Monthly maintenance fees common to bank accounts

Monthly maintenance fees are common among many institutions, and while fee schedules and amounts vary, they’re an annoying reality of many bank accounts. Being aware of the monthly maintenance fee can help place you in a better position to get it waived or avoid it altogether if you find an account that doesn’t have one.

What is a monthly maintenance fee?

Monthly maintenance fees, often called monthly fees for short, are fees that financial institutions charge in exchange for keeping your account open. The fees are usually charged or deducted from your balance at the beginning or end of every month, as stated in your account contract. Many traditional banks see monthly fees as standard practice, while some will only charge them on accounts that offer more features, such as:

• Rewards programs
• Higher interest rates
• Waived transaction fees
• Discounts on other banking products
• Account packages
• Free transfers

What is the average monthly maintenance fee cost?

On average your monthly maintenance fee could be between $10 and $15, which adds up to $120–$180 a year. But the exact amount depends on the specific bank account you choose. Some banks won’t charge monthly fees at all while others may offer ways to waive them.

If you’re looking for fee-free accounts, you’re more likely to find those at online banks than you are traditional banks. That’s because online institutions are able to cut operating costs by not having branches and pass down the savings in the form of fewer fees.

What banking products have a monthly maintenance fee?

Monthly maintenance fees are common on basic deposit accounts such as checking accounts, savings accounts and money market accounts. However, there are a range of other banking products that have monthly fees, so you should speak with your bank and read the terms and conditions before committing to anything.

How to avoid a monthly maintenance fee

Although many banks charge monthly fees, it’s becoming more common for them to offer ways to waive them. And while these conditions may vary depending on the type of account and the institution you choose, a few common ways to waive fees include:

• Direct deposit or bill payment. Make a given number of direct deposits or bill payments totaling a given amount each month.
• Minimum monthly balance. Maintain a minimum balance in that account or in all connected accounts at that bank.
• Link other accounts. Open other banking products or accounts with the same bank and link them to the main account.
• Make a specific number of transactions. Some banks may waive the monthly fee once you meet a minimum number of transactions per month.
• Rewards programs. Some banks may waive account fees for signing up for rewards or loyalty programs.
• Meet eligibility requirements. Children, students, seniors, military members may qualify, so check with each bank to find out if you’re eligible.

Are there other types of recurring fees?

Besides a monthly maintenance fee, some banks charge other recurring fees that could eat into your balance if you aren’t careful. These include:

• Minimum balance requirements. Some banks have minimum balance requirements and will charge a fee every month if you fail to meet them.
• Paper statements. Although many banks have switched to online or eStatements, you may be charged a fee to receive paper statements, so you should make sure to opt out if possible.
• Account inactivity. If you don’t make transactions or hold a balance in your account for an extended period of time, the bank could charge inactivity fees or even close your account.
• Overdraft. While overdraft fees only apply when you make a purchase that brings your balance below zero, they can sometimes be applied multiple times until you bring your balance back in the black.

Bottom line

Bank accounts help you manage money and save for the future, but they often come with monthly fees. While most banks will waive these fees when you meet certain conditions, there are ways to avoid them altogether. Consider choosing a fee-free checking account if you want to ditch monthly fees for good.

Frequently asked questions

• Do business bank accounts have monthly fees?

  Yes. Monthly fees are also common on business bank accounts, but like personal accounts, it’s possible to waive them depending on the bank and account you choose.

• How do I pay monthly fees?

  Monthly fees are deducted directly from your account, so there’s nothing to do on your part.

• When will banks charge dormant account fees?

  The time frame can differ depending on the bank, but these fees are usually charged once your account remains inactive for at least six months.

• How do I cancel paper statements?

  Log in to your online account or contact your bank over the phone or through the branch to cancel paper statements and set up eStatements.

• How can I avoid Bank of America's monthly maintenance fee?

  It depends on the specific account you open with BOA. But generally, you can avoid the monthly maintenance fee when you do one of the following:

  • Maintain a minimum account balance
  • Set up qualifying direct deposits
  • Are enrolled as a student
  • Have more than one linked BOA account
  • Become a Preferred Rewards Program member