A monthly maintenance fee is small enough to ignore and persistent enough to matter. Over the holding period a bonus requires, it can take back a noticeable share of what you earned.
How the fee and the bonus interact
Most fee-bearing accounts waive the fee if you meet a condition — a minimum balance, a monthly direct deposit, or a number of card transactions. Frequently that is the same condition the bonus depends on, which is convenient while you are qualifying and dangerous afterwards. When the bonus period ends and you stop the direct deposits, the waiver stops with it.
The fees worth checking before you open
- Monthly maintenance fee and the exact waiver condition.
- Overdraft and NSF fees. A single overdraft can cost more than a month of maintenance, and an account being used for an unfamiliar direct deposit is exactly where mistimed debits happen.
- Out-of-network ATM fees, charged by both your bank and the machine owner.
- Paper statement fees, which some banks apply unless you opt into electronic statements — an easy one to miss when opening an account quickly.
- Early account closure fee, if you close within a few months.
- Excess transaction fees on savings and money market accounts.
Work out the net before applying
Take the bonus, subtract the maintenance fee multiplied by the number of months you must keep the account open, subtract any closure fee, then apply tax at your marginal rate. What remains is the real figure. A large bonus on a fee-heavy account can end up behind a smaller bonus on a free one.
The overdraft trap during the qualifying period
Two things make overdrafts more likely on a bonus account: you are running an unfamiliar payment schedule, and you may be keeping the balance close to a minimum to leave the rest of your cash earning a better rate elsewhere. A pending debit and a daily balance test are a bad combination.
Keep a buffer above the minimum, and switch off overdraft coverage for debit card transactions if you do not want them authorised into a negative balance.
Prefer accounts with no fee at all
Plenty of banks and most credit unions offer checking with no monthly maintenance fee and no minimum balance. When two offers are close in value, the fee-free one wins on the arithmetic and removes an entire category of things that can go wrong.
Offers without monthly fees are flagged in our roundup, and best checking bonuses lists the waiver conditions.