How Much Does It Cost to Open a Bank Account?

Last Updated on January 7, 2025
Written by CPA Alec Pow | Content Reviewed by CFA Alexander Popinker

Opening a bank account can be an important step in managing your finances. But between initial deposits, monthly fees, and other charges, the costs involved should be carefully evaluated. This comprehensive guide breaks down the typical expenses associated with opening various types of bank accounts so you can make an informed decision.

How Much Does It Cost to Open a Bank Account?

At a minimum, opening a basic checking or savings account at a traditional brick-and-mortar bank will require an initial deposit ranging from $25 to $100. Ongoing monthly maintenance fees are common, averaging $10 to $15 per month unless waived by keeping a minimum balance or meeting other activity requirements.

Some banks also charge fees for using out-of-network ATMs, overdrawing your balance, making wire transfers, and other transactions that can quickly escalate costs.

Online banks and credit unions, on the other hand, are more likely to offer accounts with no minimum balance and limited or no monthly fees. But convenience and accessibility may be reduced compared to a traditional bank. Understanding both the upfront and ongoing costs is critical when selecting the right account.

According to Bank of America, there are no fees to open a checking or savings account, but monthly maintenance fees may apply. For example, their Basic Checking account has a monthly fee of $12, which can be waived by meeting certain requirements such as maintaining a minimum balance or having direct deposits.

Wells Fargo also offers various checking accounts with no initial deposit required to open an account. However, they do charge a monthly service fee, which is $10 for their Everyday Checking account. This fee can be waived if you meet specific criteria, such as maintaining a minimum daily balance of $500 or having qualifying direct deposits totaling at least $500 each month, as noted on their website.

According to U.S. Bank, opening a Bank Smartly® Savings account requires a minimum deposit of $25. This account does not have a monthly maintenance fee if you maintain a balance of at least $300. For their Elite Money Market account, the minimum deposit required is $100.

American Express offers an online checking account with no fees to open and no monthly maintenance fees. As stated on their website, there are also no minimum balance requirements, making it an attractive option for those looking to avoid fees altogether.

Real-Life Examples

To make cost calculations more concrete, here are two common scenarios with estimated expenses:

• Sam opens a Chase Total Checking account with a $100 opening deposit. The $12 monthly service fee is waived by setting up direct deposit. In the first year, Sam is charged $36 for three non-Chase ATM transactions.
• Madison opts for an online Discover Cashback Checking account with no opening deposit or monthly fees. However, in the first year she pays the account’s $10 overdraft fee twice, totaling $20.

While options like online banks can minimize fees, costs like overdraft charges can occur at any bank. Reviewing all account policies is necessary to avoid surprises.

You might also like our articles on the cost of filing for bankruptcy or cashing a check at Ace Check Cashing or HEB.

Breaking Down the Typical Cost to Open a Bank Account

The primary costs associated with opening a new bank account include:

• Minimum opening deposit – Most traditional banks require $25 to $100 to open an account. Online banks often have no minimum.
• Monthly maintenance fees – $10 to $15 per month is typical at brick-and-mortar banks unless waived. Online banks generally don’t have these.
• Overdraft fees – These average $30 to $35 when you overdraw your account, if not waived.
• Out-of-network ATM fees – Transaction fees can range from $2 to $5 for using another bank’s ATM. Some banks reimburse these fees.
• Foreign transaction fees – These are around 3% of the transaction amount when using your debit card internationally.

Account costs can escalate rapidly if you don’t understand the fee schedule or account policies. Be sure to investigate them thoroughly rather than making assumptions.

Factors Determining Bank Account Costs

Banks set account fees based on several influencing factors:

• Labor and Operational Costs – Maintaining branch networks and staff requires substantial overhead. Online banks have reduced expenses.
• Account Features – Premium accounts with extra benefits often have higher monthly fees if balances can’t waive them.
• Account Type – Savings and money market accounts tend to have higher opening minimums to earn interest.
• Bank Profit Strategies – Banks charge fees like overdrafts because they generate huge profits, not to cover costs.
• Consumer Demand – In competitive markets, banks may lower fees to attract customers. But where competition is minimal, they can push fees higher.
• Regulatory Limits – Governmental regulations cap the maximum amount banks can charge for certain fees to protect consumers.

Knowing what drives the costs can help you make informed account choices.

Online Banks Versus Traditional Bank Accounts

Online banks tend to offer lower account costs overall compared to traditional brick-and-mortar banks:

However, online banks offer limited physical access for tasks like cash deposits, whereas traditional banks have extensive branch and ATM networks. You’ll have to weigh the trade-offs closely for your own needs.

Opening a Bank Account With Minimal Fees

Here are some ways to reduce the cost of opening a new bank account:

• Opt for online banks or credit unions that offer no monthly fees and low or no minimum balances.
• Negotiate to waive monthly maintenance fees at traditional banks if you have an existing relationship.
• Avoid overdraft fees by linking accounts to overdraft protection or opting out of overdraft coverage.
• Seek banks that reimburse fees for using out-of-network ATMs.
• Be sure to meet any requirements for waiving monthly fees, like direct deposits or minimum balances.
• Compare multiple banks’ fee schedules before opening an account.

Expert Tips

Financial professionals provide the following advice on controlling bank account costs:

“Choose accounts with no monthly fees and low opening deposits. You want to start out with as little overhead as possible.” – Sarah Blair, Banking Advisor

“Maintain diligent records on balances and transactions so you never get surprised by a costly fee for overlooking details in the account terms.” – Liam Jensen, Financial Planner

“When evaluating accounts, look beyond fees to consider convenience factors like mobile banking tools that can simplify managing your finances.” – Priya Das, Banking Industry Analyst

Customer Feedback

According to consumer surveys, perceptions on bank account fees include:

• 67% feel their checking account fees are too high and should be reduced.
• 72% would consider switching banks if monthly fees increased by $3 or more.
• 84% believe online banks offer better overall value with lower fees than brick-and-mortar banks.
• 65% say monthly fees are only justified if there are substantial branch and ATM networks available.

Most consumers clearly expect reasonable fees and may change banks when accounts become too costly relative to their needs and preferences.

Bank Account Costs in the Future

In the near future, bank account costs may change in the following ways:

• Continued growth of online banks will spur further elimination of monthly maintenance fees to remain competitive.
• Ongoing margin pressure will likely compel more banks to implement fees for services that used to be free.
• Technological infrastructure upgrades at established banks will necessitate selectively higher fees in the short term.
• Increased regulatory scrutiny could crack down on overdraft and other fees perceived as predatory or abusive towards lower-income account holders.

While monthly maintenance fees may decline over time, banks will adapt with new revenue sources. Carefully reading the fine print will remain essential.

Consumer Banking Trends

For most individuals, bank account costs significantly influence behavior:

• Survey data shows 65% of consumers selected a bank in the last year based primarily on lower expected fees.
• Millennials are 67% more likely than other demographics to use online banks to avoid fees.
• Low-income consumers disproportionately shun banks altogether due to high minimums and fees, relying instead on check cashing services.

Managing costs remains a priority for consumers across income levels when selecting banking services.

Final Words

Opening a new bank account involves upfront deposits as low as $0, but watch for ongoing monthly maintenance fees between $10 to $15 on average. Numerous other transactional fees like ATM charges can multiply expenses. Comparing all fees across multiple providers is wise before committing, with online banks offering more flexibility. But accessibility and convenience should be balanced with ideal cost savings for your personal needs.

Answers to Common Questions

What are the typical fees charged by banks on checking accounts?

The most common fees banks charge on checking accounts include:

• Monthly maintenance fees ($10 to $15 per month)
• Overdraft fees ($30 to $35 per transaction)
• Out-of-network ATM fees ($2 to $5 per transaction)
• Foreign transaction fees (around 3% of the transaction amount)
• Account closing fees ($25 to $35 if closed within 180 days)
• Wire transfer fees ($10 to $30 per transfer domestically)
• Returned deposit item fees ($10 to $15 per returned check or ACH deposit)

Monthly maintenance and overdraft fees make up the bulk of checking account charges. But incidental transactional fees can add up.

How do online bank account fees compare to traditional brick-and-mortar banks?

Online banks tend to offer much lower account fees overall compared to traditional banks:

• Online banks commonly have no monthly maintenance fees, while brick-and-mortar banks charge $10 to $15 without waivers.
• Overdraft fees are less common or non-existent with online banks versus $30 to $35 fees per overdraft at traditional banks.
• Online banks often reimburse out-of-network ATM fees, but brick-and-mortar banks charge $2 to $5 for using a non-network ATM.
• Online banks have lower or no minimum opening deposits, while brick-and-mortar banks require $25 to $100.

However, online banks offer limited physical access. You’ll have to weigh reduced fees against in-person convenience when choosing between online and traditional banks.