Checking accounts that charge no monthly fee are getting harder to come by. In the first half of 2019, the number of credit unions offering free checking accounts fell 59%, and the number of banks with free checking dropped 37%, according to economic-research firm Moebs Services. Now only about 20% of banks and credit unions still offer free checking. The reason for the decline? Free checking usually isn’t profitable for the institutions that offer it, says CEO Mike Moebs.
Luckily, finding a free checking account isn’t difficult if you’re willing to bank online—and you can even earn interest. For several years, the free account from Bank5 Connect (opens in new tab) has offered a 0.76% yield, and the minimum balance required to earn it is a reasonable $100. Plus, the bank reimburses up to $15 a month in surcharges from out-of-network ATM operators. The free account from Alliant Credit Union (opens in new tab) yields 0.45% on all balances if you receive electronic statements and make one electronic deposit monthly, and it reimburses $20 monthly in ATM fees. When you join the credit union, Alliant will pay a $5 membership fee to the charity Foster Care to Success on your behalf and make a complimentary $5 deposit into an Alliant savings account for you.
Free accounts for frequent spenders. If you use your debit card regularly, consider an account that rewards you for it. Discover’s (opens in new tab) checking account offers 1% cash back on up to $3,000 in debit card purchases each month, and the bank has eliminated nearly all account fees. If you have $2,500 in monthly direct deposits or keep a $2,500 minimum balance, the Rewards Checking account from Radius Bank (opens in new tab) pays an unlimited 1% back on signature-based debit-card purchases (transactions verified with a PIN don’t qualify). In addition, you’ll earn 1% interest on a balance of at least $2,500 or 1.2% on a balance of $100,000 or more, and ATM-fee rebates are unlimited.
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