If you’re not careful, the fees that come with using a checking account can add up quickly.

Getting cash from an out-of-network ATM costs more than ever. Average total ATM fees, including both the charge from your own bank as well as from the ATM’s operator, are at a record high of $4.86, according to a recent Bankrate survey.

The average minimum balance required to avoid a monthly maintenance fee on an interest-bearing checking account has reached an all-time high, too. Customers have to keep $10,705 in their accounts to sidestep a fee of $15.65, on average.

Overdraft fees have dropped slightly from 2024, but they’re still steep, averaging $26.77.

The good news is that you can steer clear of all these fees, especially if you choose your account wisely. Use these tips to keep them at bay.

Beat ATM surcharges

Before you withdraw cash at an ATM, make sure the ATM is in your bank’s network. Some institutions are members of large networks, such as Allpoint or MoneyPass, that allow customers to withdraw money fee-free from tens of thousands of ATMs around the country.

And members of credit unions that are part of the CO-OP network can access more than 30,000 surcharge-free ATMs nationwide.

Another idea: When you use your debit card to make purchases at participating retailers, such as some grocery stores and pharmacies, you may be able to get cash back as part of the transaction (but check first whether the merchant charges a fee for this service).

Keep in mind that retailers often impose lower limits than ATMs on how much cash you can get.

Some banks reimburse customers for out-of-network ATM surcharges. Ally Bank, for example, refunds up to $10 monthly in ATM fees for those who use its checking account or money market deposit account.

Charles Schwab Bank reimburses all ATM surcharges, both in the U.S. and abroad, with its Investor Checking and Investor Savings accounts.

The Cash Management Account from Fidelity Investments includes unlimited reimbursement of ATM fees worldwide, too.

Dodge other fees

You can still find free, no-strings checking accounts. The above-mentioned accounts from Ally Bank, Charles Schwab Bank and Fidelity don’t charge a monthly fee, and other internet banks offer no-fee checking, too, including Axos Bank, Capital One 360, Discover Bank and EverBank.

Even checking accounts that charge a monthly fee usually offer at least one way to avoid it. You may be able to skip the fee if you set up direct deposit, for example.

And plenty of accounts that include a minimum-balance requirement as a qualification have a threshold of less than $10,000. TD Bank, for instance, lets you skip the $15 monthly fee on its Beyond Checking account if you meet one of three requirements, and one of them is maintaining a daily balance of $2,500 in the account.

If you’re enrolled in overdraft coverage, your bank will cover for you if you spend more money than you have in your checking account, but it’ll charge you an overdraft fee.

You can opt out of overdraft coverage; in that case, your debit card may be declined in a transaction if you have inadequate funds in your account.

Alternatively, many banks let you link your checking account to a backup source, such as a savings account, and have money automatically transferred if you overdraw your checking account.

Some institutions charge a fee for this service, but it’s typically less than what you’d pay for overdraft coverage. Other banks offer overdraft transfers at no extra charge.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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If you write a check and later regret handing it off to the recipient — say, because you suspect you’re the victim of a scam, you entered the wrong amount or you mailed it to an incorrect address — you may be able to cancel it with a stop-payment order, as long as it isn’t being processed yet.

First, review your account transactions online or call your bank to see whether the recipient has cashed the check. If it hasn’t cleared, act quickly to request a stop payment. You may be able to put in the order by calling your bank’s customer service department, logging into its website or visiting a branch location, says Darius Kingsley, head of consumer banking at Chase.

You will need to provide details such as the number of the check you’d like to cancel, the payee’s name, the check amount and the date. Keep in mind that a stop-payment order typically expires; depending on the bank’s rules, the order may last from about six months to two years. After you stop the payment, monitor your bank account to ensure that the check isn’t cashed.

Typical fees to cancel a check

Stopping a payment often comes with a fee. U.S. Bank, for example, charges a standard fee of up to $35, and Chase’s stop-payment fee is up to $30.

You may avoid the fee if you have a premium checking account. For example, Chase Sapphire Checking customers, who must hold at least $75,000 combined in Chase deposit and investment accounts or pay a $25 monthly fee, aren’t charged for stop payments.

Some banks skip the fee altogether. Wells Fargo doesn’t charge for stop payments with its consumer and small business accounts, and customers of Charles Schwab Bank’s Investor Checking account pay no fee.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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The U.S. dollar remains strong against other currencies, and for savvy travelers, that means one thing: Get out the passport.

In places where the dollar is especially robust, such as Japan, South America, and Eastern Europe, globetrotters will find that luxury hotels and five-star restaurants seem like a bargain. Plus, there are ways to make your dollars go even further. 

These five money-management tips can save you money or reward you for your spending while you journey overseas: 

1. Say “no” or “non” to foreign transaction fees.

These are fees that your card issuer or bank charges when you use a credit or debit card—and in many cases an ATM—in another country. 

The average fee is 3% on each transaction. That may not sound like much, but it can quickly add up, especially on luxury travel. For example, if you charge $10,000 on your card while on your vacation, you may pay another $300 in foreign transaction fees. 

You can avoid foreign transaction fees by using HSBC credit cards.  

By opening an HSBC Premier checking account, you’ll be eligible for the HSBC Premier Debit World Mastercard®, which doesn’t charge foreign transaction fees.  

2. Get the best deal on exchange rates.

Your overseas purchases made with a credit and debit card often receive a favorable exchange rate when they’re later converted to U.S. dollars. But not every vendor abroad accepts credit cards. Plus, when you arrive at your destination, you might want some local currency to pay for a taxi or tip hotel staff.

To get more for your dollars when converting to another currency, avoid airport currency exchange kiosks. While convenient, airport currency kiosks tend to offer less-favorable exchange rates and charge a hefty fee. 

Instead, see if you can order the currency you need from your local bank or credit union before your trip. You may pay a small service fee, but you’ll likely get a far better rate than at the airport currency exchange kiosk. At HSBC, for example, you can get next-day delivery on foreign currency for a $5 fee.

Or once you’re at your destination, you can get a fair exchange rate by withdrawing local currency from a major bank’s ATM, preferably one that’s in your bank’s network to avoid a fee. HSBC, for example, is part of a network with 55,000 ATMs worldwide. 

Avoid independent ATMs that have higher fees and unfavorable exchange rates. 

Note: Some merchants abroad may offer to convert your credit card purchases on the spot to U.S. dollars. This way you can see immediately how much you’re paying in dollars. But this service usually has fees and poor exchange rates. Instead, pay in local currency. 

3. Earn money while you travel.

Make sure to use a rewards card that gives you points, miles, or cash back whenever you use it. 

If you don’t have a rewards card or the one you have is not that generous, shop around. Many cash-back cards, for example, now offer a few hundred dollars as a signing bonus and return 2% to 3% of the price of each purchase as a reward. Some even offer an introductory 0% interest rate for the first 15 months. 

But credit cards aren’t the only rewards game for travelers. Increasingly, checking accounts are offering generous competitive perks, including cash back. For example, open an HSBC Premier checking account between now and November 22, 2024, and you can earn up to $2,500 for completing certain qualifying activities.*

4. Insure your trip. 

Missed flights, lost bags, or an illness that forces you to cancel your trip at the last minute can happen. 

Purchasing travel insurance can prevent the loss of potentially thousands of dollars in prepaid and nonrefundable trip costs. And it can cover emergency medical care overseas or medical evacuations when your health insurance won’t. A policy can cost 4% to 10% of your prepaid, nonrefundable trip cost, according to InsureMyTrip, a travel insurance comparison site. 

Your credit card may also offer some limited travel insurance benefits. HSBC credit cards, for example, provide some coverage for lost or delayed luggage, hotel burglaries and trip cancellation. 

5. Protect against fraud. 

Nothing spoils a trip faster than being a victim of credit or debit card fraud.

To protect yourself, only take credit or debit cards that you will use while traveling. For many travelers, two major credit cards may be enough. 

Make sure your contact information with your bank is up to date so it can reach you if it spots suspicious activity in your account. And keep the bank or credit card issuer’s international customer service phone number and your card numbers in a secure place separate from your wallet in case your wallet or card is lost or stolen. Report lost or stolen cards immediately. 

Also, notify your bank or credit card issuer of when and where you’re traveling overseas and for how long. While many institutions have fraud detection technology that can tell when you’re traveling, notifying your bank can prevent having any of your card charges or ATM withdrawals declined because they look suspicious.

If you’re a frequent overseas traveler, consider partnering with a bank that has a global presence and premier services, so banking can remain as seamless abroad as it is at home.  

With an HSBC Premier relationship, you can manage your money across borders and time zones while knowing you have 24/7 global support.

* Get a $1,500 Cash Bonus: Add New Money of $100,000 to $249,999 in deposit and/or eligible investment accounts within 20 days of opening your new checking account and maintain the Qualifying Balance for 3 full consecutive months.

Get a $2,500 Cash Bonus: Add New Money of $250,000+ in deposit and/or eligible investment accounts within 20 days of opening your new checking account and maintain the Qualifying Balance for 3 full consecutive months.

Cash Bonus will be deposited into your new checking account within 8 weeks of meeting all the offer requirements.

Savings rates won’t be this high forever. In fact, now may be your last chance to score some of the best savings rates. Rates on many top-earning accounts have noticeably been dropping over the last two weeks, so opening an account now, rather than later, could pay off. However, despite the decline in rates, several accounts still offer impressive yields, in some cases 6% or more. 

6% interest or higher

Here are some of the highest-yielding accounts available, offering at least 6% APY.

Orion Federal Credit Union

APY: 6.00%

Based in Memphis, Tennessee, the Orion Federal Credit Union Premium Checking account offers 6% APY on balances up to $10,000. And higher balances still earn a solid rate of 5%. To qualify for the best rate, you’ll need to make electronic deposits totaling at least $500 per month, as well as spend at least $500 a month on your Orion debit or credit card. If requirements are not met, you’ll be charged a $5 monthly fee. The account has no minimum balance requirements.

Nuvision Credit Union

APY: 6.00%

You can score a 10-month CD with an APY of 6% with Nuvision Credit Union, but you’ll want to act fast. This rate is only available until July 31, 2024. The account has a minimum opening requirement of $1,000, and balances cannot exceed $5,000. There are no monthly fees. After your CD matures, it will convert to a 12-month CD. 

Digital Federal Credit Union

APY: 6.17%

The Primary Savings account from Digital Federal Credit Union offers an APY of 6.17% on balances up to $1,000. Balances above $1,000 will only earn 0.15% APY. There is a $5.00 minimum to open the account, but a minimum balance requirement to earn APY. Plus, there are no monthly fees.

Landmark Credit Union 

APY: 7.50%

With Landmark Credit Union’s Premium Checking account, you can earn up to 7.50% APY, but only on balances up to $500. You’ll need to enroll in eDocuments and have a direct deposit of at least $250 a month to qualify. The Minimum deposit required to open the account is $35 and there are no monthly maintenance fees. While this account offers an extremely impressive rate, it might not be the best place to store your cash, as you’ll only earn 7.50% on the first $500 you put in the account.

5.50% APY or higher 

Though there are few accounts offering rates of over 6%, plenty of high-yield savings accounts and CD accounts offer rates well over 5% — a solid return on your cash. You can browse some of the highest rates available today by checking out our article on the best high-yield savings accounts as well as the best CD rates.

Here are several top accounts offering APYs of 5.50% or more.

Flagstar Bank: High-yield savings account
APY: 5.55%
Minimum opening deposit: $25,000

Poppy Bank: High-yield savings account
APY: 5.50%
Minimum opening deposit: $1,000

Bask Bank: 3 month CD
APY: 5.53%
Minimum deposit: $1,000

Total Direct Bank: 6-month CD
APY: 5.51%
Minimum deposit: $25,000

Paramount Bank: 11-month CD
APY: 5.55%
Minimum deposit: $1,000

You can also use our tools below — powered by Bankrate — to browse rates on both high-yield savings accounts and CD accounts.

What will happen to savings rates in 2024?

When the Federal Reserve began its rate hiking campaign back in March 2022 in order to combat high inflation, savings rates began to rise along with interest rates. Overall, the central bank raised the fed funds rate, a key overnight bank lending rate, 11 times between March 2022 and July 2023, but as inflation began to cool, rates were held steady. And when the pause on rate hikes began, savings rates began to slightly inch down. Rates on savings accounts will soon drop even further as the Fed expects one quarter-point cut later this year.

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Large banks provide vast ATM networks, advanced technology and a wide array of products. But when it comes to interest rates on savings accounts, they’re often overshadowed by small banks and credit unions. While a number of local institutions and internet banks recently offered rates of 5% or more on savings accounts and money market deposit accounts, interest rates on some large banks’ accounts have barely budged since the Federal Reserve Board started hiking short-term rates in March 2022.

A 2023 research paper published by the UCLA Anderson School of Management concluded that customers of large banks are willing to accept low rates on their savings in exchange for other benefits large banks provide. Small banks are compelled to offer higher rates on deposits in order to stay competitive, the economists found. 

The economists also concluded that customers of small banks are more price-sensitive than large-bank customers, who typically have higher incomes and live in urban areas. Small banks and credit unions tend to charge lower fees for monthly account maintenance and overdrafts, too. 

Large banks have also benefited from inertia, says Ken Tumin, founder of DepositAccounts.com, a website owned by LendingTree. Many customers of large banks don’t pay attention to what they’re earning on their savings after they open an account, providing little incentive for banks to raise rates, he says.

If you’re looking for a higher yield on your savings, check out accounts from internet banks, which offer many of the best deals. These institutions can offer extremely competitive rates because they don’t have to spend money on brick-and-mortar branches.

You can compare current rates on savings accounts by using the tool below.

The Fed left interest rates unchanged at its March meeting but signaled that it will likely cut rates later this year. If that happens, institutions of all sizes will lower their rates, too. Look for rates on high-yield online accounts to fall first, Tumin says. Some online banks have already reduced rates on certificates of deposit in anticipation of a Fed rate cut.

Fortunately, there’s no need to pledge fidelity to one bank or credit union. You may choose, for example, to locate your checking account at a small bank or credit union that doesn’t charge a monthly fee and invest your emergency savings in a high-yield online savings account.

Choosing the right credit card

Generally, interest rates on credit cards from small and medium-size banks and credit unions are lower than rates on cards issued by large financial institutions, even for borrowers with good credit, according to a recent analysis by the Consumer Financial Protection Bureau. For example, the median interest rate for people with good credit was 28.20% for large credit card issuers compared with 18.15% for small issuers, according to the CFPB. 

While that’s a significant difference, carrying a balance on a credit card with an 18% interest rate is no bargain, says Ted Rossman, senior analyst for CreditCards.com. Before March 2022, when the Federal Reserve Board embarked on a series of rate hikes in an effort to throttle inflation, it was possible to find credit cards that charged as little as 6% or 7%, but that’s no longer the case, he says. 

Use the tool below to compare fast, personalized credit card offers.

Instead of hunting for a low-rate credit card, Rossman says, endeavor to pay off your card’s balance every month so that you avoid interest altogether. Consumers who don’t carry a balance can come out ahead with the numerous perks that rewards credit cards from big banks offer, such as frequent-flier miles and cash back on a variety of purchases. (Kiplinger keeps a list of our favorite rewards cards). 

While the CFPB found that credit cards from large banks were more likely to charge annual fees, there are plenty of major credit cards — including some with generous rewards structures — that charge no annual fee. 

Big banks are also more likely to offer balance-transfer deals with an interest rate as low as 0% for a specific period. While these offers provide a way to reduce the interest you pay on your debt, they make sense only if you pay off the balance before the 0% window expires. Otherwise, you’ll likely end up paying a double-digit rate on the remaining balance.

How to break up with your bank

Switching to a bank or credit union that offers a higher yield on your savings could significantly increase the amount of interest you earn. However, the process may take several weeks. 

What you need to do:

• Open the new account before closing the old one. You may be able to do this online. Make sure your initial deposit is large enough to avoid low-balance fees.
• Contact your employer (or the Social Security Administration, if you’re receiving benefits) and arrange to have direct deposits switched to your new account. Make sure you include all accounts, such as TreasuryDirect, that deposit funds periodically.
• Contact all providers, such as utilities and streaming services, that debit your account, and provide them the information for your new account. If you use your bank’s bill-pay service, cancel the bill payments at your previous bank’s site and enroll at your new bank’s site.
• Make sure all automatic payments and outstanding checks have cleared before closing your old account.

Note: This item first appeared in Kiplinger's Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Writing a check to give as a wedding gift seems so simple. You don't have to spend time scouting the registry; you just jot down the information, seal it in a card, and dash off to the party.

But if you don't take a minute to think about what exactly you're writing, your gift could cause a headache for the newlyweds.

My husband and I were exceedingly lucky to have guests who shared their generosity with us when we got married. But once we started trying to deposit our checks, we ran into snags and rejections based on how the checks were written.

Some bank tellers required us to both be present to cash a check; otherwise, we crossed our fingers and hoped we wouldn't get arrested for identity theft using digital deposit.

Thankfully, we never had to face security or make a dreaded phone call asking a guest to send a newly written check, and from experience, I'm ultra-aware of the importance of getting a check right when I'm giving one as a gift to my friends and family.

As wedding season is here, I'm sharing the knowledge with you on how to write a check for newlyweds, by following these guidelines.

1. Beware of writing 'and' on a wedding check

In my professional life as an editor, I pay careful attention to word choice. When I'm writing a check to shove into an envelope on the way to a wedding venue, though, I'm somewhat less attentive.

Much as in literature, there's a huge difference between using the words "and" and "or" on a check. If you write a check to newlyweds using both their names with an "and" between them (i.e. "John Smith and Jane Pierce"), they will both likely need to endorse the check to deposit it — and their particular banking institution might be more stringent in checking identities or requesting a joint account to deposit it.

However, if you write their names with an "or" between them ("John Smith or Jane Pierce"), "either could deposit it," confirmed Maribel Ferrer, a spokesperson for Chase.

You can also use this tip for other situations. For example, if you're writing a check for a child, such as for a baptism, bar mitzvah, sweet 16 or quinceañera, you can write the minor's name along with "or [parent's name]" to ensure it can be deposited however the family manages finances.

2. Check what name(s) you're putting on a wedding check

About a third of married women didn't change their last names, according to a 2025 YouGov survey, but it's still common to celebrate a wedding by congratulating "Mr. and Mrs. Smith."

You might want to avoid that celebration on a check, though. First, it's possible the newlyweds have no intention of sharing a last name in marriage, and the heteronormative tradition doesn't apply to same-sex marriages. Second, even if one newlywed does take the other's last name, the timing of getting legal documents and bank accounts updated might not align with the timing of your check.

"If you know the couple has a strong preference one way or the other, the basic tenet of good etiquette is to address people how they want to be addressed," Daniel Post Senning of the Emily Post Institute told Kiplinger. If you know what they want to do with their names — or are close enough to ask the couple or someone close to them — etiquette dictates that's what you can use on a check.

One more basic point that's true for writing a check for anything: Make sure you get the names right.

That means check the spelling and the names themselves. Many artfully designed wedding invitations and websites use first and middle names rather than last names, which could be misleading or unhelpful if you're not familiar with both spouses. When in doubt, use the first and last names you know best for a check.

You can write a wedding check with one name

Rather than addressing a check to both newlyweds and trying to navigate getting each name right and making sure to clearly write "or," a simple solution is to address a check to only one of the newlyweds.

"People don't always have joint bank accounts or the same or new last names, so often structurally it's easier to make it out to one person," said Senning.

Ferrer at Chase had one more suggestion for this method: "Use the memo line to indicate it is a wedding present."

How would you choose which name to use? You can follow an etiquette path of your choosing, Senning said. "The very traditional orientation is that gifts are sent to the bride," he explained.

However, he said, another perfectly valid modern option is that "you might think of the person you were the most connected to." If you're going to a wedding because your cousin is the groom, for example, you can make the check out to him.

You could also write a check out to "cash," but that's a potential security issue, as anyone could deposit it. Be aware, too, that some banks will not accept checks marked for "cash" or will have specifications around them.

Basic check-writing tips

Any time you write a check, you should follow some basic guidelines, many of which are outlined in the above graphic from Chase, including:

• Use permanent ink when you write a check
• "Make sure that the words and numbers match the written amount. For example, One hundred dollars, $100.00," Ferrer said
• Either use the entire payee line when you write the recipient's name or draw a line to fill the space, so that if someone nefarious finds the check, they can't add anything to it

How to give money as a wedding gift

If you have concerns about using paper checks, many brides and grooms these days also use electronic methods, such as a "fund" you can contribute to on a wedding website.

The Emily Post Institute approved of online "funds" (such as for a honeymoon) in its wedding registry etiquette guide, but Senning pointed out that some guests don't like that these online funds sometimes have fees, which is why people might opt instead for giving in the form of cash or a check.

You can also ask the couple if they'd accept gifts in other electronic forms, such as Venmo or Zelle, or, as Knight Kiplinger suggested, give a gift certificate to a place they're likely to frequent. Kiplinger's advice is also useful if you're not comfortable giving cash as a gift.

That's understandable: As with so much around marriage, wedding gifting norms are changing, including the fact that registries are becoming less prioritized. (Speaking for myself, we had a small registry — frankly, we didn't have enough space in our apartment for more objects, which might be a widespread issue for younger generations, given the housing market.)

Senning had another recommendation: "A cash gift, depending on how it's presented, can feel impersonal. So try making an effort to personalize the gift — to include a note with it or make something out of the exchange, even just tucking it into a card, look the person in the eye, smile, wish them the best on this next stage of their life."

Ultimately, it's not the end of the world if something is a little off with a check. My husband and I managed everything just fine in the end — and believe me, we appreciated every single one of those checks, as I'm sure every newlywed does. These tips could just give you some peace of mind for the next wedding you celebrate.

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Using an ATM that doesn’t belong to your bank costs more than ever, but other bank fees are taking a nosedive, according to the latest research.

Your bank’s ATM isn’t always the most accessible or convenient option when grabbing cash on the go. However, out-of-network ATMs typically come with pesky fees attached to your transaction. ATM fees are comprised of two parts — a surcharge from the ATM owner and a fee from your own bank. According to a new study, those fees just got higher.  

Elevated ATM fees

Consumers are paying an average of $4.73 for out-of-network ATM fees, a new record high, according to Bankrate’s 2023 study on checking accounts and ATM fees. That’s one cent more than the previous record in 2019 and seven cents more than last year. The $4.73 fee is broken down into a $1.58 bank fee and a $3.15 surcharge from the ATM owner. So you may find it more expensive to visit ATMs outside your bank’s network. 

Bankrate has tracked this information since 1998 and shows ATM fees continuing an upward trend throughout the 26-year-long study. In recent years, many banks have aided in avoiding fees by offering ATM locators, building out massive ATM networks, and even reimbursing a portion of monthly ATM fees. 

Record lows in other fees

Although ATM fees are on the rise, other bank fees are nosediving. Overdraft fees are one of the largest fees your bank can charge, costing consumers as much as $38 per occurrence. Still, the average overdraft fee dipped to $26.61— down 11% since 2022 and the lowest in 19 years. Similarly, the average nonsufficient funds (NSF) fee plummeted to $19.94, a 25-year low. Despite the declines, overdraft fees and NSF fees are still charged by 91% and 70% of accounts, respectively, the study found.

As of Q4 in 2022, the Consumer Financial Protection Bureau (CFPB) reported a 48% reduction in bank revenue from overdraft and NSF fees compared to Q4 of 2019. Despite the sharp reduction in revenue, these fees still cost consumers a total of $7.7 billion last year. 

Fees vary by area

ATM fees add up quickly, but there are some metropolitan areas that have higher fees than others. In a survey of 25 major metro areas, here are the five with the most expensive average ATM fees: 

• Atlanta, GA, $5.33
• Phoenix, AZ, $5.24
• Detroit, MI, $5.21
• Cleveland, OH, $5.13
• San Diego, CA, $4.99

Here are the five major metro areas with the least expensive average ATM fees. 

• Boston, MA, $4.24
• Philadelphia, PA, $4.31
• Seattle, WA, $4.34
• Cincinnati, OH, $4.45
• Baltimore, MD, $4.52

Checking accounts

The Bankrate study also looked at checking account fees and minimum requirements, as well as the difference between noninterest-bearing checking accounts and interest-bearing accounts.

Noninterest-bearing checking accounts are mostly free

Checking accounts that don't earn interest are still mostly free, the survey found. Roughly 45% of so-called noninterest-bearing checking accounts are free, meaning they don't charge a monthly service fee. Another 42% of noninterest accounts have no monthly fee when certain direct deposit requirements are met. In total, 87% of noninterest checking accounts are free.

Interest-bearing checking accounts have steep fees, offer little yield

Interest-bearing checking accounts typically charge more than their noninterest-bearing counterparts. The average monthly fee on such accounts is $15.33, down 5%  from $16.19 in 2022, but far more than the $5.31 average monthly fee for accounts that don't bear interest.

Interest-bearing accounts often require that a customer maintains a high balance to avoid the monthly fees. The average minimum balance needed to avoid the service fee on an interest account is $8,684, Bankrate reported, versus $469 for a noninterest account.

While interest checking accounts charge a high fee and require a hefty balance, they offer little in the way of yields. The average APY on interest checking accounts inched up to 0.05% in 2023 following two years of yielding a record low of 0.03%, the study showed.

Many savings accounts offer better returns, including high-yield savings accounts. You can use our tool, in partnership with Bankrate, to get the best rate on savings accounts. 

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Citi plans to implement its previously announced "relationship tiers" program in stages beginning this month for existing U.S. retail banking customers, a bank spokesperson tells Kiplinger.

The bank announced plans last year to start retiring U.S. retail bank account packages in favor of the tiers, which are similar to travel rewards programs offering more perks as balances increase, as Kiplinger previously reported. 

The program went into effect last August for all new customers and existing customers were given the option to convert to the new program at that time as well, the spokesperson said. About 200,000 existing customers have taken advantage of the program so far, he said. Remaining customers will be converted over to the relationship tiers throughout 2024, he added. 

The announcement last August came after bank failures in early 2023 left many Americans unnerved and wondering whether their their bank deposits are safe, with some weighing their options for banks and credit unions. Citi, like a number of other banks, has offered fee breaks and other perks to customers who keep high balances in deposit and investment accounts.

The tiers provide services such as waived monthly service fees on checking and savings accounts, waived Citi fees at non-Citi ATMs, and professional financial planning services, Citi said in its August announcement.

“Similar to an airline or hotel rewards program, as a customer’s combined average monthly balance grows, clients may unlock relationship tiers, allowing access to more benefits and services from Citi Priority, Citigold or Citigold Private Client,” the bank said.

Combined balances to be tracked

“These latest changes are designed to create a more seamless experience for our customers and make it easier for them to get personalized advice and access their finances,” said Craig Vallorano, head of Retail Banking.

Under the program, the bank will track a customer’s combined average monthly balance and assign a relationship tier, automatically linking eligible deposit and investment accounts. 

Customers who are not in a relationship tier can avoid paying monthly service fees by making monthly direct deposits of $250 or more in their checking accounts, having an average monthly balance of $500 or more in their savings accounts, or by having both a checking and savings account with Citi.

For families, Citi is offering customers enrolled in its Family Linking program the ability to move to a higher relationship tier by combining average monthly balances with those of eligible family members who live with them in the same household.

Citi said it began to eliminate certain retail consumer banking fees in 2022, including overdraft fees, returned item fees and overdraft protection fees. It also said that it planned to remove additional retail banking fees in the coming months.

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The U.S. Postal Service began offering expanded financial services in a handful of cities last fall, a potential first step toward a return to postal banking. In a pilot program, select Postal Service locations in four cities—Washington, D.C.; Falls Church, Va.; Baltimore; and the Bronx, in New York City—are offering services including check cashing, bill paying, ATM access, and expanded money orders and wire transfers. For example, customers can cash payroll or business checks of up to $500 and put the money onto a gift card.

According to the Federal Reserve, about 63 million Americans are under- or unbanked, meaning they do not have regular access to commercial banking and instead typically rely on high-fee options such as check-cashing outlets, money orders and prepaid cards. The USPS, which has more than 34,000 locations, could help close that gap. Advocates for postal banking see an opportunity for the Postal Service to provide access to an essential financial system while bolstering its own economic position. The USPS Office of the Inspector General reported that fees for financial services, even if set at a low cost, would bring in nearly $9 billion a year if 10% of those who are currently underbanked use the service.

It would require an act of Congress to reestablish postal banking beyond the services available in the pilot program. Progressive members of Congress have supported legislation that would reestablish postal banking. For example, Sen. Kirsten Gillibrand (D-N.Y.) has proposed the Postal Banking Act, legislation that would create a postal bank to provide low-cost basic financial services to people who do not have access, or have limited access, to America’s banking system. But Sen. Ted Cruz (R-Texas) and 18 Senate colleagues recently signed a letter opposing the idea.

The idea of banking at the post office isn’t new: Congress passed legislation to establish the Postal Savings System in 1910. It was designed to encourage working people and immigrants to use the banking system. The program started in 1911, and by 1947, deposits in the system had peaked at $3.4 billion. In the 1960s, deposits declined as more consumers turned to banks. In 1966, the Postal Service began to phase out the program.