit unions for more than a decade.