Now, you can open an account online on your couch — and frequently without any fees. But, not all online accounts are made equal. Many of them bury fees in the fine print. If you want the truly fee-free option, stick around and learn how to get a truly beneficial online account!
Zero-Fee Accounts: Reality or Marketing Hype?
Many banks offer “no-fee” accounts, but that doesn’t mean free. The monthly maintenance fee is likely free, but you might pay for paper statements, ATM withdrawals, overdrafts, and more. Before starting an account, make sure to review the fees and look past the marketing material.
There are many ways you can be charged and not realize it. Some banks offer “free” checking but charge for deposit checks or sending a wire. Others may have inactivity fees for not using the account enough. Look through the entire fee schedule before starting your account to avoid getting a surprise later.
Some online banks will also encourage you to sign up by offering grace periods. They might waive fees for the first few months but start charging you later. While the offers might look good, be sure to know what happens when the gravy train ends.
Some accounts also offer “free” accounts because they are tiered. You could have a free account but no mobile check deposit, with limited transactions. To get a mobile check deposit and an increased transaction limit, you would have to pay. If you want free banking, make sure your free account includes your desired features.
Key Features to Consider
A truly free online account should eliminate common banking costs while offering convenience. Here’s what to check before signing up:
No Monthly Maintenance Fees
Some financial institutions require you to keep a minimum balance in your account to waive that pesky monthly fee. Others offer online accounts with no-strings-attached account options. When you’re doing your due diligence, compare your spending and depositing habits with the minimum balances for the account. Staying fee-free also extends to whether or not your financial institution can automatically withdraw the funds from your direct deposit paycheck.
ATM Access and Withdrawal Fees
Even when your online bank account doesn’t charge service fees, withdrawal fees can accumulate quickly. Find out whether the bank has a free ATM network or how it handles out-of-network ATM fees. Does the bank reimburse unlimited ATM charges, or does it cap the number of free out-of-network withdrawals each month? If you take out cash frequently, choosing a bank with a large ATM network or one that works in partnership with other banks for free surcharge withdrawals can be beneficial.
Overdraft and Insufficient Funds Charges
Some of the online bank accounts allow overdrafts without penalty, while others apply a high fee for each transaction. Do you need an overdraft protection service, or will you be better off with a bank that declines the transaction if there’s not enough money? Some banks also offer alternative options to prevent customers from getting charged expensive overdraft fees, such as a linked savings account or a credit line. Understanding a financial institution’s policy on the handling of overdrafts can help prevent other similar surprises in the future.
Foreign Transaction Fees
Do you travel outside of the country frequently? If so, having an account with low or no foreign transaction fees is a wise choice. Some banks offer global account options with no extra charge for overseas purchases, and searching the bank offerings for accounts that provide you with access to international ATMs and competitive conversion rates, as you might also see, can also affect your expenses. You might consider a new wave of online banks and fintech accounts that cater to people who travel often. These accounts typically have multiple currency support in addition to offering advantageous exchange rates.
By carefully evaluating these features, you can find an online bank that aligns with your financial habits and ensures that you’re not paying unnecessary fees.
Digital Convenience with No Hidden Costs
You use online banking to simplify your life — not to make it more expensive. You want an account with mobile check deposit, free bill pay, and instant transfers and do not have to worry about added fees, no matter how they’re hidden. You should also expect a well-designed app that offers advanced security features.
Making the Right Choice
With so many choices available to you, don’t settle. Weigh your options, including features and fees. If you find a fee-free account, it should be convenient, accessible, and transparent, without hidden charges down the line.
With that information in mind, there’s no reason you can’t open a bank account online that meets your expectations while saving more of your money right where it belongs: in your wallet.
