Yahoo Finance I’m a Banking Expert: Here Are 10 Surprisingly Common Bank Fees You Should Avoid
According to a late 2023 report from the Consumer Financial Protection Bureau, 43% of consumers were surprised by overdraft fees last year. The report also found that 81% of those charged multiple NSF fees struggled to pay bills. Since you already work hard for your money, you don’t want to lose it through bank fees you could avoid.
To help you recognize the common bank fees you shouldn’t be paying, GOBankingRates consulted with a banking expert and other expert sources.
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Monthly Maintenance Fee
Some banks will charge you a monthly maintenance fee to keep your account active. Forbes recently reported that checking account fees typically run between $5 and $15 per month, but they can be $25 or more.
How Can You Avoid This Fee?
“Avoid banks that charge monthly fees just for having your checking account open,” said Steven Crews, a banking expert and founder of Golden Road Reborn. “Look for banks that offer free or low-cost accounts.”
Some banks will also waive account fees if you maintain a certain balance or meet other requirements. You can also look into finding a bank that offers no-fee banking.
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Excessive Withdrawals/Transactions Fee
Most savings accounts will penalize you if you transfer money too frequently, as the federal limit is six free withdrawals and transactions per month. According to Business Insider, you could be charged around $10 for every excess transaction, which could add up quickly.
How Can You Avoid This Fee?
You don’t want to be hit with fees for moving your own money around, but you can avoid this fee by limiting your transactions or using your checking account for your routine banking transactions. If possible, you can also try to find a bank account that waives the six transaction limit.
ATM Fees
You can be charged a fee for making an out-of-network withdrawal at an ATM. These fees are often around $2.50, but they could be nearly $5 per transaction, which could add up fast if you use ATMs frequently. Again, you don’t want to be paying to access your own money.
How Can You Avoid This Fee?
“If you frequently deal with cash transactions or prefer in-person banking, consider a bank with a good number of physical locations and ATMs,” said Crews.
You can try to find a bank that offers you a few free withdrawals or reimburses your out-of-network transactions.
Overdraft Fees
If you don’t have the funds in your account and a transaction goes through, your bank may cover the amount but charge you an overdraft fee. These fees can be as high as $35, and in many cases, the fee ends up being higher than the actual overdraft amount.
How Can You Avoid This Fee?
“If possible, attach your bank account to an internal bank credit card, or if they allow you to attach to an external one, this will allow you to immediately transfer funds to your account to avoid overdraft, especially when you have a timing issue,” said Stoy Hall, a CFP and founder of Black Mammoth.
Another option is to turn on automatic tracking for your checking account. Depending on your bank, you may also have access to other tools, like bill reminders that will notify you when a fixed expense is set to be withdrawn.
NSF Fees
Insufficient funds feeds are similar to overdraft fees — but with an NSF fee, you don’t have enough money in your account to cover a transaction and the bank rejects it rather than covering it for you.
How Can You Avoid This Fee?
Track your spending and set up balance alerts so that you’re notified when bills are coming due and if your balance drops below a set amount. You can also find a checking account that offers overdraft protection to avoid an NSF fee — but be aware that that may come with overdraft fees, so read the fine print.
Paper Statement Fee
Some banks charge a fee for sending you a physical copy of your banking statement, and you could spend $5 just to receive your balance. This is inconvenient, especially since you can usually check everything on the mobile app.
How Can You Avoid This Fee?
Crews suggested, “Check if the bank’s website and mobile app are user-friendly and offer the services you need.”
Review your account details to see if you can waive the paper statement option, since you likely don’t need it. You should be able to complete all of your transactions online or through your phone.
Early Closure Fee
Banks have rules regarding how long an account must be open before you can shut it down without a fee. If you shut down your account before the time period, typically between 90 days to 180 days, you could be charged with fees from $5 to $50.
How Can You Avoid This Fee?
Review the terms and conditions to ensure that you can keep your account open long enough to avoid the fee.
Lost Card Replacement Cost
Some banks will charge you for a replacement debit card if you lose yours. You could spend between $5 and $25 for a new card, depending on your bank and whether you want a rush delivery on your new card.
How Can You Avoid This Fee?
Your best option is to keep track of your card, so you don’t need a replacement, but that’s not always possible. Determine the terms and conditions before creating your account so that you know what to expect in these situations.
Wire Transfer Fee
Banks can charge up to $50 if you want to instantly send cash from one bank account to another. Even though this is a convenient option, you may not want to spend the $50.
How Can You Avoid This Fee?
The best way to avoid this fee is to find another option for sending someone money. Fortunately, most banks will let you do an ACH transfer between accounts, which is free but may take a few days. This is the best option if you don’t need instant access to the funds.
Foreign Transaction Fees
If you make a purchase overseas or from an international company online, you’ll be hit with a foreign transaction charge. The fee will likely be a percentage of the transaction, anywhere from 1% to 4%.
How Can You Avoid This Fee?
Review your account details to see if your bank charges foreign transaction fees. If you do a lot of online shopping or travel often, you’ll want to find an account that waives these fees or use a credit card that doesn’t charge them.
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This article originally appeared on GOBankingRates.com: I’m a Banking Expert: Here Are 10 Surprisingly Common Bank Fees You Should Avoid
