Will Free Checking Accounts be a Thing of the Past?

Posted by Mrs Money on November 18th, 2010

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Since the Regulation E went into effect in August, Banks have taken a huge hit to their fee income. While the regulation is great for the consumers’ wallet, it hasn’t helped the banking industry. Before the regulation, banks were making a lot of money with fee income, and that went away when banks stopped allowing customers to overdraw their account without their consent. As an effect of the regulation and the drop in fee income, I’m betting that free checking accounts will soon become a thing of the past. I’ve got a couple theories of what will happen to free checking accounts.

Current Checking Accounts

Currently banks offer many different types of checking accounts. The most popular type is the free checking, which normally doesn’t require a minimum balance. Other checking accounts may provide benefits, such as free checks, free cashier’s checks and money orders, and bonus rates on certificates of deposit. While these type of checking accounts provide additional benefits that the free checking accounts don’t, they also normally require minimum balances.

“Free” Checking Accounts in the future

As it’s been in the past, free checking accounts have had no stipulations, and many came with a package of benefits. Free online banking, online bill pay, a free check card, no minimum balance, and no monthly maintenance fees. In the future, I think banks will start charging for some or all of these items. My guess is that banks will either require minimum balances or charge for items ala carte. For instance, if you want online banking, it may cost you $1 a month. Add on bill pay, and that may be another $1 a month.

As it is currently stands, we have two checking accounts. I use one as our “secret account” that I transfer half the mortgage payment into each time my husband gets paid. If it does change where they require a minimum balance, I’ll probably end up opening an Electric Orange checking account with ING. I’m hoping there will always be free checking accounts, because fees are not something I want to pay each month!

I’m probably going to look into other banks’ checking accounts.  Of course, they could change their stipulations too, so I may be in the same boat as if I just stay with our current bank, so who knows if that will do me any good.  I may just go ahead and open the ING Electric Orange checking so I’ve got that account established in the event that I want to make that our main account.  The only drawbacks are that the ATMs for ING are not close to our house at all, so I’d have to do weird things to avoid ATM fees.

I’m really hoping that banks don’t start charging outrageous fees just to have checking accounts.  It’s necessary for so many people to have a checking account, and I know that no one wants to pay just to keep an account at a bank.  Bank fees are no fun at all!

Have you heard anything about free checking accounts changing?

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9 Responses to “Will Free Checking Accounts be a Thing of the Past?”


  1. My credit union recently started charging either $2 or $3 a month fee for my checking account. I can’t remember because it’s a $5 charge, then they give me a credit. I think for $2, so that would make the monthly charge $3. I have two savings accounts with them also, but they don’t charge for savings accounts. I really hate the idea of paying a fee each month, but haven’t gotten around to deciding if I want to make a change. I have one direct deposit going in there and it’s kind of a hassle to make the change over. Plus, ING Direct won’t allow me to pull money from savings accounts so it’s nice to have the checking account for that option of moving money around.

    [Reply]

    Mrs Money Reply:

    Mrs. A- That’s interesting that your credit union already started charging fees! That stinks. :(

    [Reply]

  2. Jessica07 says:

    I haven’t heard anything about the potential change regarding free checking accounts. However, what you say makes a lot of sense, so I am going to do some checking on it. I may even call the manager of my bank and see what his thoughts are on the subject.

    [Reply]

    Mrs Money Reply:

    Jessica- What did you end up finding out? I am thinking that after the first of the year, we’ll probably start seeing changes.

    [Reply]

  3. Jenny says:

    Yeah… Ours, at the state credit union, changed already. Right when this new law went into effect, they sent out letters saying that the checking accounts were changing and some would no longer be free. Basically, they kept them free for older retired people who’d been banking there for a really long time, for students/young people who they wanted to get into business with, for people who had a car loan or something with them, and for rich people who had a high amount of money transferring into the account every month. WE (and many of their own employees, who are also unhappy) are to pay $10 a month UNLESS we have a certain number of signed debit transactions per month. I think it’s 20 and we have so far done okay with this just by asking for things to be run as credit instead of debit. We do not prefer to do this, and it also means we can’t switch to using cash for shopping. It’s one more thing we have to think about. Oh, and they used to transfer money from savings to checking for free a few times a month if we overdrew and now they charge $5. We don’t really use this anyway, but it was nice to know it was there. It’s one of the reasons we switched from our old bank, and now we’re kind of sorry we did! We’re pretty irritated about the whole thing.

    [Reply]

    Jessica07 Reply:

    I’d start buying 20 York Peppermint Patties a month. You think they’d take a debit card for a 25 cent transaction? If not, maybe go through the line multiple times. Tell the cashier to ring each item up separately, or in categories (like cleaning, pet, food, kids, etc.). You wouldn’t have to pay the $10, and your receipts would be easier to organize. :) Hehe

    [Reply]

    Mrs Money Reply:

    Jenny- Wow! That stinks! I hate that there are those stupid stipulations. I don’t want to worry about keeping a certain amount of money in my checking account each month. There are sometimes that my balance is less than $100! Stupid banks.

    [Reply]

  4. Leah says:

    Just got a letter from Chase last week that my free checking would no longer be free beginning in February unless certain requirements were met to avoid a fee. I am unemployed and don’t feel I will be able to meet the requirements each month. US Bank still has free checking but for how long? Like you said..they may end up changing their stipulations as well. I fear free checking is definitely becoming a thing of the past.

    [Reply]


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