After opening a Bank of America checking account in the U.S., I realized, "Wait, why do I have to pay a monthly fee when I deposit money in an American bank?"

This is a part that is hard to understand, but it is said to be due to the long-standing financial culture unique to the U.S. While similar systems exist in other countries, there are very few where almost all banks apply it as extensively as in the U.S.

The monthly fees at American banks are simply 'account maintenance fees.' They cover the costs of managing customer accounts, issuing debit cards, operating ATMs, running call centers, and so on.

For example, Chase charges $12 for a basic checking account, Bank of America charges between $12 and $16, and Wells Fargo charges around $10.

However, most accounts can have their fees waived if certain conditions are met. For instance, setting up direct deposit of a paycheck ($500 or more), maintaining a minimum balance ($1,500 or more), or registering as a student account can make it free.

So why has this structure solidified only in the U.S.? There are three main reasons.

First, in the U.S., accounts are viewed as a 'paid financial service.'

The U.S. has the Federal Deposit Insurance Corporation (FDIC) that protects depositors up to a certain amount even if the bank fails. However, since the banks have to pay for that insurance, they ultimately distribute that cost to customers. Moreover, American banks are large, so the costs for IT, security, and customer service operations are enormous. Therefore, the concept of a 'free account' is almost nonexistent.

Second, consumers are accustomed to a culture of service fees.

In the U.S., there are basic fees for healthcare, telecommunications, electricity, internet, and so on. Banks are one of them. People perceive banks not as "places to deposit money" but as "places to receive financial services." Therefore, many consider a monthly fee of around $10 to $15 as a management cost. However, nowadays, online banks like Chime, SoFi, and Ally are breaking this culture by promoting 'No Monthly Fee.'

Third, the revenue structure of American banks is centered around fees.

Traditional banks earn from the difference between loan interest and deposit interest, but large American banks have a much higher proportion of 'non-interest income.' They earn billions of dollars annually from card fees, remittance fees, overdraft fees, and monthly maintenance fees. In contrast, Europe, Korea, and Japan still focus on deposits and loans, so their dependence on such fees is lower.

Now, comparing with other countries, the differences are clear.

In Korea, Japan, and most of Europe, basic accounts are free. Small fees are only charged in special situations like international remittances or interbank transfers.
In the UK, only premium accounts (including insurance and travel benefits) incur a monthly fee of around £10 to £15, while most standard accounts are free.

Canada is similar to the U.S. RBC and TD Bank also charge $4 to $15 monthly, but they can be waived if certain conditions are met.

Australia used to have fees, but most have become free since the 2010s.

Ultimately, only the U.S. and Canada still maintain this 'monthly maintenance fee' culture.

However, this system is gradually disappearing.

Online banks like SoFi, Chime, and Capital One 360 are attracting young customers by promoting "No Monthly Fees." Banks are also reducing branch operating costs due to digitalization, and as competition intensifies, they are trending towards eliminating fees.

In conclusion, the monthly fees at American banks are not just about taking money; they are remnants of traditional financial services. However, the younger generation is questioning, "Why do I have to pay to use a bank?"

Thus, 'No Fee accounts' are now becoming a new standard in the U.S. Although there are inconveniences like not being able to use Zelle or issue checks, the younger generation prefers accounts without fees.