Some banks charge a fee for not maintaining a balance of more than a certain amount. Even a free online checking account no opening deposit required may have a minimum balance requirement for 30 to 90 days after opening the account. To avoid the minimum balance fee, you will need to have at least that amount in your account at all times. The cash cushion can also help you avoid overdraft and NSF fees.
Having a certain amount in your account at all times can help you earn more money too. Savings accounts provide interest payments on the money you have in the account. Many banks offer higher interest rates when you have high balances.
Depending on the bank, a savings account can help you earn 0.1 to 1.5 or more percent of your funds annually. The annual percentage rate (APR) can depend on how much you have in your account.
For instance, the bank might offer the following rates based on the account balance:
· 0.25 percent for less than $10,000
· 0.5 percent for $10,001 to $99,999
· 1 percent for higher than $100,000
With $5,000 in a savings account at 0.25 percent interest, you can earn $12.50 annually. At a 0.5 percent rate for $15,000, your account will increase by $75.17 each year.
By having a cushion, you can avoid balance, overdraft, and NSF fees. Instead, you can make money on cash just sitting in your account.
You might get two charges for using an ATM not associated with your bank.
However, some banks will reimburse you for these fees.