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New year's resolution: No more bank fees

To avoid those pesky banking fees, look for a bank that offers free checking, pays interest on the account, and reimburses ATM charges.

By Cheapism.com Jan 3, 2014 3:46PM
This post comes from Louis DeNicola at partner site Cheapism.com

The New Year is an opportunity to start fresh, and for many folks that means getting your finances in order. Perhaps it's time to wave goodbye to your bank in favor of one that doesn't charge ridiculous fees and pays relatively high interest.


Switching banks may seem like a big deal, but a few hours of work are all that's usually necessary. Woman writing in check book © Bruce Laurance/Digital Vision/Getty ImagesIt's easy to open a new account, which may require a minimum deposit of $25 or $50. The process can get a bit hairy, however, when it's time to transfer funds from the old account to the new and close out the pre-existing account. (You can't do that before all outstanding checks have cleared and you've notified any company or charity that is paid through an automatic deduction from your account.)


But identifying which bank deserves your business may be the most time-consuming element. We found several banks that offer free checking accounts with no minimum balance. Some also offer free ATM usage nationwide, do not charge overdraft fees, and even pay interest that's as high, if not higher than, rates paid for savings stowed at the major banks.


Free checking

Most of the free checking accounts we found that fit these criteria operate almost entirely online, and may not be suitable for every consumer. For starters, although these no-fee checking accounts accept direct deposits and account holders can deposit checks using a smartphone or computer, depositing cash can be a hassle when there's no branch or ATM nearby.


Most customers deal with this by having two accounts, one with a local credit union or a large bank with a local branch, and the other with the online bank. With fees so low and interest rates relatively high, and ATM withdrawal fees almost always refunded, the online banks typically hold most of a customer's assets and support day-to-day spending while the local bank (or branch) serves as an intermediary.


High-yield checking accounts

For consumers seeking the best return on their assets, high-yield checking accounts offered by regional banks and credit unions are usually the best option. The institutions offering such accounts may not boast the latest technological wizardry, such as taking deposits through smartphones, or the lowest fees, but they're a good choice for anyone who wants to maximize the return on the money in their checking account.


Bankrate.com posted a list of 56 banks with high-yield checking accounts in 2013; interest rates range from 0.51 percent up to 3.25 percent. Some even provide ATM-fee reimbursements. These accounts often require account holders to sign up for online banking, opt out of paper statements, bring along a monthly direct deposit or online transfer, and use their debit card for a minimum number of purchases each month.


Some high-yield accounts are only available to residents of select states or regions (e.g., Jeff Davis Bank for depositors in Louisiana and Southeast Texas) while others can be opened regardless of residency (e.g., Cross Keys Bank). These banks often set a limit on the amount of money that qualifies for the high interest rate, usually somewhere between $10,000 and $25,000; beyond that (or if the requirements aren't met) the rate drops. 


Consumers who don't maintain a large balance in their checking account but want to maximize earnings might look into Extra20 Checking, a service promoted by Santander Bank (formerly Sovereign Bank).  Customers receive $10 a month for paying two bills through their online account and an additional $10 a month if they have a minimum $1,500 in direct deposits. (Direct deposits are also necessary to avoid a $10 monthly account fee.) Santander charges $3 for each cash withdrawal from other banks' ATMs.

 

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26Comments
Jan 3, 2014 4:55PM
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Why the average person uses a bank blows my mind. Use a credit union folks!! Unless your making a 6 figure income you do not need a bank.
Jan 9, 2014 1:54PM
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I can remember when banks actually paid INTEREST on savings accounts- 10% or more.
Jan 9, 2014 2:03PM
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I switched all my accounts over to a credit union last year.  Best decision I ever made.  I haven't had to make one single phone call to investigate mysterious "fees", to ask why my direct deposit was delayed a day...or two...or whatever it took them to get my to bounce an automatic payment or two, or to correct an error.  With WF, one of the above was a weekly occurrence.  Granted, my credit union doesn't have all the online bells and whistles and smart phone connections that WF did, nor as many branches and ATM locations, but it is such a pleasure dealing with human beings who are pleased to have your business and don't view you as a ripe piece of low-hanging fruit to squeeze until you burst.
Jan 6, 2014 11:49AM
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Banks are empowered to subtract a percentage of everything that goes across their desks.  The guberment understands this and recives a kickback for allowing this to happen.  Banks stand by the side of the road and demand a fee to pass.  This has been the case since ancient times.  Nothing has changed for eons and probably never will.  Like prostitution will go on and on so will banking.
Jan 9, 2014 3:31PM
Jan 9, 2014 2:55PM
Jan 3, 2014 4:42PM
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Another pig wanting something for nothing. No wonder this country is going to hell.
Jan 9, 2014 2:13PM
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Here's some advice.  Use a rewards credit card for all your monthly expenses.  Not only do you get something back, but you reduce the number of times you withdraw from your bank account.  You have one bill a month to pay, instead of a dozen or more (or multiple dozens).  Believe me, I have done this for many years and I have never bounced a check in 25 years of banking because of it.  You could possibly pay a little extra for monthly credit card fees, but you are given more control and peace of mind this way.  I write one single check a month, and it's for my water bill.
Jan 3, 2014 5:14PM
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I would not use a bank account for an interest rate.  It would be more for paying bills and no fees. there are way better ways to get a much higher interest rate in mutual funds. banks can be ok if they have low or no fees
Jan 9, 2014 5:14PM
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 Boycott B OF A and Wells Fargo. Even if you make 6 figures a year your still getting over charged. 
 Plus, they don't protect you for most debit card purchase disputes, they charge you to use your debit card or to move money around and in some circumstances will charge you up to $10.00 to get $20.00 out. Not to mention the $35.00 overdraft fee because they over drafted your account do to some .25 cent charge. 
 I have a great bank now, I get reimbursed for all ATM withdraws and have never been charged an over draft fee for anything under $5.00.  
Jan 9, 2014 5:05PM
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CREDIT UNION.  ONLY WAY TO GO.  BANKS SUCK.  THERE LIKE A LEACH ON YOUR BILLFOLD.
Jan 9, 2014 4:35PM
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There's a much easier way -- join a credit uinon!!
Jan 9, 2014 5:33PM
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Credit union...wtf you want to pay for elite execs and corp dividends?
Jan 9, 2014 3:43PM
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I still use a "national bank" (it says so in their name), but they are one of the smaller national banks I think. They offer me better rates on my checking and money market accounts than the credit unions and bigger banks in my area.

When I was looking for an auto loan, I asked them what their rate was. The lady looked at me and said "Hey, our rates aren't that great. You'd be better off looking somewhere else." The new AND pre-owned loan rates were 7.5%. While I didn't get my car loan through them, I appreciated the honesty and the fact that she didn't even try to push an uncompetitive loan rate on me.

I use Sun National Bank. Never an issue or any unwarranted fee. They don't charge me to use other ATMs which is nice, and most convenience stores by me don't charge one either. I really have no complaints with them.

Jan 9, 2014 5:26PM
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They are all scamming you, banks and credit unions alike!  I recently noticed I was no longer earning interest on savings when my pension direct deposit arrives early because the 1st of the month falls on a weekend.  The credit union that I use, and most banks I checked, declare you don't have direct deposit when that happens and then fail to pay interest the following month claiming you didn't have direct deposit the previous month.  What a scam! 
Jan 9, 2014 5:08PM
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The banks will soon be subservient to the economics brought forth by the "green herb".
Jan 9, 2014 5:55PM
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I have B of A and they a great to me.  No fees free safty deposit box, and all the online benifits you can thank of.  I don't understand you people.
Jan 6, 2014 3:59PM
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We need to find a cure and help all those suffering from "Repukelican Brain Dead Syndrome".

Suggestions so far:

1) Botulinum
2) Anthrax
3) Ricin
4) Sarin
5) Cyanide
6) Arsenic
7) Strychnine
8) Amatoxin
9) Hemlock
10) Potasium Chloride

Feel free to add your cures or remedies here. I'm sure that together, we can find the best cure to help these poor, poor brain dead people. Please hurry, they need our help ASAP! Thank you!
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