Minimum Daily Balance: What You Need to Know About Fees and Waivers

Maintaining a minimum daily balance can save you money on fees. If your account balance falls below the minimum, you may be charged a fee.

Banks and credit unions often charge these fees to offset the costs of maintaining your account. The fee can be a flat rate or a percentage of the low balance.

To avoid fees, it's essential to keep track of your account balance daily. You can do this by regularly checking your account online or through a mobile banking app.

Fees can add up quickly, so it's crucial to understand the minimum daily balance requirements for your account.

Minimum balance requirements can be confusing, but understanding the basics can help you avoid unexpected fees.

There are three main ways banks require a minimum balance: minimum daily balance, average minimum balance, and minimum combined balance.

A minimum daily balance is the minimum amount of money you have to have in your account at the end of each day. If you ever have less than this amount, you'll have to pay the monthly fee.

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Even if your balance falls below the requirement for one day, there's no way to recover. This can happen easily if you have automatic payments set up.

The upside of minimum daily balances is that they're very easy to understand: never fall below the balance, and you won't pay a fee.

You can avoid the fee by making a deposit on the same day, as long as the deposit posts before the day ends.

The average minimum balance is the combined end-of-day balances divided by the amount of days in the statement cycle. This allows you to drop below the advertised minimum for a short time while still avoiding the monthly fee.

If the resulting number is greater than the minimum balance requirement, you won't pay a fee. This is easier to meet than a minimum daily balance requirement.

You can recover from letting your balance fall below the minimum for a day or two by depositing some extra cash to make your average balance meet the minimum.

Minimum combined balances consider more than just the balance you keep in the bank account with the requirement. They may also count the balances of every account that you have at the financial institution.

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If you do all your banking in one place, combined minimum balances are a great deal. The balances of your other accounts can help you keep the new account fee-free.

Here are the three main ways banks require a minimum balance:

It's also worth noting that some banks offer alternative ways to avoid monthly fees, such as signing up for direct deposit or making a certain number of debit card transactions.

Checking account fees can be a real headache, especially if you're not aware of what triggers them. A monthly maintenance fee might be charged if your balance falls below requirements.

Some banks waive these fees if you have a recurring direct deposit, but be aware that missing or delaying a deposit can lead to fees. For example, Bank of America's Advantage SafeBalance Banking Account has a $4.50 monthly service fee that can be waived by signing up for the Preferred Rewards program or maintaining a minimum daily balance of $500.

PNC Bank's Virtual Wallet has a monthly service fee of $7, $15, or $25, which can be avoided by having a $500 monthly direct deposit or a $500 monthly balance in Spend and Reserve accounts.

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If you're looking for a checking account with no monthly fee, you might be able to get it waived another way. Many banks offer alternatives, such as signing up for direct deposit, using online bill pay, or making a certain number of debit card transactions.

These alternatives often require proactive action, like making bill payments from the account rather than through another method. Minimum balance requirements are more passive, but they can be a hassle to meet.

Some banks offer senior checking accounts that are a great resource for those who qualify, typically those age 60 or older. These accounts usually require a minimal balance to have the monthly fee waived.

If you're not eligible for a senior account, you can look for online banks that have low or no minimum balance requirements and don't charge monthly fees. They often offer great interest rates and other benefits.

Here are some common ways to trigger a monthly maintenance fee:

Maintenance fees can be a sneaky surprise in your checking account. A monthly maintenance fee might be charged if your balance falls below requirements.

Some banks will waive this fee if you have a recurring direct deposit, but if the deposit is missed or delayed, expect the fee to kick in.

Using non-bank ATMs can also trigger a fee, so it's essential to check your bank's policies before traveling abroad. Foreign transaction and ATM fees can add up quickly.

Writing too many checks in a month or making excessive withdrawals can sometimes trigger a fee, so it's worth reviewing your bank's policies on these activities. Paper statements, money orders, official bank checks, transfers, and wires can also incur additional fees.

Chase Bank charges a $12 monthly service fee for their Chase Total Checking account, but you can waive it by keeping a minimum $1,500 daily balance or having monthly electronic deposits totaling $500 or more.

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Bank of America's Advantage SafeBalance Banking Account has a $4.50 monthly service fee, but you can waive it by signing up for their Preferred Rewards program or maintaining a minimum daily balance of $500.

U.S. Bank's Smartly Checking account has a $6.95 monthly service fee, but you can waive it by setting up $1,000 in direct deposits per month or maintaining a $1,500 average balance.

PNC Bank's Virtual Wallet has a monthly service fee ranging from $7 to $25, depending on the account type, but you can avoid it by having a $500 monthly direct deposit to a Spend or Reserve account or being age 62 and older.

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Bank of America has a monthly service fee of $4.50 for their Advantage SafeBalance Banking Account.

You can avoid this fee by signing up for the Preferred Rewards program.

Maintaining a minimum daily balance of $500 is another way to waive the fee.

Being a student under age 24 also gets you out of paying this fee.

A minimum daily balance is the minimum amount of money you have to have in your account at the end of each day.

If you ever have less than this amount in your account, you'll have failed to meet the requirement and will have to pay the monthly fee.

You can avoid the fee by making a deposit on the same day, as long as the deposit posts before the day ends.

The average minimum balance is the combined end-of-day balances divided by the amount of days in the statement cycle.

This method allows you to drop below the advertised minimum for a short time while still avoiding the monthly fee.

You'll be safe if you never let a day end with less than the minimum balance requirement.

The average minimum balance is a more flexible way to avoid monthly fees. It's calculated by adding together your ending balances from each day and dividing that number by the number of days in the statement cycle.

This method is easier to meet than a minimum daily balance requirement because it allows for a short-term drop below the advertised minimum. As long as your average balance is greater than the minimum balance requirement, you won't pay a fee.

If you find yourself below the minimum balance for a day or two, you can recover by depositing extra cash to make your average balance meet the minimum.

The average minimum balance is calculated at the end of the statement cycle, so it's essential to keep track of your daily balances to ensure you're meeting the requirement.

To avoid fees, focus on maintaining an average balance that meets the minimum requirement, rather than worrying about daily balances.

The minimum combined balance requirement considers more than just the balance you keep in the bank account with the requirement. It may also count the balances of every account that you have at the financial institution.

This method is a great deal if you do all of your banking in one place. The balances of your other accounts can help you keep the new account fee-free.

Combined minimum balances can either be daily or average balance requirements, so pay attention to how your bank tracks things. This means you'll need to keep an eye on your overall balance across all accounts, not just the specific account with the requirement.

To meet the requirement, simply combine the balances of all your accounts at the financial institution. For example, if you have a checking account with $1,000, a savings account with $1,500, and $2,600 in a money market account, you'll have a total of $5,100. This will meet the requirement for any account whose minimum combined balance requirement is less than $5,100.

Here's a breakdown of how the minimum combined balance requirement works:

If you're looking for a checking account with no minimum balance requirements, consider Ally Bank's Online Checking, which has no monthly maintenance fees or minimum balance requirements.

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Some checking accounts charge maintenance fees if your daily balance falls below a certain threshold, such as Bank of America's Advantage Plus Checking, which has a $25 monthly maintenance fee if your daily balance is less than $1,500.

Chase Bank's Total Checking account has a $12 monthly maintenance fee if your daily balance is less than $1,500, but waives the fee if you have direct deposit, a linked Chase first-time homebuyer, or a linked Chase first-time homebuyer savings account.

Many checking accounts offer rewards for maintaining a minimum daily balance, such as the Bank of America Advantage Plus Checking, which offers a higher interest rate on balances up to $25,000 if you maintain a daily balance of at least $1,500.

The Ally Bank Online Checking account is a great option if you're not comfortable keeping a large balance in your checking account, since it has no minimum balance requirements.

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