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A minimum balance on a checking account is the lowest balance you can carry without incurring a monthly maintenance fee or facing other penalties, such as losing out on interest earnings for the month. Minimum balance requirements vary with each financial institution and account. Here are a few different types of minimum balance requirements:

  • Minimum opening deposit: this is the amount of money you'll need to put into a bank account to activate it.
  • Minimum daily balance: your bank or credit union may require you to keep a certain amount of money in your account each day to avoid fees or earn interest.
  • Average minimum balance: your bank calculates the amount of money in your account at the end of each day and divides it by the number of days during the statement period. If your average balance exceeds the balance requirement, then you typically avoid fees.
  • Minimum combined balance: in this case, your bank will calculate the amount of money you keep across several accounts in that institution.

However, not all accounts have minimum balance requirements. Some financial institutions won't set minimum balance requirements on any of their accounts. Others may charge a monthly maintenance fee on some or all accounts, but they'll offer several ways to get the fee waived. Maintaining a daily or monthly account balance is often one way to do so.

Generally, many savings and checking accounts do not require a minimum deposit at all. National banks with a branch presence often charge monthly maintenance fees and offer ways to skip them. Credit unions and online institutions often won't charge fees or set balance requirements.

Here are common ways to avoid minimum balance requirements:

  • Learn your bank's or credit union's minimum balance requirements.
  • Research accounts that do not have minimum balance requirements.
  • Set up direct deposit.
  • Open an additional account with the same bank or credit union.
  • Monitor your balance.

If you are researching new checking accounts and you are not sure whether you can follow minimum balance requirements, consider opening an account that doesn't have them.

tags : Checking Account Fees Money Management

Disclaimer: This editorial content is not provided or commissioned by the banks or credit card issuer(s). Opinions expressed here are the author's alone, not those of the banks or credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the banks or credit card issuer(s). Reasonable efforts are made to present accurate info, however all info is presented without warranty. Consult with the issuing bank of the card or account for terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are accurate as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.