Banks waive the monthly maintenance fee if you keep a minimum balance. Keeping that balance is not free — the money sits at the checking account’s rate instead of earning what a high-yield account pays.
How it works
The cost of keeping the balance is the interest you give up: the locked amount multiplied by the gap between what your account pays and what you could get elsewhere. The cost of not keeping it is the annual fee. Whichever is smaller is the cheaper option.
Above a certain balance, paying the fee is the cheaper choice
The offer is framed as the bank doing you a favour, and at small balances it is. But the forgone interest grows with the balance while the fee stays flat, so they cross. At a $12 monthly fee and a 4% rate gap, the crossover is $3,600. Below that, keep the balance. Above it, move the money and pay the fee — $5,000 locked up gives away $200 a year to avoid $144, so paying is $56 better. The larger the required minimum, the worse the waiver deal gets.
What this does not include
This compares interest against fees and nothing else. It ignores tax on the interest earned, any cost of moving or closing an account, and the non-financial reasons to stay — branch access, bundled products, or relationship pricing on a mortgage. It also assumes the alternative rate holds, and a high-yield savings rate is variable.
How to use this calculator
- Enter the minimum balance the bank requires you to hold.
- Enter what your current account pays — often 0% — and what you could earn elsewhere.
- Enter the monthly fee charged if you drop below the minimum.
- The break-even figure shows the balance at which the two options cost exactly the same.
Frequently asked questions
Is a fee waiver ever a bad deal?
Whenever the interest you give up exceeds the fee you avoid — which is a question of size, not of principle. A $500 minimum to avoid a $12 fee is clearly worth it. A $25,000 minimum to avoid the same fee gives up around $1,000 a year in interest to save $144.
What rate should I use for the alternative?
The rate you could realistically get today on an account you would actually open, not the best rate advertised anywhere. High-yield savings rates are variable and move with the wider rate environment, so a figure that looks right today may not hold all year.
Are there other ways to get the fee waived?
Often, yes — direct deposit above a threshold, a set number of debit transactions, or linking another account. Those cost you nothing in forgone interest, so where they are available they beat both options here.
