Every digital bank advertises a free account. Almost none of them are free in every circumstance. The difference between a genuinely cheap account and an expensive one is not the monthly fee — it is five specific charges that appear only when you use the account in particular ways.
Once you know what they are, comparing accounts becomes a short calculation rather than a matter of reading marketing pages.
The five charges
| # | Charge | When it applies | Typical form |
|---|---|---|---|
| 1 | Currency conversion markup | Spending or sending in a foreign currency | A percentage hidden in the exchange rate |
| 2 | ATM withdrawal fee | After a monthly free allowance, or abroad | Fixed amount or a percentage, plus the ATM operator's own fee |
| 3 | Monthly plan fee | On paid tiers | A fixed monthly amount |
| 4 | Receiving money fee | When someone pays into your account | Usually free domestically; charged on international receipts |
| 5 | Incidental charges | Cash deposits, extra cards, replacement cards, inactivity | Small fixed amounts that accumulate |
The same account is cheap for one user and expensive for another.
1. The currency conversion markup
This is the largest and least visible charge on most accounts. Rather than stating a fee, the provider gives you an exchange rate slightly worse than the mid-market rate. The gap is their margin.
You cannot see it on your statement, because the statement only shows the rate you received. To measure it, compare the rate you were given with the mid-market rate for that currency on the same day.
How to estimate it in one step
- Find the mid-market rate for the currency pair on the date of the transaction.
- Divide the rate your bank gave you by the mid-market rate.
- The shortfall, as a percentage, is the markup.
- A 3% markup on 10,000 of spending is 300 — larger than most annual account fees.
2. ATM withdrawal fees
Withdrawal charges have two layers, and people usually notice only one. The first is your bank's fee, which applies after a free allowance. The second is the fee charged by the ATM operator, which appears separately and which your bank cannot waive.
Abroad, both can apply at once. This is why a card advertised as having free withdrawals can still cost several percent per cash withdrawal.
| Withdrawal type | Your bank's fee | ATM operator's fee |
|---|---|---|
| Domestic, within allowance | None | Usually none |
| Domestic, above allowance | Fixed amount or percentage | Usually none |
| Abroad, within allowance | None | Often charged by the operator |
| Abroad, above allowance | Percentage of the amount | Often charged by the operator |
3. The monthly plan fee
Paid tiers trade a monthly cost for better limits. The question is never whether a paid plan is better in the abstract, but whether the fees it removes exceed what it costs you.
Do the arithmetic on your own usage. If your free plan costs you 4% on currency conversion and you convert 1,000 a month, that is 40 a month. A paid plan at 10 a month that removes the markup pays for itself four times over. If you convert 50 a month, it does not.
4. Charges for receiving money
Domestic receipts are usually free. International receipts are where charges appear, either as a fixed fee per incoming transfer or as a conversion charge when the money arrives in a foreign currency.
For freelancers and anyone paid from abroad, this can be the largest cost on the account. Receiving details in the sender's currency usually removes most of it.
5. Incidental charges
Individually trivial, collectively meaningful if you use the service in particular ways repeatedly.
| Charge | Frequency | Worth checking? |
|---|---|---|
| Cash deposit fee | Per deposit | Yes, if you deposit cash regularly |
| Additional card | One-off or annual | Yes, if you share an account |
| Card replacement | Per replacement | Minor, but check delivery fees abroad |
| Inactivity fee | Monthly after a dormant period | Yes, if you keep a backup account |
| Paper statement | Monthly | Easily avoided by choosing digital |
Compare against your budgetA fee only matters relative to what you can afford. Run your own numbers.
Open the loan calculatorBuilding a cost comparison that works
Rather than comparing marketing pages, estimate your own usage over a month and apply each fee schedule to it.
- 1Count your foreign currency spendingTotal per month, in your home currency. Apply each provider's markup.
- 2Count your cash withdrawalsSeparately for domestic and abroad, and note how many exceed the free allowance.
- 3Count incoming international paymentsIf you receive money from abroad, apply the receiving charge to each one.
- 4Add the monthly fee for any paid tierThen compare the total against your free-plan total.
- 5Repeat with a second providerThe comparison only becomes useful when you run two schedules against the same usage.
Fee schedules change often. Digital banks revise pricing several times a year and frequently restructure allowances. Recheck before you make a decision based on cost, and again if you notice a change in what you are being charged.
Frequently asked questions
Are free bank accounts actually free?
They have no monthly fee, but almost always charge for something — withdrawals past a limit, currency conversion, or extra services. Whether it is free in practice depends on your usage.
What is a currency conversion markup?
A hidden charge built into the exchange rate. The provider gives you a worse rate than the mid-market rate, and the difference is their margin.
How many free ATM withdrawals should I expect?
It varies a lot — some accounts offer unlimited, some a set number, some none. Check both your bank's fee and the ATM operator's own charge.
Is a paid plan ever cheaper?
Often yes, if you exchange currency or withdraw cash frequently enough that the free plan's fees exceed the monthly cost.