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How can I reduce the costs of my checking account?

You can reduce the cost of using your checking account by taking the following steps:

Pay attention to what transactions or events are triggering fees

Find out whether you might be able to alter your banking behavior to avoid these fees. For example, you may save a few dollars by using your bank’s or credit union’s ATMs rather than those of another institution or by signing up for account alerts that help you stop from spending more than you have. Talk to your bank or credit union about possible solutions.

Avoid spending more than you have

Bounced check penalties can be significant, and overdraft fees are an especially costly way to borrow money. Keep careful track of the balance in your account and confirm that deposited funds are available before making a payment or withdrawal that might exhaust your account. Check your balance at the ATM before you withdraw cash, and see if you can sign up to get low-balance warnings via e-mail or text. You can also monitor your balance online.

Keep track of your account

Monitor your account online to keep track of what’s coming in and going out. If you have questions, ask your bank or credit union for an explanation. Review your account statement every month to make sure it’s correct. Report any errors immediately to your bank or credit union. Banks and credit unions must tell you when they change their terms of service, so any time you get a piece of mail from your bank or credit union, read it.

Reduce monthly service charges

Know the minimum balance requirement. Ask if direct deposit or electronic banking can lower the monthly fee. See if the bank or credit union offers a low-fee checking account for you, such as a seniors or students account, or just a basic checking account with a low minimum balance and a limited number of “free” checks and withdrawals. You may also be able to avoid monthly maintenance fees by consolidating accounts and maintaining a higher balance.

Shop around

Get a copy of your bank or credit union’s list of account fees, or ask about them, then compare them with account fees at other banks or credit unions. Assess your habits honestly and consider penalty fees, such as overdraft and non-sufficient funds charges, as well as monthly maintenance, ATM surcharge, and other service fees. When comparing banks or credit unions, also consider factors such as the hours of operation, locations, access to public transportation, available products and services, and reputation for customer service.