Bank Account Fees

Bank Account Fees

Bank Account Fees
Bank Account Fees

Bank Account Fees

Bank fees can quickly eat into balances if not managed properly. Many checking accounts charge monthly maintenance fees, transaction fees, overdraft fees, and other expenses that erode savings. It pays to understand common bank fees and ways to reduce or avoid them through smart account selection and management. This guide examines typical bank account fees and strategies to minimize fees.

Monthly Maintenance Fees

Monthly maintenance fees cover the costs for the bank to provide and manage checking or savings accounts. Typical amounts are:

  • Checking – $5 to $25 per month
  • Savings – $2 to $5 per month

These recurring fees are deducted from account balances directly. However, they can often be avoided by:

  • Maintaining a minimum balance, like $500+ or $1,000+ to waive the fee
  • Opting for accounts marketed as “free checking” that have no monthly fee
  • Using a small community bank or credit union which often offer free accounts

Watch minimum balance rules and other conditions associated with fee waivers when choosing accounts.

Per Transaction Fees

Some banks charge fees for transactions on accounts including:

  • ATM withdrawals – $1 to $5 per transaction
  • Debit card purchases – $0.25 to $2 each
  • Deposits – $3 to $10 each
  • Online bill payments – $0.50 to $1 per payment
  • Electronic transfers – $3 to $10 per transfer
  • Paper checks – $0.25 to $1 per check

Accounts limiting transactions or charging per use make frequent spending and deposits expensive. Seek accounts with unlimited transactions when possible.

Overdraft Fees

Overdraft fees are charged whenever purchases or payments exceed the available account balance:

  • Typical overdraft fee – $30 to $37 per overdraft
  • Fees often compound if balance remains negative
  • Covers both important necessities like food or rent and discretionary overspending

These fees are major revenue sources for banks but eat into consumer balances. Avoid through vigilant monitoring or overdraft protection transfers from linked accounts.

Out-of-Network ATM Fees

Using an ATM not affiliated with your bank often incurs surcharge fees:

  • ATM owner fee – $2 to $5 per withdrawal
  • Your bank fee – $1 to $5 per withdrawal
  • Some banks refund fees charged by other ATMs to avoid this issue

Stick to your own bank’s ATM network whenever possible to avoid these extra fees.

Early Account Closing and Inactivity Fees

Banks discourage closing accounts soon after opening or letting sit inactive:

  • Early account closure fee – $25 to $30 if closed within 180 days of opening
  • Inactivity fee – $5 to $15 per month if no activity after 12 to 18 months

Avoid by keeping accounts you open longer term and maintaining some periodic account activity.

How to Reduce or Avoid Account Fees

Strategies to minimize common bank fees include:

  • Maintain proper minimum balances to waive monthly fees
  • Choose online banks that offer extensive fee-free structures
  • Stick to your own bank’s ATMs and avoid transaction fees
  • Opt out of overdraft “protection” if offered to avoid massive overdraft fees
  • Consolidate accounts at one bank to qualify for multi-product waivers
  • Negotiate fee reductions or waivers if you are a long-term customer

The right account choices and careful monitoring of balances goes a long way toward reducing fee expenses. Consider fees heavily when comparing bank options to maximize cost savings.

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