Choosing a Cost-Effective Checking Account

The latest Checking Account Fee survey found costs continue to rise, but smart consumers can avoid them altogether.
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What makes for a cost-effective checking account?

Banks advertise them in many creative ways, but the essential goal for a consumer should be to minimize costs. Thus, used cost as its primary criteria in choosing the best checking accounts for 2018. In priority order, the following are the criteria used to compare checking accounts:

1. No monthly maintenance fees – These fees can eat away at your account month after month, so avoiding them should be a top priority.

2. Low overdraft fees – These fees are a big-ticket item. They should be avoided if possible; but in case you incur one or two, it is good to choose a bank that will minimize the damage.

3. Low minimum to start – It is especially important for customers with low balances to minimize fees, so looked for banks that had the above two characteristics and accepted new accounts with relatively low opening deposits.

Based on these criteria, we first list the top ten best checking accounts for 2018 overall, and then the top three in each of these specific categories:

    • Best online checking
    • Best branch-based checking
    • Best checking with no opening minimum

As the chart below shows, some of the top-ten-rated banks overall also ranked in these other categories.

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Best Checking Accounts Overall

Excluding accounts that are only offered to limited customer segments (students, large accounts, additional product relationships), the following were the ten most cost-effective checking accounts identified. None of them charge a monthly maintenance fee.

1. Capital One 360 Checking

With no monthly maintenance fee and no minimum deposit requirement, this account met two of the basic criteria was looking for — but what really made it stand out was the low $9 overdraft fee. With the average overdraft fee at $32.63, this represents a clear savings.

In addition to earning the top spot for best checking account overall, Capital One 360 ranked number one in these categories as well, making it the best online checking account with no deposit:

      • #1 – Best online checking account
      • #1 – Best checking account with no opening minimum

2. Arvest Bank Free Blue

This account has no monthly maintenance fee and, at $17, one of the lower overdraft fees you’ll find. It does require a $50 deposit to open; but realistically, you’d have a hard time operating a checking account with much less than that.

Runner-up for best checking account overall, Arvest Bank also ranked number one in this category:

      • #1 – Best branch-based checking account

3. Texas Capital Bank Smart Checking

This account requires a minimum opening deposit of $100; but with no monthly minimum and a $20 overdraft fee, the pricing would be attractive to many customers.

4. The Huntington National Bank Asterisk Free Checking

The $23 overdraft fee may not be the lowest, but it is still well below the industry average. With no monthly maintenance fee and no minimum opening deposit, this could be an ideal account for customers with small balances.

5. Ally Bank Interest Checking

Checking account interest doesn’t amount to much these days, but it is an added perk on top of freedom from monthly fees and a reasonable $25 overdraft fee. Ally gets an added edge by capping overdraft fees at one per day.

6. Amalgamated Bank Affordable Checking

No monthly maintenance fee, no minimum opening deposit, and a below-average overdraft fee of $25 per occurrence put the Amalgamated Bank Affordable Checking solidly in the top ten checking accounts overall.

7. (tie). State Farm Checking

No monthly maintenance fee and a $25 overdraft fee. The minimum deposit to open an account is also $25, which shouldn’t be a problem for the vast majority of customers.

8. (tie). USAA Bank Classic Checking

This account earned a tie for seventh with the same fee and minimum deposit features and benefits as State Farm offers.

9. TIAA Direct Interest Checking

This account requires a $100 deposit to open, but otherwise the terms are very good — no monthly fee and a $25 overdraft fee with a maximum of three overdraft charges per day. On top of that, they pay a respectable interest rate, ranging from 0.25 percent to 0.71 percent depending on your balance.

10. UFB Airline Rewards Checking

Offering the same terms as the TIAA account above regarding opening deposit, monthly fees, and overdraft charges, this account does not pay interest — although they do allow you the opportunity to earn airline miles based on your debit card activity.



Capital One 360

360 Checking

$ 9.00





Arvest Bank

Free Blue

$ 17.00

$ 50.00



Texas Capital Bank

Smart Checking

$ 20.00

$ 100.00



The Huntington National Bank

Asterisk Free Checking

$ 23.00





Ally Bank

Interest Checking

$ 25.00





Amalgamated Bank

Affordable Checking

$ 25.00



(tie) State Farm


$ 25.00

$ 25.00



(tie) USAA Bank

Classic Checking

$ 25.00

$ 25.00


TIAA Direct

Interest Checking

$ 25.00

$ 100.00


UFB Direct

UFB Airline Rewards Checking

$ 25.00

$ 100.00

Best online checking accounts

If you are specifically interested in online checking, here are some of the best accounts in that category:

1. Capital One 360 Checking 2. Ally Bank Interest Checking 3. State Farm Checking

Best branch-based checking accounts

If you are lucky enough to live in an area where they are offered, the following rated as the best branch-based checking accounts. You can read the details about each account in the overall section above.

1. Arvest Bank Free Blue –

    • Ranked second in the overall category, this bank has 268 branches located in Arkansas, Kansas, Missouri and Oklahoma.

2. Texas Capital Bank Smart Checking –

    • Ranked third overall, this bank has only 14 branches, all located in Texas.

3. The Huntington National Bank Asterisk Free Checking –

    • Ranked fourth overall, Huntington National Bank is a good branch-based option because of its extensive network of over 1100 locations across nine states, mostly in the Midwest.

Best checking accounts with no opening minimum

Finally, if you are starting from zero, here are the best three checking accounts requiring no opening minimum. All made the overall top ten, so you can see details on these accounts in that section of this article.

1. Capital One 360 Checking 2. The Huntington National Bank Asterisk Free Checking 3. Ally Bank Interest Checking

ATM fees and interest checking

There are many individual features that the best free checking accounts may offer, and the significance of these features depends on how you intend to use the account. However, there are two frequently recurring issues that you should also consider:

1. ATM locations

    • ATM fees are usually higher if you use a machine that is not owned by your bank or part of a network to which your bank belongs. So, if you are a frequent ATM user, choose a bank with ATM locations that are convenient to your usual movements.

2. Interest checking

    • You may be attracted by the idea of earning interest on your account, but be advised — for most balances, today’s interest rates typically will not come close to making up for the monthly fee if one is charged. So the priority remains to find an account without a monthly fee. After that, earning interest is a nice plus if you can get it.

Finding an account that minimizes cost and is welcoming to smaller balances is a good start. After that, using that account responsibly by avoiding overdrafts is the way you can get the most use out of your account for the least cost.

Frequently Asked Questions

Q: What is a reasonable maintenance fee for a checking account? 

A: While there are a few different types of fees a checking account might charge, monthly maintenance fees are often the most important factor in choosing a checking account, because those are fees you’ll be paying month-in and month-out, regardless of how you use the account.

There are two ways you can look at the question of what constitutes a reasonable monthly maintenance fee: You can compare the monthly fee to the industry average, or you can compare it to the best deals available.

According to a recent checking account fee survey, the average monthly maintenance fee among banks that charged such fees was $9.76 per month. This would come to $117.12 per year–no small amount if you keep a relatively small checking account balance. If you keep a larger balance, you might be able to avoid the maintenance fee altogether. Many banks set a threshold balance at which you will avoid monthly maintenance fees, and the average of these balances is $3,523.57.

Of course, the best deal available is still free checking. Even though the number of free checking accounts has declined, there are still several banks that charge no monthly maintenance fees. You should look for these deals especially if you can’t afford to keep a large balance in your checking account. You might have the best luck if you are over 50 years old or a student. There are a few banks that offer special, free checking accounts to one or both of those target markets.

Q: What exactly does the word “free” refer to when it comes to checking accounts?

A: Typically, “free” checking refers to a checking account which has no monthly maintenance fees. However, it is worth noting that even these free accounts are almost certain to have other kind of fees, tied to the nature and volume of your activity. Whether you end up being charged those fees depends on how you use the account.

Here are the three major types of checking account fees:

  • Monthly maintenance fees. According to the most recent MoneyRates Index fee survey, these fees average $11.75 a month. Still, you can avoid them altogether, since just over a third of checking accounts do not charge these fees.
  • Overdraft fees. At an average of $28.85 according to the most recent MoneyRates Index survey, these can be the most expensive form of checking account fees. You can avoid these by developing good record-keeping and budgeting habits. If you need to force yourself into those habits, try opting out of overdraft protection.
  • ATM fees. Banks typically won’t charge you for using an ATM within their own network (which may include network alliances with other banks), but if you use an out-of-network ATM you may be subject to two forms of fees–a fee from the bank that owns the ATM, and a surcharge from your own bank.

In short, there is probably no such thing as a checking account that is totally free under all circumstances. However, there are plenty of accounts that can be free if you don’t overdraft your account and take care to use in-network ATMs.

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Moneyrates Team