Monthly maintenance fee

What It Means

A monthly maintenance fee is a charge a bank or credit unionCredit unionA not-for-profit financial cooperative owned by its members, offering accounts and loans to people within the field of membership its charter sets. See more takes out of an account each month for keeping it open. It can apply to checkingChecking accountA bank or credit union account for everyday money going in and out, used by debit card, checks, transfers and direct deposit. See more, savings and money market accountsMoney market accountA bank or credit union deposit similar to savings that may pay a higher, tiered rate for bigger balances and often allows checks or a debit card. See more, and the CFPB says the institution has to show it to you when you open the account. Many accounts drop the fee in any month you meet a condition, such as keeping a set balance or having your pay deposited directly.

How It Sounds at Home

• "They charged me a twelve-dollar service fee again."
• "As long as my paycheck goes in there, the fee goes away."
• "Why am I paying the bank to hold my money?"

The Breakdown

Worked example. Sam's checking account charges a $12 monthly maintenance fee, an example amount, and waives it in any month his pay arrives by direct depositDirect depositA payment, such as a paycheck or government benefit, sent electronically straight into your bank or credit union account instead of as a paper check. See more. His main job pays by direct deposit for only four months of the year; the rest of the time he's paid by paper check from seasonal work.

At that pace, five years of fees comes to $480.

What the result means. One month's fee looks small, and the waiver decides most of the cost. Every month you miss the condition costs the full fee, so the calculator counts months rather than dollars first. If the missed months keep adding up, look at another waiver the account offers, move your direct deposit, or ask about a different account.

Common ways banks waive it

• Direct deposit of your pay or benefitsBenefits packageEverything an employer offers on top of wages, such as health insurance, paid leave and a retirement plan, which can be worth thousands of dollars a year. See more
• A minimum balanceMinimum balanceThe amount a bank requires you to keep in an account to open it, avoid a monthly fee or earn the stated interest rate, as set out in its disclosure. See more, measured the way your account disclosure says
• A set number of transactions in the month
• Sometimes, paperless statements or several products held at the same bank, which the FDIC says may remove some fees

Good to Know

According to the CFPB's Ask CFPB page on monthly maintenance fees, banks and credit unions may charge one on savings, checking and money market accounts and must show it to you when you open the account. In its December 2021 Consumer News on overdraftOverdraftWhen a payment is bigger than your checking balance and the bank pays it anyway, leaving a negative balance you owe back, usually plus a fee. See more and account fees, the FDIC lists direct deposit, a minimum balance and a set number of transactions as common ways the fee is lowered or waived. The FDIC and HelpWithMyBank.gov, run by the OCC, both suggest asking your bank for the account opening disclosure and fee schedule, which list the deposit fees it can charge. If no waiver fits your life, the FDIC's help center notes that many insured banks offer accounts with low or no monthly fees.

Related Terms and Categories

• Minimum balance

  The amount a bank requires you to keep in an account to open it, avoid a monthly fee or earn the stated interest rate, as set out in its disclosure.

• Direct deposit

  A payment, such as a paycheck or government benefit, sent electronically straight into your bank or credit union account instead of as a paper check.

• Checking account

  A bank or credit union account for everyday money going in and out, used by debit card, checks, transfers and direct deposit.

• ATM fee

  A charge for using an ATM, which can come from the machine's owner, from your own bank for using a machine outside its network, or from both.

• Overdraft fee

  The flat charge a bank adds each time it pays a transaction your checking account couldn't cover, on top of the negative balance you repay.

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