Like it or not, banks are in the business of making money. And two ways they do that is by collecting interest on money they loan and charging fees on the services they provide to their customers -- you. But when the federal government tightens the restrictions on banks, as they did most recently in 2010, most banks' operating costs increase, and their options for covering those costs become more limited. So they typically pass on those higher costs onto their customers in the form of new fees.
So can you completely avoid paying these fees? With so many of them to evade, it's highly unlikely. But to answer the question fully, we have to first look at what banking services are offered for free. We'll narrow it down to just checking accounts, since those are the most popular for handling money and used for day-to-day purchases. Then, let's look at ways we can avoid any additional fees on those checking accounts.
First, is "free checking" even still available? The new federal regulations set in 2010 prevent banks from advertising an account as free if it has any fees associated with it. The regulation was established because so many banks were simply calling accounts free that weren't free at all. Banks were actually waiving the account fees for customers that complied with a set of rules and guidelines. Today, the bank can still waive the fees if customers follow those guidelines, but the accounts can't be promoted as free.
So if you comply by a few rules, you can still benefit from free checking. But what are those rules? Well, that depends on the type of account and bank you're using. For example, in January 2011, Chase offered Chase Checking, which waived its $6 monthly fee if, during the month, you made five or more debit purchases or had at least one direct deposit of $500 or more [source: JP Morgan Chase]. At the same time, Bank of America introduced its eBanking account, which waived its $8.95 monthly fee if you made deposits and withdrawals only electronically or at an ATM, and you received your monthly statements via the Web instead of through the mail [source: Bank of America].
If you need more flexibility in your checking account, you can try a low-cost account rather than attempting a free one. If you join a credit union, you can pay a modest membership fee in exchange for lower costs and some free services. For example, in January 2011, Coastal Federal Credit Union in North Carolina required a one-time $25 deposit into a savings account and a pledge to maintain that deposit from one year to the next. But once customers make the commitment, they can open a fee-waived checking account with more flexibility than the Chase Checking [source: Coastal]. Plus, if you're not able to meet Chase's strict fee-waiving requirements, the Coastal checking could save you almost $50 over Chase in the first year alone, and more than $7 each additional year as long as you still maintain at least $25 in your primary savings account.
Keep reading to find out if you can avoid additional banking fees.