Key takeaways
- Bank fees come in many forms and can chip away at your savings if you’re not careful.
- Common bank fees include monthly maintenance fees, overdraft fees, and out-of-ATM charges that can add up quickly.
- You can avoid most fees by keeping track of your balances, planning ahead, or opting for banks that don’t charge fees.
Bank fees can be pricey. Incurring an extra charge now and then may not seem like a big deal. The problem is that these fees can add up fast. And they often happen when you can least afford them.
Fees are a major source of revenue for banks. Some are familiar, like out-of-network ATM fees and overdraft charges. Others are more sneaky – an insufficient funds fee – but can still pack a punch. If you’re not careful, keeping money in a bank can become expensive.
Can you steer clear of these fees? Absolutely! Here are twelve types of bank fees you should know about and how to avoid them.
Monthly maintenance fee
A lot of banks charge a monthly maintenance fee or service fee on your checking and savings accounts. Maintenance charges are basically minimum balance fees. They cover the cost of managing your account.
The exact cost varies. Bankrate found in their 2024 checking and ATM survey that interest-bearing or rewards checking accounts cost, on average, $15.45 per month, while non-interest (basic) deposit accounts cost $5.47 per month.
The good news is you can usually get a monthly maintenance fee waiver. To have an eligible account, you will need to maintain a minimum balance of $500 or $1,000, set up direct deposit, make a certain number of transactions per month, or be a student.
How to avoid it
Read the fine print. Consider online banking. Choose banks with free checking and no minimum balance requirements. Or one that offers fee waivers to eligible accounts.
Having a checking and savings account with the same bank can also help you avoid a maintenance fee.
Overdraft fee
Banks that allow overdrafts often charge a fee for the service. Spend more than you have in your checking account, and you’ll have a negative balance and an overdraft fee. It can happen with debit card purchases, checks, or ATM withdrawals – any time the bank has to cover a transaction because you do not have the funds.
Overdraft fees can be a lot. The Federal Deposit Insurance Corporation found that they are around $35 per transaction. This means that if you make a second purchase while your account is negative, you will be charged another overdraft fee.
Other banks are more lenient. Some only penalize you when the overdraft is over $50. Others give you one business day to bring your account back to $0 before charging you.
How to avoid it
You can decline overdraft services and avoid the fee. But your transaction will be declined, and you will likely incur an insufficient funds fee.
The best defense is to monitor your bank account and track your spending. Set up low-balance alerts to avoid overspending. Or look for banks without overdraft fees.
Another option is to link your checking account to your savings account or line of credit. If you overdraw, the bank will take money from your savings or line of credit. There is a fee for the service, but it’s much less.
You can also use a credit card. Only charge when you can afford to pay for it at the end of the month. Otherwise, you’ll have to pay interest. The interest on your credit card may add up to more than the overdraft charge.
Lastly, ask for forgiveness. Some banks offer fee waivers if you don’t have a history of negative transactions.
Looking for a bank with few to no monthly fees?
Overdraft protection fee
Overdraft protection is when the bank transfers money from your savings account or line of credit to your checking account so that it stays positive. You avoid the hefty overdraft fee, but this service comes with its own charges. Fees range from $0 to $12.50.
Additionally, you may incur interest if you link to a line of credit. Be sure to repay the funds fast, as the interest may be more than the overdraft fee would have been.
How to avoid it
Do not opt into overdraft protection. Find a bank with no overdraft fees. Look for one that does not charge to transfer money to cover overdrafts.
To fully avoid the fees, make sure your balance never falls below zero. Track your daily balance online. Try to keep a little extra in your checking account to cover unexpected charges.
Insufficient funds fee
Banks charge an insufficient funds or non-sufficient funds (NSF) fee when there isn’t enough money in your checking account to cover a transaction. Unlike with an overdraft, you won’t get a negative balance. Instead, the bank will decline the transaction, and you will have to pay a fee.
Insufficient funds fees can be high but are less than an overdraft charge. And they have been going down. Bankrate found that the average NSF fee in 2024 is $17.72, 11% lower than the previous year.
How to avoid it
Once again, the best thing you can do is carefully track your spending. Check your account balance before you make a large purchase or write a check. Note down when automatic payments are made so that you don’t accidentally incur a fee.
Look for banks that have eliminated both overdraft and insufficient funds fees.
Need emergency cash now? We have solutions.
Out-of-network ATM fee
Use an ATM outside your bank’s network, and you’ll pay fees. On average, you will pay a surcharge of $3.15 to the ATM-owning bank and $1.58 to your bank, totaling $4.73 per transaction. This can add up quickly if you withdraw cash often.
How to avoid it
Try to stick with your bank’s in-network ATMs. Look for banks with an extensive network with ATMs near you or waive ATM fees if you use another bank’s machine. Online banks typically don’t have their own ATM networks but give you free access to Allpoint or MoneyPass ATMs.
Another option is to request cash-back from a retailer when you use your debit card. You can also use a digital payment app like Venmo or Zelle.
Excess transaction fee
If you make more than six transactions or withdrawals per month from your money market or savings account penalize you with an excess transaction fee, close your account, or move it to a non-interest-bearing account. This is due to Regulation D, a Federal Reserve Board rule that required banks to put caps on withdrawals and transfers from non-transaction accounts. The regulation was canceled in March 2020, but many banks still have the limit in place.
New
Excessive withdrawal fees often range from $3 to $25 for each additional withdrawal or transfer.
How to avoid it
Plan ahead. If you know you’ll need to transfer money from your savings to your checking account, try to make one transfer per month. Set up direct deposit so that a percentage goes to your checking and a percentage to your savings account. This setup will help limit internal transfers.
Aim to use your savings or money market savings accounts only for emergencies and specific goals.
Inactivity fee
Banks charge an inactivity or dormancy fee if there has been no activity on your account for six months to a year. That means no transactions, deposits, withdrawals, etc.
Not all banks charge this fee. Those that do charge $5 to $20 per month.
How to avoid it
Use your bank accounts. Only open bank accounts you need and ensure each one serves a purpose. Set up automatic payments or transfers to accounts you don’t use on a regular basis. If you no longer need the account, close it. There’s no point in having an account you don’t need.
Early account closing fee
Banks do not like it when you open accounts and promptly close them. Many financial institutions charge an early account closing fee of $5 to $50 to discourage this behavior. You’ll incur the charge if you close the account within the first 90 to 180 days after opening.
How to avoid it
Before you open a bank account, do your research. Make sure it is the one you want, has the right features, and you will use it.
Check the fine print to see if your bank charges an early closing fee. If it does, keep the account open for the required amount of time.
Paper statement fee
Paper statements are still a thing, but banks are trying to eliminate them. Hence, the paper statement fee. This fee covers the cost of printing and mailing your monthly bank statements. Generally, it ranges from $1 to $5 per paper statement and $0 for electronic statements.
How to avoid it
Go to your bank’s website and select electronic statements only. You will save this charge and help reduce paper waste. Or check with your bank to ensure they don’t charge for paper statements.
Bad Credit? Get $1,000 with No Deposit
- Instant Approval Credit Cards
- Bad Credit Credit Cards with no Deposit
- Best Credit Card Offers
- Instant Approval Credit Cards
- Bad Credit Credit Cards with no Deposit
- Best Credit Card Offers
Fees & Rates of Сards for bad Сredit
Are you struggling with a low credit score and feeling the impact on your financial opportunities? It's time to turn the tide with our specially designed credit cards for bad credit! Our cards offer a lifeline to those who need a fresh start, providing the perfect tools to rebuild your credit score and regain financial stability.
Apply NowLost debit card fee
If you need to replace your debit card, your bank may charge a fee of $5 to $20. You will likely need to pay extra for express delivery. Some banks will waive the fee for the first replacement card or if you report the it lost due to theft or fraud.
How to avoid it
Take precautions to keep your card safe. Store it in a secure wallet or purse, and avoid leaving it unattended.
Consider using mobile payment options like Apple Pay or Google Pay, which can reduce the need to carry your physical card. Some banks also offer virtual debit cards for online transactions, minimizing the risk of losing the physical card.
Additionally, look for banks that offer free card replacement as part of their account benefits.
Wire transfer fee
Wire transfers are a fast way to send money between banks domestically and abroad. The money is typically processed within one to two business days, even for international transfers.
The problem with wire transfers is the fees can be hefty. Domestic outgoing wire transfers range from $0 to $40, while international ones reach $50. Some banks even charge you for incoming wire transfers.
How to avoid it
Ask yourself if you really need to make a wire transfer. You could transfer funds for much less using Zelle, Venmo, or other money-transferring apps.
Plan ahead so you don’t need the funds to get there so fast. Most banks offer an Automated Clearing House Network (ACH) transfer option. Check the fees and the amount you can transfer.
Consider your other options for transferring money. Chances are you’ll be able to find one that will cost less.
Can you buy a money order with a credit card?
Foreign transaction fee
Any time you travel outside the U.S., you need to be aware of foreign transaction fees. Banks charge them for debit card transactions abroad or when you withdraw cash in a foreign currency. These fees range from 1% to 3% of the transaction amount and can add up quickly.
How to avoid it
Consider using a debit or credit card that does not charge foreign transaction fees. Opt to pay in the local currency rather than letting the merchant handle currency conversion, as their exchange rates are often less favorable.
Another option is to take out cash in advance and avoid any foreign ATM withdrawals.
Negotiating bank fees
If you’re tired of your current bank and want to start fresh with fewer fees, consider online banking and credit unions. Online banks have lower overhead costs because they do not have physical locations. This translates to fewer fees.
Credit unions are not-for-profit member-owned financial institutions. As such, the profits are returned to members through lower fees and higher interest rates. You have to meet membership requirements to join.
You may be able to stay with your current bank and pay fewer fees. If your account is in good standing (no overdrafts or NSF fees and a positive balance), call customer service and ask for fee waivers or to lower specific charges. Mention if you’ve been a long-time customer or have multiple accounts with the bank.
Focus on specific fees, such as the overdraft or monthly maintenance fee. To waive the service fee, you may need to set up direct deposit, maintain a certain balance, or make a specific number of transactions per month.
Tell them you’re switching to another bank without monthly fees if they won’t lower theirs. It may compel them to offer you a deal.
Frequently asked questions
1. Can you find bank accounts with no fees?
Many online banks and credit unions offer no fee checking accounts. These accounts often have no monthly maintenance fees, overdraft charges, or minimum balance requirements. Look for online banks with no fees. Check the fine print to ensure you qualify for fee waivers.
2. How can you avoid bank fees?
The best thing you can do is monitor your account balance. Tracking your spending can help you avoid overdraft charges, overdraft protection fees, insufficient funds fees, service fees, and excess transaction fees. Plan ahead, and you won’t have to use an out-of-network ATM, conduct a wire transfer, or pay for a paper statement. You can also choose a bank with no fees.
3. Can I get my bank fees waived?
You may be able to get fee waivers by contacting customer service and explaining your situation. If your account is in good standing, many banks will waive an overdraft as a one-time courtesy. You may not have to pay a monthly service fee if you meet specific requirements like maintaining a minimum balance or setting up direct deposit.
Bottom line
Avoiding bank fees isn’t just about choosing the right bank. You have to establish responsible banking habits. Check your balance regularly so you don’t overspend. Set up low-balance alerts and note down when automatic payments are deducted. You can sidestep most fees and save money if you keep track of your spending.
If this is too much work, look for banks that don’t charge monthly fees or ones with lower costs. Banking shouldn’t cost you an arm and a leg. Online banks and credit unions are a great place to start. Online banking can be convenient and many services provide more benefits without fees eating into your balance. Credit unions are member-owned and less focused on profit. The right bank could save you money in the long run.
