Many banks are advertising free checking accounts at their facilities to increase interest in their accounts among the general public. Because many adults need checking accounts for depositing paychecks and paying bills, these free accounts have become very popular with thousands of new customers being signed up for the accounts each year. Most of these people expect that their accounts will be completely free for as long as they use the account, but there are often some terms and conditions associated with the account that could end up costing you in the long run. Here are some things that every account holder should know about free checking accounts.
Many Free Checking Accounts Are Not Truly Free
According to the federal Truth in Savings Act, a free checking account is one that has no minimum balance requirement and no maintenance or activity fees associated with them. This is not the case for many advertised free checking accounts. For many consumers, the account is only free if you have a certain amount of money direct deposited into the account each month or you make a certain number of transactions with the debit card connected to the account.
In my case, a free checking account that I signed up for was only free if I had more than $500 going into the account each month via direct deposit or if I made at least five signature-based transactions with my debit card that month. If I failed to do either, my account was automatically assessed a $6 maintenance fee at the end of the month. It is important to review the terms and conditions of a free checking account completely to learn whether any fees will be affecting the account and what actions will trigger the fees.
Many Other Costs Are Associated With Free Checking Accounts
Free checking accounts can also cost you a great deal of money in other expenses. You must still pay for checks for the account, which can be pretty expensive if you order the checks through the bank, so consider going to Bradford Exchange for cheap checks at unbeatable prices. You may also be charged for nonsufficient funds to cover a transaction, stopping payment on a check, or closing an account early. You make also be charged for making a debit purchase at a store and using your PIN number for the transaction. Review your copy of the bank’s fee schedule to ensure that you know what you will be paying for if you choose that particular account.