4 Alternatives to Big Bank Checking Accounts

Local banks and credit unions are just two of the smarter spots to keep your money.

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Big banks have been in the news lately, and the news hasn't been good. From increased credit and debit card fees, to the reported death of free checking, large financial institutions have been struggling to respond to new regulations that have cut into their profits. As a result, many are reporting that bank fees will be going up.

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If your bank has raised fees or even introduced new ones, you do have some options. Below we look at 4 alternatives to big banks that offer low fees, and in some cases, no fees at all.

1. Local Banks: Sometimes big things come in small packages, and that's certainly true with community banks. From rewards checking to free debit cards, many community banks offer perks and low fees that the big banks just can't match. And it's always nice to walk into a bank and have the manager great you by name.

2. Prepaid Credit Cards: What were once thought of as a poor substitute for traditional plastic, prepaid credit cards have come into their own. With many offering low fees, free direct deposit, and free online bill pay, a prepaid card can be an alternative to both traditional banking and credit cards. The key is to avoid prepaid cards with high fees. Look specifically for cards that waive monthly fees and do not charge fees when you use the card. And if you plan to use the online bill pay feature, make sure the card does not charge for this service.

3. Credit Unions: If you've never considered a credit union for your banking needs, you could be missing out on some great deals. Credit unions often offer the best rewards checking accounts and credit cards. As an example, PenFed's gas reward credit card is a market leader offering 5 percent cash back for purchases at the pump. And with monthly direct deposit of just $500, its checking account is free. It's important to recognize that you must become a member of a credit union before you can take advantage of their banking offers. Fortunately, it's easy to join many credit unions, including PenFed.

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4. Online Banks: Finally, there are many online banks that offer both free checking and rewards checking. For example, ING Direct still offers free checking that even pays interest. And with online banks, you can usually find savings and money market accounts with no fees and the highest interest rates available. You can check out a list of some of the best online banking options here.

DR is the founder of the popular personal finance blog, the Dough Roller and credit card review site, Credit Card Offers IQ.