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.

Bank Account Fees