Question

Nathan has $300 to open a checking account. He wants an account with the lowest fees. He plans on using the ATM machine, and his employer offers direct deposit.

Bank Account Terms and Conditions
Bank A has a minimum balance of 500 dollars, interest of 0.1 percent, overdraft protection, 0 dollar ATM fee, and 0 dollar monthly fee. Bank B has a minimum balance of 250 dollars, interest of 0 percent, no overdraft protection, 0 dollars for all A B C bank A T M s, and 5 dollar monthly fee. Bank C has 50 dollar minimum balance, 0.1 percent interest, no overdraft protection, 2 dollar per A T M transaction, 10 dollar monthly fee or 0 dollars with direct deposit. Bank D has 100 dollar minimum balance, 0.1 percent interest, no overdraft protection, 0 dollar A T M fee, and 5 dollar monthly fee or 0 dollars with direct deposit.

Which checking account would be best for Nathan?

Answer 1

Bank D.

Reason: Nathan has $300 so he meets Bank D’s $100 minimum (but not Bank A’s $500). With his employer’s direct deposit the $5 monthly fee at Bank D is waived and ATM fees are $0, so his ongoing cost is $0. Bank C also waives its $10 fee with direct deposit but charges $2 per ATM use. Bank B charges $5/month (no waiver) even though its ATM fee is $0.