How to (Still) Find Free Checking Accounts

As banks switch to fee-driven models, you can still avoid the expense.

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Two weeks ago, the Wall Street Journal warned that free checking may be coming to an end. Wells Fargo has already announced that they will be ending their free checking accounts on July 1st. One by one, the major banks likely will begin raising minimum balance requirements and instituting fees on their once-free checking accounts, forcing consumers like you and me to find free checking alternatives.

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So how do you find free checking?

First, try a credit union. Credit unions are often very customer-friendly because they are customer-owned. Share draft accounts, the credit union's version of a checking account, usually have very low minimum balances and rarely have a fee. They also have relatively fair overdraft fees and policies so they are not beholden to the profits those fees generated.

By law, credit unions are not open to the public and you must be a member of a group they service in order to open an account. Fortunately, there are credit unions that service a geographic area and you can usually gain entry that way. In addition to free checking, you will often find car loan and mortgage interest rates and fees to be very competitive as well.

Next, consider an online checking account. If you don't want to or cannot join a credit union, the next best option is to try an online checking account. An online checking account at an online bank will usually have no minimums and no fees, some even pay a nominal interest rate as well. Online banks have much lower overhead, as they don't have to pay for branches, tellers, and managers; and so they have historically charged less in fees.

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If you already have an high-interest savings account, check if the bank offers an online checking account as well. ING Direct has an Electric Orange checking account with no minimum, no account fee, and even pays 0.24 percent APY.

Research your options even if your bank hasn't been public about its intent to do away with free checking. If you have scheduled bill pays or pending direct deposits, it will take some time to shift your bank setup. By doing the research up front, you can save yourself some headache in that process.

Not all banks will remove the free checking option, but if they do, you'll be ready.

Jim Wang writes about money at Bargaineering.com. He can also be found writing about travel at Wanderlust Journey.