Banks with Free Checking

Before the days of Internet banking (or online banking, as others prefer to call it) there was no hype whatsoever about banks with free checking accounts. Banking institutions merely listed checking accounts as one of the items in their menu of services. A typical bank advertisement then would have this plain format: “XYZ Bank. Services offered: Savings Account, Checking Account (or Demand Deposit Account), Certificate of Deposit, Loans.”

Neither could you expect the idea of “banks with free checking accounts” to cross the mind of any individual at that time. It was simply unthinkable. Here’s why. In the beginning checking accounts were meant only for those who are qualified to receive the service. So it is absurd to think of a bank to attract massive checking account clientele by shouting “Free checking accounts”.

But with competition growing year after year, traditional banks were forced to come up with innovative ideas in order to stay ahead. Rules about opening checking accounts were loosened a little bit to make them more attractive to prospective depositors. But still it did not create an industry where one or more banks with free checking accounts exist. Checking account depositors still paid standard fees related to the account regardless of what bank they chose.

Traditional bank fees that were tied to checking accounts usually had to do with: check book issuance; falling below a required minimum balance; return (“bounce”) of check for reasons like “drawn against deposit not yet cleared”, “insufficient funds”, “postdated”, “outdated”, “signature varies”, “alterations”, “payment stopped”. There were also traditional bank fees for stop payment request, transfer of balance from one account to another, and for account dormancy.

The banking landscape drastically changed when Internet technology, particularly “Web 2.0”, made it feasible for banks to transact business online and the degree of competition intensified. To the amazement of millions of Web citizens, banks with free checking accounts emerged here and there. Well, at least that was the impression created by banks that proudly proclaimed in their home pages that they had free checking accounts in their package of services.

All Internet marketers, including online banks, know the power of the word “Free” to attract Web surfers’ attention.

Banks with free checking accounts include players like (to name a few, and this is not an endorsement): US Bank, First National Bank-Omaha, Huntington, Citizens Bank, Principal Bank, Wachovia. There are variations in how they present their “free” checking account, but almost all of them mention the following features: no minimum balance, no monthly checking fee, free bill pay, free online statements, free online banking (meaning you can view your account information online).

What these banks clearly have in common are:

·       Profit motivation.

·       Minimum-deposit requirement; $100 is often mentioned, but there are banks that quote a lower amount.

·       Fees that take effect the moment a checking account is active (for example: fees for bounced check, overdraft protection, and printed bank statements).

There are several banks with free checking accounts will suit just about any persons needs.