Finding ways to prepare for a recession or weather high inflation can be even simpler than cutting back on spending and increasing your income. Sometimes, it first comes down to finding the right place to bank.

More than 1 in 4 Americans with a checking account (or 27 percent) are paying monthly fees, costs that include routine service charges to ATM and overdraft fees, according to a new Bankrate survey. That’s despite many banks on the market not charging for those services.

Those costs can add up. On average, fee-paying checking account holders chalk up $24 a month, or $288 per year, the poll found. And as the chances of a downturn grow and hiring looks likely to slow in the unfolding year, nearly half (or 48 percent) say those checking account fees are preventing them from preparing for a recession — limiting how much they can save for emergencies and pay down debt.

Avoiding unnecessary fees is part of the recipe for financial success. Over the coming two decades, assuming the annual rate and level of savings doesn’t change — which it will — one would have another $5,760 to work with.

— Mark HamrickBankrate senior economic analyst
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Key takeaways:
  • More than 1 in 4 Americans with a checking account (or 27 percent) are paying fees that cost an average of $24 per month, or $288 per year.
  • Americans would pay down debt (30 percent), add to their emergency fund (29 percent), fund discretionary purchases (27 percent) or save for a major financial goal (26 percent) if they didn’t have to pay monthly checking fees.
  • Nearly 1 in 3 (or 31 percent) of checking account holders who pay monthly fees say the reason they’ve remained with their financial institution is unrelated to the products or services it provides.
  • Almost two-fifths of Americans with a checking account (37 percent) say low or no monthly fees are the most important feature in a bank.

Monthly fees are holding Americans back on recession preparations, financial milestones

The majority of Americans with a checking account (or 73 percent) are taking advantage of no-fee banks and paying nothing in monthly fees. But those costs are causing the 27 percent who do — reflecting 57 million adults — to sideline major financial milestones and forgo prudent steps with their money.

Adults who pay fees on their checking account say those costs are keeping them from:

  • Paying down debt (30 percent);
  • Adding to their emergency savings (29 percent);
  • Funding discretionary purchases: (27 percent);
  • Saving for a major financial goal (26 percent); and
  • Adding to their retirement savings (17 percent).

Slightly more than one-fifth (or 21 percent) of Americans said they don’t know what they’d do with their money instead.


Findings from Bankrate’s Checking Account and ATM Fee Study:

  • The average overdraft fee is $29.80, a 13-year low.
  • The average non-sufficient funds (NSF) fee is $26.58, an 18-year low.
  • For interest checking accounts, the average monthly fee is $16.19, while the average balance requirement to avoid a fee is $9,658.
  • The average total cost of an out-of-network ATM withdrawal is $4.66, a three-year high.

Checking account fees hit younger generations, upper-income households

Checking account fees are especially pinching younger generations. More than 2 in 5 Generation Zers and millennials (or 46 percent for those between the ages of 18-26 and 42 percent for ages 27-42) pay those monthly banking costs, compared with 22 percent of Gen X (ages 43-58) and 14 percent of baby boomers (ages 59-77). Their older counterparts also tend to pay less on average each month, at $17 for Gen X and $22 for baby boomers versus $25 for Gen Z and $28 for millennials.

Checking fees are also inhibiting younger generations’ wealth-building opportunities — meaning paying for them could cost even more in the long run.

Gen Z and millennials would most likely put the money they spend on checking account fees toward funding a major financial goal, such as buying a house or saving for college. After that, they were more likely than their older counterparts (Gen X and baby boomers) to say they’d add to their emergency fund, save more for retirement or pay down debt.

Gen X and baby boomers, at 30 percent and 27 percent, respectively, would most likely fund discretionary, non-essential spending if they didn’t have to pay checking account fees.

Being unable to save for emergencies or pay down debt is harming younger generations’ ability to ready their finances for a possible downturn. More than half of Gen Z (56 percent) and millennials (52 percent) who pay monthly fees for their checking account are sacrificing their recession preparedness, compared to 46 percent of Gen X and 35 percent of baby boomers.

Men are slightly more likely than women to pay fees on a checking account, at 31 percent versus 23 percent. Yet, men and women who pay fees spend the same amount of money each month ($24).

Individuals earning $100,000 or more who pay bank fees spend the most each month ($31 on average), while those earning between $80,000 and $99,999 pay an average of $29. That compares with $20 for Americans making between $50,000 and $79,999, along with $24 for those who make less than $50,000.

Why are Americans sticking with a fee-charging checking account? 31% say it’s unrelated to its products or services

Nearly half (or 46 percent) of non-interest checking accounts are free, but 99 percent become free when certain requirements are met, such as maintaining a set minimum balance or having your paycheck directly deposited, according to a separate Bankrate checking fee study from August.


Bankrate analyzed thousands of data points to name 90 winners in its 2023 best in finance awards, including banks, credit cards, loans and more. In assessing the best banks, Bankrate considered banks and credit unions in every category — online, big banks, regional and credit unions — and factors including fees charged, if any, across account types.

Despite the options on the market, nearly 1 in 3 (or 31 percent) of checking account holders who pay monthly fees say the reason they’ve remained with their financial institution is unrelated to the products or services it provides. That includes 16 percent who say it is the account they’ve always had, 11 percent who say it would be too much of a hassle to switch banks and 4 percent who say they don’t have time to shop around or research other options. Meanwhile, 8 percent say the reason why they’re sticking with their fee-charging bank is because they pay low monthly fees.

Americans who pay monthly checking fees for their account also cite remaining with their bank because:

  • They are happy with the customer service (18 percent);
  • They have convenient branch or ATM locations (14 percent);
  • Their reputation (8 percent);
  • Their online or mobile tools (9 percent);
  • They have good interest rates (6 percent); and
  • Other (3 percent).

The depositor-bank relationship is known to be long-lasting. The average checking account holder has been with their bank or credit union for 17 years, according to Bankrate’s poll.

Here’s what consumers say is most important to them in a checking account

Depositors know what’s most important to them when considering where to bank: Overwhelmingly, it’s banking somewhere with no or low monthly fees, at 37 percent, Bankrate found.

Other factors include convenient branches or ATM locations (15 percent), good customer service (14 percent), user-friendly internet or mobile apps for banking (12 percent), strong reputation (10 percent) and competitive interest rates (5 percent).

Even those who are paying fees say no or low monthly fees are an important factor (at 19 percent), second only to convenient branches or ATM locations (20 percent).

Other important features for individuals paying fees for their checking account include good customer service (18 percent), user-friendly internet banking/mobile app (14 percent), strong reputation (12 percent) and competitive interest rates (8 percent).

“In a perfect world, we’d all be born with knowhow or have parents or other mentors who’d help us to be wise and effective financial stewards on the first day we have funds with which to work,” Hamrick says. “For some, it may require knowledge born of experience or exposure to new information, including that no or low-fee accounts are readily available, particularly in this age of online, including mobile access, banking.”

Methodology commissioned YouGov Plc to conduct the survey. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 3,657 U.S. adults, of which 3,069 have a checking account. Fieldwork was undertaken on Dec. 7-12, 2022. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.