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Ask the expert: How much should you pay for your checking account?

March 08, 2011

By Richard Barrington | MoneyRates.com Senior Financial Analyst, CFA

Q: What is a reasonable maintenance fee for a checking account? Some banks don't charge any maintenance fees, while others charge a fee if the balance goes below a certain amount. What is a reasonable arrangement?

A: While there are a few different types of fees a checking account might charge, monthly maintenance fees are often the most important factor in choosing a checking account, because those are fees you'll be paying month-in and month-out, regardless of how you use the account.

There are two ways you can look at the question of what constitutes a reasonable monthly maintenance fee: You can compare the monthly fee to the industry average, or you can compare it to the best deals available.

According to a recent MoneyRates.com checking account fee survey, the average monthly maintenance fee among banks that charged such fees was $9.76 per month. This would come to $117.12 per year--no small amount if you keep a relatively small checking account balance. If you keep a larger balance, you might be able to avoid the maintenance fee altogether. Many banks set a threshold balance at which you will avoid monthly maintenance fees, and the average of these balances is $3,523.57.

Of course, the best deal available is still free checking. Even though the number of free checking accounts has declined, there are still several banks that charge no monthly maintenance fees. You should look for these deals especially if you can't afford to keep a large balance in your checking account. You might have the best luck if you are over 50 years old or a student. There are a few banks that offer special, free checking accounts to one or both of those target markets.

A poll conducted by MoneyRates.com and GetRichSlowly.org found that 95 percent of our users were still able to find free checking one way or another, so it's well worth the search.

Got a financial question about saving, investing, or banking? MoneyRates.com invites you to submit your questions to our "Ask the Expert" feature. Just go to the MoneyRates.com home page and look for the "Ask the Expert" box on the lower left.

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