8 Common Bank Fees to Avoid
Do not pay more for your banking transactions than necessary.
- There are many different financial institutions to choose from when opening a bank account.
- However, some banks charge more fees than others.
- Fees to avoid include account maintenance and paying personal checks.
You need a bank account to handle a lot of financial transactions, but they can be expensive if you’re facing a lot of charges for your account. To make sure you don’t pay more than necessary, be on the lookout for these common bank charges to avoid.
1. Account maintenance
Account maintenance fees are only charged for opening your account. They usually add up to a few dollars a month, but it can add up. You often have the option of avoiding them by meeting certain conditions, such as depositing money directly into your account.
If you can meet the requirements for a fee waiver, account maintenance fees aren’t the end of the world. But in general, you don’t want to commit to paying a monthly fee forever just to be a customer of a particular bank, unless the financial institution offers some other very generous perk to offset this unnecessary cost.
2. Minimum Balance
A minimum balance fee is charged if you do not maintain a certain balance in your account. You will need to know how they calculate your balance for these purposes. For example, some banks look at your average daily balance, so you should keep money in your account regularly throughout the month.
If you are unsure whether you can meet a bank’s minimum balance requirements, do not open an account with these fees. You’ll also want to make sure you’re okay with tying up as much money in your checking account as you could possibly use for other things.
ATM fees are charged when you use an ATM outside your bank’s network. You could be charged by both your bank and the foreign ATM. Look for a bank that offers a large network of ATMs to avoid these fees. Or find a bank that reimburses you for using out-of-network ATMs.
Overdraft fees are charged if you try to access more money in your account than you have. For example, if you have $20 in the account and you try to use your debit card to make a $25 purchase, you could be hit with overdraft charges. These fees are very expensive. Try to keep a cushion in your account to avoid accidentally letting your balance drop too low, or consider using a bank that doesn’t charge overdraft fees.
5. Costs of returned items
A returned item fee, or an insufficient funds fee (NSF), is charged when you bounce a check and it should be returned uncashed. You will be charged by your bank and the store where you issued the check often charges you as well. These fees are also expensive, so keep track of your checkbook and try to keep a cushion in your account to avoid these fees.
6. Foreign operations
Banks often charge fees when you use your debit card to make charges or access money abroad. This can increase the expense of your trip, so find out if your bank will charge you. If so, consider taking a foreign credit card to make purchases instead, as many credit cards do not charge foreign transaction fees.
7. Transfer fees
Most banks charge wire transfer fees if you transfer money electronically using certain methods. Find out when and how these fees are charged. If you need to transfer money by wire transfer, you may not be able to do anything about these fees if your bank imposes them.
8. Personal checks
Finally, your bank may charge you for ordering personal checks. However, you don’t have to order checks through your bank – you can get your account and routing number and order from anywhere. Some banks also offer free checks.
By making sure you factor in all of these fees when opening an account, you can minimize what you pay for your banking relationship and keep more money in your pocket.
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