How To Avoid Common Bank Fees


Did you know the average person pays around $250 a year in bank fees? Paying bank fees often feels like you're paying the bank extra simply for holding onto your money. Maybe you've accidentally paid a bill before your paycheck is deposited into your account. Maybe you're constantly bombarded by out-of-network ATM fees. These tips will help you learn how many hidden fees you might be paying  —  and how to avoid them. 



ATM Fees


Your mind isn't playing tricks on you; it is more expensive to use an out-of-network ATM these days. With the rise in popularity of peer-to-peer payment apps like Square Cash, Zelle, and PayPal, account holders are less likely to use ATMs now than ever before. This makes ATMs more expensive for banks to maintain, so the average out-of-network ATM surcharge increases every year. 


You could be paying as much as $8 every time you use an out-of-network ATM  —  $4 to the ATM, and $4 to your bank. If you want to avoid this inconvenient fee, check out your bank's app. Some banking apps use geolocation to pinpoint a nearby ATM that doesn't charge fees. If that isn't an option, you can make a small purchase using your debit card and request cashback, as many stores don't charge a fee for it. 



Maintenance Fees


Paying a monthly maintenance fee is frustrating because you're being charged simply for having an account. Even if you don't use an interest-bearing account, you could pay up to $15 a month, which adds up to a hefty $180 a year in maintenance fees alone. And you could be paying even more if your bank charges a minimum balance fee, which requires you to keep a certain amount in your account at all times. 


Banks are losing money due to lower interest rates, which generate less money on loans. To make up the difference, many banks have increased monthly maintenance fees. Increased fees not only boost their revenue, but they also urge customers to maintain a higher account balance. 


Most banks will waive monthly fees if customers adhere to certain guidelines, which might include maintaining a minimum balance or using your debit card a certain number of times each month. Contact your bank directly to learn how you can avoid these monthly fees, and if there's no getting out of them, you might want to look into an account that doesn't charge maintenance fees.



Overdraft Fees


While most people keep tabs on how much money they have in their bank account, mistakes can  —  and do  —  happen to all of us. If you make a payment before your paycheck clears, you'll be hit with an overdraft fee. The industry standard is $35, and you can be charged for multiple overdraft fees on the same day.


For example, if you spend $100 at the grocery store, $12 at the coffee shop, and $25 at the gas station after your first overdraft fee hits, you'll pay $140 in overdraft fees alone. Fortunately, you can opt-out of the overdraft service, which means your card will be declined if your purchase exceeds your account balance. 


You can also link your debit card to a savings account to cover overdraft costs for added protection. You might still have to pay for the account transfer from savings to checking, but the fee is much lower, around $10. Lastly, some banks will waive overdraft fees in certain circumstances if you have a solid history of making payments on time. It's definitely worth speaking to someone at your bank to see if it's an option for you. 



Excessive Transaction Fees


If you're using a savings or money market account, federal guidelines require your bank to place a monthly cap on the number of withdrawals you're allowed to make. Once you exceed that number, your bank will charge you a fee  —  usually around $5 to $30  —  per transaction. While the regulation means all banks are required to comply, each bank is able to set the fee amount. 


If you want to avoid this fee, it's best to use your checking account instead of your savings account for daily purchases so you won't exceed your monthly transaction limit. You can also look into finding a bank with a lower excessive transaction fee. 



Wire Transfer Fees


While sending money through a wire transfer is undoubtedly one of the best ways to send money quickly, it's also one of the most expensive. You can expect to pay at least $15 for a domestic service fee and $45 for an international transfer, as banks typically charge a high fee when they have to convert currency. 


You can look for a bank with a lower wire transfer fee, but sending money through a peer-to-peer app is a faster option to avoid these hefty fees altogether. Keep in mind that you might still have to pay a fee while using a peer-to-peer app, but the fees are minimal in comparison. 



Paper Statement Fees


If you're still receiving a monthly statement in the mail, you're probably paying for it. In our online world, your account information is readily available 24/7, and you'll save around $3 a month by opting-out of paper statements. It's also the more eco-friendly option too. 


If you prefer to have a paper statement on hand, consider printing it out from your computer. Most banks offer a PDF monthly statement you can download and print without paying out extra. 



Can You Avoid Fees Altogether?


Unfortunately, there's no way to avoid paying every bank fee, but there are ways to minimize the number of fees you accrue in a year. Monitor your balance carefully, always make a note of when your paycheck clears your account, and opt for paperless bank statements to save some money. If you still feel like you're paying too much, you can always look for a bank with power fees.


Related: It’s National Savings Day: 11 Ways Anyone Can Save




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