Disadvantages of Checking Accounts | 9 Cons You Must Learn Now

A checking account is a crucial instrument for keeping track of personal money. All checking accounts are operated in the same way by all financial institutions. However, account features and fees differ. Managing a checking account offers benefits and drawbacks that you must examine before deciding on a financial institution and checking account alternatives. Thus, we have written this post to highlight the disadvantages of checking accounts. Come along!

Basics of Checking Accounts

Disadvantages of Checking Accounts

A checking account is mainly used for day-to-day operations. A financial institution, such as a conventional bank, an internet bank, or a credit union, holds checking accounts.

You may deposit and withdraw money from a traditional checking account (through the bank or an ATM). Checking accounts come in diverse styles, but they always have fundamental features. This includes:


You may deposit in person at a physical location, at an ATM, or online/via a mobile app. You may also set up direct deposit from an employer or transfer cash from another bank account.


You may make a cash withdrawal at an ATM or in person. There are no limits on how frequently you may withdraw money from particular accounts or how much money you can remove at once. (However, some accounts have a minimum balance requirement, and if you fall below that, you’ll have to pay a monthly service charge — so make sure you don’t go below that.)

ATM/debit cards

These are the cards you’ll use to get cash from an ATM. You may use a debit card to make payments and transactions in stores and online. You may also use an ATM to get cash. After you’ve opened your account, you should contact your debit card between 7-14 business days, and it’ll be available to use after it’s been activated.


You may make checks using the money in your checking account in most (but not all) checking accounts.

Disadvantages of Checking Accounts

Disadvantages of Checking Accounts

While having a checking account to hold your money is a beautiful idea, some drawbacks. Account Fees are a significant factor in this category.

The costs of using a checking account are one of the main drawbacks. Expenses might be a monthly fixed payment or per-service fees that include customer support calls. Many internet banks now offer no-fee checking accounts, even though most big brick-and-mortar banks charge fees.

Checking accounts include several other drawbacks, including:

Deposit requirements

Some checking accounts have a $100 minimum balance requirement. Often, banks promote this as a benefit for you, such as avoiding paying a set monthly cost or earning a little interest. Fees are levied if the balance exceeds the specified thresholds, which is a downside. This is in addition to the fact that you cannot access all of your funds.

There’s a good chance you won’t get any interest.

Some checking accounts pay interest, although the majority do not. This is because checking account money is usually regarded like currency and spent for day-to-day transactions rather than being kept for lengthy periods. If you want to expand your money, you may wish to create a savings account in addition to your checking account.

Withdrawal restrictions

Depending on your bank and account type, you may have ATM withdrawal limitations or daily debit purchase limits. However, this might be a disadvantage if you need more cash on hand or make a more significant transaction using your debit card.

Checking Accounts are expensive.

One is that checking accounts can be expensive. There may be monthly fees, ATM fees, and overdraft fees. Typically, checking accounts are free with the purchase of other services such as a savings account or interest-bearing checking account. Today, no federal regulations exist to limit the fees that banks can impose on their customers for using ATMs outside of their networks.

Accordingly, many banks charge $2-$3 per withdrawal in addition to what the owner of the ATM charges you. Banks also pass along costs when using an out-of-network ATM and pay surcharges themselves. This fee is called an ATM surcharge fee.

Additionally, some customers get charged overdraft fees if their bank allows them to make purchases or withdraw money even though they don’t have enough funds in their checking account at the time.

Banks Can Change Terms of Accounts Without Notice

Another disadvantage to using a checking account is that banks can change the account agreement terms without giving customers any notice.

For example, they could raise the overdraft fee or institute a new monthly fee without letting customers know in advance. So it’s important to read over your account agreement carefully and ask questions if there are any elements you don’t understand.

Checking Accounts Can Be Frozen

A third disadvantage to using a checking account is that banks have the right to freeze the account if they believe it has been used for fraudulent purposes.

This means that you wouldn’t be able to access your funds even if needed for an emergency. To avoid this, make sure to monitor your account frequently and watch out for any unauthorized charges.

Checking Accounts May Not Protect You from Identity Theft or Fraud

Finally, using a checking account doesn’t protect you from identity theft or fraud the way credit cards do. If someone steals your debit card information and makes purchases on it, then you could end up getting charged unexpectedly.

This is why it’s a good idea to monitor checking accounts frequently and check statements for anything suspicious. Saving money can become difficult if a bank imposes many different fees regularly. In addition, banking without overdraft protection will limit the amount of money in one’s account at all times, which can be inconvenient.


It can be difficult to monitor an account for fraudulent activity, especially if the person has access to all of your debit card information (e.g., PIN). Finally, many people already receive credit cards but do not have to check accounts; therefore, they may not need to use bank services at all or may want to switch over to a different bank service to avoid the disadvantages listed above.

Checking accounts can be hacked.

And finally, checking accounts can be hacked, resulting in identity theft. This is why it’s important to have strong passwords and monitor your account frequently.

What are the Significant Checking Account Fees?

What are the Significant Checking Account Fees

The expense of fees, mainly checking account fees, is one of the top concerns among banking customers. Checking accounts are the most extensively utilized banking financial instrument.

On the other hand, bank savings accounts have lower costs since they are more straightforward for banks to maintain. They do, however, pay account holders interest, although at a modest rate.

According to industry statistics, most bank savings accounts offer about 0.08 percent. As a result, here’s a rundown of the most typical checking account fees, as well as how much they usually cost.

Checking account fees:

These fees cover the expenses of keeping your checking account in good working order. Banks frequently charge this fee and ranges between $5 and $15 each month.

Fees for a minimum balance:

Banks want to make it worthwhile to provide you with a checking account. This is the primary reason why many come with minimum account needs. Some banks charge fees for low balances, and others do not. At $25 per transaction, a minimum balance fee is among the most expensive.

Overdraft costs at the bank:

Overdraft fees are a significant annoyance for bank customers who overdraw their accounts. As a consequence of the payment and charges totaling more than what is in the account, the account has a negative balance. At roughly $35 per overdraft, bank overdraft costs are the highest of all bank expenses.

Returned deposit fee:

A bank client who submits a bounced check will undoubtedly be charged a returned deposit fee to offset the expenses of processing the missing money. Customers pay around $15 per returned deposit in these costs.

Paper statement fee: 

If checking account clients want paper statements every month, the bank may charge them a fee. Because most banks prefer their clients to get certain statements through the internet, they charge a fee to cover generating and shipping paper statements. This charge would likely cost between $2 and $5 each month.

ATM Fees:

A bank’s cost of running automated teller machines is covered by this fee, which is charged for each transaction. When consumers use the bank’s ATM, many banks do not charge them, but outside banks always do. Outside bank-owned ATMs will cost you between $2 and $4. Non-bank ATMs impose a higher fee, often up to $10 per transaction.

ATM withdrawal fees:

Banks charge international travelers $5 for each transaction for ATM withdrawals. Requesting that banks waive certain costs is typically worthwhile. Banks want to maintain their business since there is so much competition from internet banks and credit unions. As a result, you have a strong probability of getting your costs waived.

Frequently Asked Questions

What are the disadvantages of checking accounts?

Checking accounts have several drawbacks, including:

  • Deposit Requirements
  • There’s a good chance you won’t get any attention.
  • Withdrawal restrictions

Are checking accounts covered by insurance?

Yes. The FDIC insures bank checking accounts, whereas the NCUA insures credit union checking accounts. Insurance limitations should be limited with your financial institution.

How often should you monitor your account?

You must monitor your account at least once or twice a week. You should check your account more often as your activity and transactions increase. It would help double-check your balance and transactions to ensure they are correct. Banks make it simple to manage your account with internet banking and Smartphone apps.

Are checking account fees waived by banks?

Yes. Bank checking account fees may often get eliminated if account users achieve specific criteria, such as using their debit card regularly or maintaining account balances over a particular amount of assets.

Is it true that having too many checking accounts is a problem?

Yes. Many accounts might be more challenging to keep track of when monitoring deposits and withdrawals. If you don’t carefully track each account, you can end yourself with an overdraft or other costs. For several checking accounts, monthly maintenance costs may quickly pile up.

Should checking and savings accounts be linked?

Yes. It’s best to link your checking and savings accounts. This will help you to utilize your funds as overdraft protection. This is also a feature that you must request from your bank and may help you avoid overdraft costs.

How secure is a checking account?

For up to $250,000, checking accounts at all FDIC, NCUA, and ASI-insured banks and credit unions are covered. Banks and credit unions use sophisticated security software and encryption techniques to secure their accounts. Give your financial institution a call if you want to learn more about what they do to safeguard you.

When utilizing a checking account, what are the obligations of the account owner? 

When utilizing a checking account, you must write and record checks correctly. You must also double-check the correctness of your monthly bank statement and retain canceled checks among your permanent documents.

What are the reasons why banks impose fees for checking accounts?

Banks often charge for their services to profit and cover operational costs. When a bank loans you money, it will charge you interest. 

How can you avoid paying fees when you have a checking account?

Banks may offer to eliminate the monthly maintenance cost on your account if you maintain a sufficient balance in the account. Some banks may eliminate your monthly charge if you keep a particular level in your account throughout the month. This is either a minimum daily balance or an average daily balance requirement.


In conclusion, checking accounts come with some demerits. And if you need more help in this regard, the highlights on the disadvantages of checking accounts above will aid you immensely.