How to land a great -- and still free -- checking account

Ink pen on check

We don't ask a lot from our checking accounts.

We just want a way to pay our bills and tap ATMs for a little cash without a monthly fee and other charges that needlessly drain our balance.

But many banks -- especially the big banks -- are putting an end to the free checking accounts that millions of us have come to depend on.

That will have many consumers seeking a new home for their money over the next few months, and we think they'll like what they find.

Despite everything, two-thirds of all banks still offer free checking.

Just follow these smart moves, and you can find a great checking account with the right combination of cheap and useful we all need.

Smart move 1. Just say no to these fees.

Pick an account that doesn't impose:

Monthly maintenance fees. These will eat your balance alive, and the banks that charge 'em just keep charging more.

Per-check fees. There should be no charge and no limit on the number of checks you can write each month.

Starter check fee. Any bank that charges you for the blank starter checks that tide you over until your personalized checks come doesn't deserve your business.

Fees for paper statements. If getting a monthly statement in the mail is important to you, you shouldn't have to pay extra for it.

Check image fee. There should be no stealthy charges to display your check images online or in your paper statements.

Smart move 2. Don't sign up for an account with a minimum balance requirement.

"Free checking" shouldn't be dependent on keeping $10,000, $1,000 or even $100 in your account -- or a combination of accounts. You want a checking account that imposes no monthly fees, even if your balance is $1.

Smart move 3. Get free use of any ATM.

When you use a debit card at another bank's ATM, you can be charged a fee by the other bank and your bank. It's now an average of $3.50 and increasing every year.

If you make two ATM transactions per week at that rate, that's $28 per month or $336 per year just to access your money.

The most consumer-friendly checking accounts impose no fees for using another bank's ATM and reimburse you for the fees other banks impose on you. In other words, you get to use pretty much any ATM for free.

The next best deal is where your bank imposes no fees for using a so-called "foreign ATM," but won't reimburse you for the fees the owner of that machine might impose.

Smart move 4. Forget about earning interest.

The best traditional checking accounts are paying interest rates of less than 1% right now. Usually a lot less, like 0.10%.

You'll be making nickels and dimes with rates like that. Literally. A balance of $1,000 earning 0.10% will earn 8 cents a month even if the interest is compounded daily.

This shouldn't matter. In times like these, the primary goal of your main checking account is to avoid fees.

Don't even worry about interest on your checking account at this point. Keep immediate funds in there and transfer savings into a higher-yielding account.

So be wary of bank customer service reps urging you to "move up" to an interest-bearing account. It probably comes with more fees and is a bigger money-maker for the bank.

Smart move 5. Don't opt in for overdraft protection.

Banks used to automatically enroll checking account customers for overdraft protection.

That allowed them to unwittingly overdraw their account with debit cards, incurring a $30 fee for every purchase they made.

The Federal Reserve finally stepped in and told banks that customers had to actually sign up for such programs -- and all of their fees.

Don't succumb to the scare tactics banks use to push overdraft protection onto their customers. You'll likely get a letter in the mail, or they may even call you.

They'll say that if you don't opt for overdraft protection, your purchases could be declined if you overdraw your account.

That's OK. It's better to have your purchase declined than to be socked with a $30 fee for that cup of cappuccino that puts you over the limit.

Tell your bank that you not only want to opt out of overdraft protection for debit card purchases but for checks and automatic bill payments as well.

Smart move 6. Make sure transactions are fairly processed.

Banks and credit unions use several systems for processing checks and debit card transactions.

The worst way is to pay the day's biggest checks and debit card transactions first. If they overdraw your account, the bank can bounce all smaller transactions, charging an insufficient funds fee for each of them.

You want a bank that processes payments smallest to largest.

Citibank actually made headlines this summer when it switched to this more consumer-friendly way of clearing checks.

Look for a checking account agreement that says, "Items presented for payment on the same day will be paid in amount order, smallest to largest," not "We reserve the right to honor checks in any order we may choose."

An acceptable, although less desirable alternative, is a bank that processes transactions in chronological order.

Smart move 7. Get a free, fast online bill payment system.

Insist on any new checking account coming with a free, easy-to-use online bill payment system.

You shouldn't have to pay for it with either a monthly or per-bill transaction fee.

A growing number of banks are also switching to systems that pay each bill the same day you ask for it to be paid and agree to have the money deducted from your account.

That's an improvement from many early online payment systems that would take the money from your account and then hang on to it for as long as seven days before paying the bill.

Smart move 8. Shop around for the best deal.

You don't have to run all over town to compare fees and minimum balance requirements.

Our extensive database of checking account terms has that information for scores of banks in your area and Internet banks.

Then call a local credit union.

These member-owned cooperatives usually have great checking accounts and are particularly helpful to low-and-middle-income families or 20-somethings just starting out in life.

You'll have a good idea of who's offering the best deal before you leave the house.

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  • Poor Boy

    I couldn't finish this pie-in-the-sky article. Yes, it would be great if there was a big national bank that was still interested in providing free checking, with free bill pay, and free access to ATM's. But, that was so last year. At this point, I'd be happy with a big bank that only charged $2/mo. fee with no per-check charge, and no minimum balance. Bank's used to make their money based on interest they received from loans, that was funded by depositor's savings. If congress didn't charge tax on those savings, perhaps the banking system could go back to that. But, let's get real, that ain't gonna happen. If this article wanted to really help the consumer reading it, is should have done a little shopping and posted the results. Aside from National banks, consumers may be driven to community banks and credit unions. My experience is that where these banks charge less for their services, their branch offices are few, and far between. And can somebody explain why internet banks, such as ING do not offer free ATM withdrawal and deposits? Why aren't they a member of AllPoint, CO-OP, or Plus, which would provide depositors access to thousands of ATM's across the U.S. for the total banking experience?

  • Justin

    May be pieinthesky for a big bank. But who uses big banks anymore? I get pretty much all of this from my checking account at Independent Bank. Not the free ATM use. But most of the rest.

  • Eugene

    I believe ING Direct offer free withdrawal from AllPoint ATM Network. On the back of their card there's AllPoint Network logo. I used it a couple of times inside CVS stores ATM and never was charged a fee.
    Do not pick at ING please. They do not charge
    inactivity fee unlike other many banks now.
    They offer around the clock 24 hour service unlike other banks.If your wallet is lost or stolen you can call customer service immediately.

  • msgto

    Don't know what all the hubbub is about. I don't think it's that hard to find a bank that doesn't charge a fee, at least if you don't live in the hinterlands. Think of your checking account as a holding cell for direct deposits, bill paying, debit and ATM, and that's about it.