Personal Finance

More than 1 in 4 checking account holders are paying fees. Here's how to avoid them

Key Points
  • Even with plentiful free checking options, some consumers are still paying fees, a new survey finds.
  • Here's how much you stand to lose and steps you can take to save.

Even with broad availability of free checking services, more than a quarter of checking account holders — 27% — are paying fees every month.

For consumers who aren't taking advantage of free checking, those fees add up to an average of $24 per month, or $288 per year, according to a new survey from The personal finance site conducted its online survey Dec. 7-12 and included 3,657 adults, of whom 3,069 have a checking account.

The charges come from routine services or ATM and overdraft fees, the research finds. The average overdraft fee costs $29.80, Bankrate's research has found, while the average nonsufficient funds fee is $26.58.

The annual sums may not sound like a lot, said Sarah Foster, analyst at, but can add up to a hefty $5,000 if you stick with your checking account for 17 years, as the average consumer tends to do.

Nixing bank fees is an easy way to free up a little more money in your budget, especially amid high inflation and with expectations of a recession on the rise. Paying those extra costs may weaken consumers' budgets and make them more vulnerable if a downturn does happen.

"It's just an important and really an easy way to make sure you're not spending more money than you have to," Foster said.

More from Personal Finance:
State-run auto-IRA programs continue to grow
Tax season opens Jan. 23, IRS says
Overconfidence in investing can be costly

Which generations spend the most on checking fees

Younger people are most susceptible to paying fees,'s survey found.

Gen Z, who range in age from 18 to 26, comes in at the top of the list, with 46% of that generation's checking account holders paying monthly fees. That cohort pays about $25 per month, found.

Millennials, who are ages 27 to 42, come in next, with 42% of account holders paying monthly checking fees, found. They typically pay the most compared with other generations, at $28 per month, the study found.

Older cohorts — Gen Xers, who are between 43 and 58, and baby boomers, ages 59 to 77 — are less likely to pay checking account fees. That includes just 22% of Gen X and 14% of baby boomer checking account holders, who pay $17 and $22 per month, respectively.

More than half of Gen Z — 56% — and millennial — 52% — account holders say they are sacrificing recession preparedness due to the monthly fees they pay. In comparison, 46% of Gen X and 35% of baby boomers said the same.

The monthly fees are setting consumers back on goals including paying down debt, saving for emergencies or for major goals such as buying a house or car or paying for college, or setting money aside for retirement, the survey found.

Biden announces plan to cut down on 'junk fees'
Biden announces plan to cut down on 'junk fees'

Gauge the true cost of your checking account

To know what you're truly paying for your checking account, you should keep tabs on your statements at least monthly, according to Bruce McClary, senior vice president at the National Foundation for Credit Counseling.

Start with the basics — looking at your transactions to make sure they're accurate, he said. Then evaluate your transactions and withdrawals and any account maintenance fees that come up.

If you feel that you're being charged in error, that should prompt a conversation with your bank, McClary said.

Keep in mind there may be adjustments your bank or credit union may be willing to make. If you let your financial institution know about your personal situation, they may be willing to forgive certain fees, particularly a first-time charge, Foster said.

"There's no guarantee it will work, but it just never hurts to reach out," Foster said.

'Shop around for opportunities'

Also evaluate whether there are fees you can avoid, such as by eliminating out-of-network ATM withdrawals or by maintaining a required minimum balance.

Where you can, try to find free savings and checking services, McClary said.

"Shop around for opportunities," McClary said. "If your bank or credit union isn't offering them, this could be an opportunity to move your business elsewhere where it might be more affordable."

Opening a new account at another institution may seem arduous, particularly if it requires an in-office visit and physically moving cash, Foster said. But the savings over time may more than make up for the hassle.

"While switching a bank can be a pretty annoying step, it can help you build wealth in the long run if it means not paying for a service that you can get for free elsewhere," Foster said.

And if you find you're not happy with your new account, you can always move your money somewhere else, she said.