Free checking accounts. Are they really free?

• 10/3/2018

Q: Everyone seems to be offering “free checking” these days. How do I know who has the real deal? What questions should I be asking as I comparison shop and what should I be looking for?

A: The federal Truth in Savings Act (TISA) stipulates that an account may not be advertised as “free” if it has a minimum balance requirement or any maintenance or activity fees. However, realize that free doesn’t mean there can’t be fees. Non-sufficient funds, stop payment, check printing, dormancy and early account closure induce fees that can still be charged in conjunction with a free checking account.

The trade-offs with “free” accounts typically require another activity – such as signing up for electronic statements or direct deposit. Besides, few pay dividends. You might want to look for an account that offers courtesy pay or overdraft privileges as a service. The bottom line: Before applying for a free checking account, or any account for that matter, make sure you obtain a copy of the institution’s fee schedule. Review it closely to make sure your checking behaviors won’t produce fees on your “free” checking account.

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