Banks and credit unions that charge no monthly fee

Most banks and credit unions now offer at least one account with no monthly maintenance fee. The catch is that the fee is usually waived only if you meet a condition—direct deposit, a minimum balance, a certain number of debit card transactions per month, or some combination. Read the fine print before you open, because the condition you can actually meet matters more than the account name.

Large national banks like Chase, Bank of America, Wells Fargo, and Citibank all have no-fee checking accounts, but each one requires something different. Chase's basic checking has no monthly fee and no minimum balance requirement, but it does require a debit card to be issued (you don't have to use it). Bank of America waives the fee if you maintain a $500 minimum balance or set up direct deposit. Wells Fargo requires either direct deposit or a $500 balance. Citibank's basic checking has no fee and no minimum, but you must use online banking.

Credit unions often have lower barriers. Many credit unions charge no monthly fee and have no minimum balance requirement at all, though you do have to become a member first. Membership usually means living or working in a specific area, belonging to a particular employer or organization, or paying a small one-time membership fee (often $5 to $25). The National Credit Union Administration (NCUA) runs a credit union locator tool on its website where you can search by zip code to find unions you may be able to join.

Online-only banks—Ally, Charles Schwab, Discover, and others—typically have no monthly fee, no minimum balance, and no direct deposit requirement. The trade-off is that you cannot walk into a physical branch. If you need to deposit cash, you will need to use an ATM network or mobile deposit (taking a photo of a check on your phone).

Key Takeaways

  • Most banks waive monthly fees if you meet one condition: direct deposit, a minimum balance, a set number of debit card transactions, or online banking enrollment.
  • Credit unions often have no monthly fee and no minimum balance, but you must meet membership requirements that vary by location and employer.
  • Online-only banks have no monthly fees and no minimums, but you cannot deposit cash at a branch.
  • Read the account terms before opening because the fee waiver condition you can actually meet is more important than the account name.
  • The NCUA credit union locator and your employer's benefits office can tell you which credit unions you are may be able to access to join.

What "no fee" actually means

A no-fee account means the bank will not charge you a monthly maintenance fee. It does not mean every transaction is free. Most no-fee accounts still charge you for things like overdrafts (usually $30 to $35 per overdraft), wire transfers (often $15 to $30), cashier's checks, stop payments, and expedited shipping of a debit card.

Some banks charge a fee if your balance falls below a certain threshold, even if the account itself is advertised as free. Others charge a fee if you do not meet the condition that waives the fee—for example, if you open a no-fee account that requires direct deposit but then stop receiving direct deposits, the bank may start charging you $12 a month. Read the fee schedule, not just the account name.

ATM fees also vary. Most banks let you withdraw cash free at their own ATMs. If you use another bank's ATM, you may pay $2 to $3 per withdrawal. Some banks reimburse out-of-network ATM fees; others do not. If you travel or live far from branches, ask about ATM networks before you open.

Checking versus savings: which account to open first

A checking account is designed for frequent deposits and withdrawals—paying bills, getting paychecks, buying groceries. A savings account is designed to hold money you are not spending right now and usually earns a small amount of interest. Most people open a checking account first because that is where paychecks land and where bill payments come from.

Many banks bundle a free checking account with a free savings account, so you can open both at the same time. The savings account usually has no monthly fee either, though some banks require a minimum balance to earn interest (often $500 to $2,500). If you have very little money to start with, you can open just a checking account and add a savings account later.

Some banks offer a small sign-up bonus—$50 to $300—if you open a new account and meet a condition like setting up direct deposit or making a certain number of debit card transactions within 60 days. These bonuses are real money, but read the terms carefully because missing the deadline or the transaction count means you do not get the bonus.

Documents you will need to open an account

Banks are required by federal law to verify your identity before opening an account. You will need a government-issued photo ID (driver's license, passport, or state ID card) and your Social Security number. Some banks also ask for a second form of ID or proof of address (a utility bill or lease dated within the last 60 days).

If you do not have a Social Security number, you may still be able to open an account using an Individual Taxpayer Identification Number (ITIN). Not all banks accept ITINs, so call ahead or ask when you visit. Credit unions are sometimes more flexible on this than large banks.

You can open an account online, by phone, or in person. Online and phone openings are fastest—usually 10 to 15 minutes—and your account is often ready to use the same day. In-person openings take longer but give you a chance to ask questions and get a debit card issued on the spot.

How to compare accounts before you open

Start by listing what you actually need. Do you receive direct deposit from an employer? Do you need to deposit cash regularly? Do you travel and need ATM access outside your home area? Do you want to earn interest on savings? Do you prefer online banking or in-person service? Your answers narrow down which accounts make sense for you.

Then check three things for each account: the monthly fee and what waives it, the overdraft fee, and the ATM network. A bank's website usually lists the first two in a fee schedule. For ATM networks, search the bank's name plus "ATM locator" or call and ask how many free ATMs are near you.

If you are choosing between a large bank and a credit union, the credit union often wins on fees and customer service, but the large bank may have more ATMs and branches. If you are choosing between a brick-and-mortar bank and an online bank, the online bank usually has lower fees and higher interest rates on savings, but you cannot deposit cash at a branch.

Opening an account online versus in person

Opening online is faster and requires no travel. You upload a photo of your ID, enter your Social Security number, answer security questions, and choose a username and password. Most online accounts are active within hours. You can start using the account to receive direct deposits or transfers from another bank immediately, though you may have to wait 5 to 10 business days for a physical debit card to arrive.

Opening in person takes longer but gives you a chance to ask questions and sometimes get a debit card the same day. You bring your ID and Social Security number, fill out an application (on paper or on a tablet), and a banker walks you through the account options. If you are unsure which account to choose or have questions about fees, in-person is less stressful.

Some banks let you do both: start the application online and finish it in a branch, or open online and pick up your debit card at a branch. If you are opening a credit union account, you usually have to do at least part of it in person because you are also becoming a member.

What happens after you open your account

Once your account is open, you will receive a debit card (usually within 5 to 10 business days if you opened online, or the same day if you opened in person), a checkbook if you requested one, and online banking login information. Set up online banking and mobile banking (the bank's app) right away so you can check your balance, transfer money, and deposit checks by phone.

If you have direct deposit set up with an employer, give your employer your new account number and routing number (both are on a blank check or in your online banking portal). Direct deposit usually starts within one or two pay cycles. If you are transferring money from another bank, you can do this online through your new bank's transfer tool, and the money usually arrives within 1 to 3 business days.

Set up bill pay through your bank's website if you pay bills by check or automatic transfer. Most banks offer this free. You can also set up alerts so the bank texts or emails you if your balance drops below a certain amount or if a large transaction posts.

Frequently Asked Questions

Can I open a bank account if I have been denied before?

Banks check ChexSystems, a database of banking history, when you open an account. If you were denied in the past, you may still be able to open an account at a different bank or credit union, or at the same bank if enough time has passed. Some banks and credit unions specialize in second-chance accounts and have no ChexSystems check. Call ahead and ask.

Do I need a minimum deposit to open an account?

Most banks and credit unions let you open an account with $0 or $1. Some require a small opening deposit (usually $25 to $100), but this is rare. Check the account terms before you open, but assume you can start with very little money.

What if I do not have a permanent address?

You can open an account using a temporary address like a shelter, a friend's address, or a PO box, though banks vary on what they accept. Call the bank or credit union first and explain your situation. Many have worked with people in your position before and can tell you what documents they need.

Can I open an account for someone else?

No. The person whose name is on the account must be present (in person or online) and must provide their own ID and Social Security number. You can open a joint account with another adult, but both of you must sign the paperwork.

How do I know if a bank is safe?

Check whether the bank is insured by the Federal Deposit Insurance Corporation (FDIC) or the credit union is insured by the NCUA. Both agencies protect your money up to $250,000 per account if the bank or credit union fails. The bank's website usually displays the FDIC or NCUA logo, or you can search the FDIC's BankFind tool by bank name.