Getting Going: The Death of Free Checking –

Keeping your checking account free is getting much tougher.

Facing new revenue-crimping regulations, big banks are whittling away at free-checking offerings and adding stricter requirements for avoiding monthly maintenance fees, from higher minimum balances to mandatory direct deposits of at least a certain amount.

The percentage of free accounts—those with no monthly fee and no minimum balance requirement—has fallen to 65% from 76% a year ago, according to a recent survey of checking accounts at large banks and credit unions.

Navy Federal Credit Union/PRNewsFoto

Credit unions are a good source of low-cost checking accounts.



Banks are increasingly penalizing little-used checking accounts and favoring households’ most-active accounts, which generate more income and have a better chance of producing more business down the road.

This summer, Wells Fargo replaced its free-checking offering with something called “Value Checking,” which requires either a monthly direct deposit of $250 or more or a minimum balance of $1,500 to avoid a $5 monthly fee.

New Restrictions

Some banks are imposing other restrictions. Bank of America in August rolled out its “eBanking” checking account, which doesn’t require a minimum balance, but does demand that users make deposits and withdrawals electronically and forgo paper statements to avoid an $8.95 monthly fee. And under changes made in September, Citibank‘s “Basic Checking” customers need to complete at least five transactions—which could include debit purchases, automated-teller-machine withdrawals, checks or direct deposits—or pay an $8 monthly fee.

Next year, bank bottom lines will be pinched again when the “interchange fees” that merchants pay for debit cards are cut, which may trigger another round of account changes. In February, for example, J.P. Morgan Chase will no longer waive its monthly Chase Checking fee if depositors make five or more debit-card purchases. Those who use direct deposit will be able to avoid the maintenance fee—but only if each deposit is at least $500.

Better pay attention.