If you think free checking accounts are becoming a thing of the past, you’re not totally wrong. A number of large banks have either given them up altogether or started charging a fee if your account balance doesn’t exceed a minimum level. However, some banks still offer free checking, but often there are requirements that account owners must meet to avoid a monthly maintenance fee. In some cases, banks offer checking accounts for those who have a low income as long as the account holder signs up for direct deposit and meets the minimum monthly deposit amount. Although consumers usually opt for checking accounts from traditional banks, accounts from online banks and credit unions can also be a good option for some. However, it's important to read the fine print since each bank's requirements are different and should be considered before opening an account.

Checking Accounts from the Big Banks

There are a few big banks that have free checking, but with caveats. Below are the checking account options from two of the nation's biggest banks.

Wells Fargo

Wells Fargo lets you avoid the $10 monthly charge for its Everyday Checking account if you do one of the following:

• Maintain a minimum daily balance of $500
• Receive direct deposits totaling $500 per month
• The primary account owner is 17 through 24 years old, but once the primary account owner turns 25 years old, the account automatically is subject to the monthly fee unless one of the other two criteria are met

ATM withdrawals and transactions are free at Wells Fargo ATMs, but there's a $2.50 charge for ATMs outside the bank's network plus any fees charged by the ATM provider. The minimum initial deposit must be $25 at the time of opening the account.

Bank of America

Bank of America's Advantage Plus Banking checking account charges a $12 monthly fee. However, the account is free if the account owner does one of the following:

• Has direct deposits totaling at least $250 a month into the account
• Maintains a daily balance of at least $1,500
• Students under the age of 24 might be eligible for a monthly fee waiver while enrolled in high school, a vocational program, college, or university.

Bank of America ATMs have no ATM fees, but you'll be charged $2.50 per transaction at non-Bank of America ATMs plus any charges by the ATM provider.

Both Wells Fargo and Bank of America can be good choices for low-income earners since the direct deposit minimums are not overly burdensome. In other words, as long as you deposit $6,000 per year (or $500 per month in direct deposits), you meet the criteria for Wells Fargo, while $3,000 per year or ($250 per month in direct deposits) gets you a free checking account at Bank of America.

Beyond the Big Banks

While completely free accounts are harder to come by at larger banks, some make it easier than others to steer clear of their service fee.

Online Banks

Online banks like Ally and Discover may be an even better option since they forgo monthly fees altogether and no minimum amounts needed to open an account.

Online banks also tend to offer higher interest rates than their brick-and-mortar competitors. Discover is particularly generous in this regard, with several 5% “cash back bonus” programs.

Since more customers are using online and mobile apps to do their banking, the lack of physical branches is less of an issue than it used to be. And if you need cash, finding an ATM usually isn’t much of a problem. Discover offers some 60,000 no-fee teller machines around the United States. 

Meanwhile, Ally lets customers use any Allpoint ATM for free and reimburses customers up to $10 a month on any fees they generate from a machine outside their network.

Another compelling option is the GoBank account being offered at Walmart. The product, which combines mobile banking capabilities with the ability to deposit cash at its retail locations. GoBank does charge an $8.95 monthly membership fee, although that can be avoided if your account receives direct deposits worth at least $500 a month.

GoBank doesn't charge for ATM withdrawals at their in-network ATMs, but the bank charges $3.00 per transaction when you use an out-of-network ATM plus any charges by the ATM provider.

Credit Unions

If an online-only account still makes you nervous, you might want to consider community banks and credit unions, which are more likely than big banks to offer free checking. In a recent survey, Bankrate found that 82% of credit unions marketed these accounts, while only 38% of banks did.

These days, joining a credit union is easier than you might think. While there are still plenty of company-sponsored credit unions that only serve their own employees, others simply require that you live within a certain geographic boundary. And even if you don’t meet eligibility requirements on your own, you can often participate if a close relative is a member.

How to Avoid Overdraft Fees

Even if you are not charged a monthly service fee on your checking account, you could end up paying through the nose with various other charges. But there are ways to make sure your “free” account remains free.

Overdraft fees are among the biggest culprits. According to Bankrate, the average overdraft fee is $33.38 per transaction at banks and $28.20 at credit unions. Also, if you consider that some accounts can charge multiple fees per day, they can add up quickly. As a result, it's important to understand how overdraft fees work and how to avoid them.

Online vs. Traditional Banks

When you’re shopping for an account, be sure to check the fee schedule. Online banks tend to win out in this regard, too. While Ally charges a $25 fee to cover purchases when your account balance goes negative, they limit them to one per day. That ensures you won’t get dinged for a quick succession of purchases when your funds have run dry. Conversely, both Wells Fargo and Bank of America typically charge a $35 per-item overdraft fee.

Overdraft Protection

Overdraft protection can come in the form of a savings account that's linked to your checking account so that if an overdraft occurs, the bank will automatically transfer money from the savings to cover the shortfall in the checking account. Some banks also offer a credit line that can be linked to a checking account, which allows you to borrow funds to cover the overdraft. However, there can be an annual fee and interest charges for using the credit line. There are pros and cons to overdraft protection since the account owner would have to fill out a credit application and get approved for the credit line.

Paid Overdrafts

If you don't have a savings account or credit line, some banks will pay the check or item even though the account has been overdrawn, but there is usually a fee for each overdraft item when there are insufficient funds. However, for smaller transactions that cause an overdraft, a fee may not be charged. For example, Wells Fargo does not charge an overdraft fee if the overdraft is $5 or less.

One option for avoiding overdraft fees—besides regularly monitoring your balance so that you have enough funds—is to ask the bank to turn off the paid overdraft feature. In other words, retailers, for example, will decline your debit card purchase when you don’t have enough funds—but you may avoid overdraft fees. However, it's important to check the details with each bank since they may still charge an insufficient funds fee or a returned-item fee, which is when they return a check to the maker.

The Bottom Line

Online checking accounts may not offer the personal touch that you can find at a traditional bank, but it’s hard to argue with their low-cost approach. For those who like to see a banker in person from time to time, you’re more likely to find free offerings at community banks and credit unions than at the big-name banks. Either way, there are low-to-no-cost options that will likely make a checking account affordable.