Bank fees have a way of sneaking up on you, adding unnecessary expenses to your financial life. Whether its an unexpected overdraft fee or a foreign transaction charge, banks have a variety of ways to siphon money from your account. The good news is that most of these charges can be avoided with a little foresight and planning. In this article, well take a look at 11 pesky bank fees and give you actionable tips on how to avoid them altogether.
Below, we have mentioned the common bank charges and different ways to avoid bank fees.
Overdraft fees are among the most notorious bank charges, occurring when you spend more than whats in your account. Banks typically charge anywhere between $30 to $35 every time you overdraft, and these fees can pile up quickly if youre not careful.
The easiest way to avoid overdraft fees is to keep track of your balance and make sure youre not spending more than you have. Many banks offer overdraft protection, which automatically transfers funds from a linked savings account if your checking account balance drops too low.
Using an out-of-network ATM is a quick way to rack up unnecessary fees. Not only will the ATM owner charge you, but your bank may also tack on a fee for using a machine outside their network.
Always use ATMs within your banks network to avoid paying extra. Some banks also partner with large ATM networks or offer reimbursements for out-of-network ATM fees, so check if your bank has these benefits. If all else fails, consider withdrawing extra cash when you make purchases at grocery stores or other retailers that offer cash-back services.
Some banks charge a monthly maintenance fee just for holding an account. These fees range from $5 to $25 a month, depending on the type of account and the banks policies.
Most banks will waive the maintenance fee if you meet certain requirements, such as maintaining a minimum balance, enrolling in direct deposit, or linking multiple accounts. If your bank charges a fee and you dont meet these requirements, consider switching to a no-fee bank or a credit union.
Some banks now charge a fee for paper statements, usually around $2 to $5 per month, to reduce printing and mailing costs.
Switch to e-statements. Most banks offer online or emailed statements for free, which is not only cheaper but also better for the environment.
If you use your debit or credit card while traveling abroad, your bank may charge a foreign transaction fee, typically 1% to 3% of each purchase. These fees can add up quickly when making frequent transactions abroad.
Look for banks or credit cards that offer no foreign transaction fees. Many financial institutions now provide travel-friendly cards that allow you to make purchases abroad without any extra cost.
Wire transfers are often the fastest way to send money, but they can be expensive, especially for international transfers. Domestic wire transfers can cost anywhere from $15 to $30, while international ones can go as high as $50.
Consider using alternatives like ACH transfers, which are often free but take longer to process. For international transfers, services like TransferWise or PayPal may offer lower fees than traditional banks.
If you open a new bank account and close it within a few months, your bank may charge you an early account closure fee. This fee typically ranges between $25 and $50 and applies to accounts closed within 90 to 180 days of opening.
Before opening an account, make sure you plan to keep it open for at least six months. If youre uncertain, inquire about any early closure penalties before committing.
If you havent used your account for an extended period, some banks will charge an inactivity fee. This fee is meant to encourage customers to remain active and typically applies after six to twelve months of no transactions.
Perform at least one transaction every few months, whether its a deposit, withdrawal, or purchase. Even setting up a small automatic transfer or bill payment can prevent inactivity fees from kicking in.
Due to federal regulations, savings accounts are often limited to six withdrawals per month. Exceeding that limit could result in a $10 to $15 charge per extra transaction.
Limit your withdrawals from savings accounts or transfer money to your checking account if you need more frequent access. Consider linking your savings account to your checking account for overdraft protection, which may help you avoid unnecessary transfers.
If you deposit a check that bounces, some banks will charge you a returned deposit fee. This charge can range from $10 to $30, adding insult to injury when the original check doesnt go through.
Before depositing a check, make sure the issuer has sufficient funds in its account. If possible, request instant digital payments like Zelle or Venmo to avoid the risk of a bounced check.
Some banks charge account research fees if you ask them to investigate past transactions or provide extensive account information. Depending on the complexity of the request, these fees can range from $15 to $50.
Keep thorough personal records of your banking transactions to minimize the need for account research. Online banking platforms often provide free access to several years of transaction history, so take advantage of this service to look up past activity yourself.
While bank fees may seem inevitable, most of them are avoidable with a little planning and awareness. By knowing which fees to watch out for, like overdraft fees, ATM charges, and maintenance fees, you can take simple steps to avoid them. Opt for fee-free banking options, monitor your accounts regularly, and take advantage of the many digital tools at your disposal. By being proactive, you can keep more of your hard-earned money in your pocket instead of letting it slip away in avoidable fees.
