Bank account charges can sneak up on you and eat into your hard-earned money. It’s easy to overlook these fees, but they add up over time. From monthly maintenance fees to ATM withdrawal fees, there are a variety of charges that many people don’t know how to avoid. Fortunately, most of these fees are avoidable with just a little bit of attention and planning.
In this post, we’ll go over how to avoid bank account charges, the most common fees you may encounter, and actionable tips to help you keep more of your money in your pocket.
What Are Bank Account Charges?
Bank account charges are fees that your bank may apply for various services. Some are predictable, like a monthly maintenance fee, while others come up unexpectedly, like overdraft fees. These charges can be associated with things like maintaining your account, making transactions, or using services that aren’t covered in your account’s terms.
Some of the most common charges include:
- Monthly maintenance fees
- ATM withdrawal fees
- Overdraft fees
- Returned check fees
- Paper statement fees
- Minimum balance fees
Although some of these charges may seem small on their own, they can really add up over time. The good news is that most of these fees can be avoided if you know how to manage your account properly.
1. Choose the Right Bank Account
Choosing the right account is the first step in avoiding fees. Different types of accounts come with different fee structures. Some accounts charge a lot, while others are virtually fee-free. Take a close look at the options available to you.
Fee-Free or Low-Fee Accounts
Some accounts have no monthly fees at all, or they offer fee waivers if you meet certain conditions, such as maintaining a minimum balance or making regular deposits. Shop around for checking or savings accounts that waive fees when you meet these requirements.
Student and Youth Accounts
If you’re a student or a young adult, there are usually accounts specifically designed for you. These accounts often come with lower fees or no fees at all. If you qualify for one, take advantage of it.
Online-Only Banks
Online banks often have lower overhead costs than traditional brick-and-mortar banks. This means they can offer accounts with fewer fees. Most online banks don’t charge monthly maintenance fees, ATM fees, or overdraft fees. However, they may not offer physical branches, so consider if that works for your needs.
Credit Union Accounts
Credit unions typically have lower fees than traditional banks. Since they’re non-profit organizations, they’re more focused on benefiting their members rather than making a profit. If you’re eligible to join a credit union, it can be a great way to avoid fees and get better customer service.
2. Avoid Overdraft Fees
Overdraft fees are one of the most common and expensive charges you’ll encounter with your checking account. These fees occur when you spend more than what’s available in your account, and the bank covers the difference. Overdraft fees can be $30 or more per transaction.
Set Up Overdraft Protection
Many banks offer overdraft protection services. With this, if you don’t have enough funds in your account, the bank will automatically transfer money from a linked savings account, credit card, or line of credit. While there may be small fees for this service, they’re typically lower than the standard overdraft fee.
Opt-Out of Overdraft Protection
If you don’t want to pay for overdraft protection, you can opt-out. If you don’t have enough money in your account, transactions that would normally trigger an overdraft will just be declined, preventing the overdraft fee.
Keep Track of Your Balance
One of the best ways to avoid overdraft fees is simply to keep an eye on your account balance. Many mobile banking apps allow you to set up alerts, so you’ll be notified if your balance is running low. Regularly checking your balance helps you avoid the risk of spending more than you have.
Maintain a Buffer
Even if you’re managing your spending well, it’s always a good idea to keep a small buffer in your account. Having an extra $100 or $200 can help you avoid overdrafts in case of unexpected charges or timing issues.
3. Use In-Network ATMs
ATM fees are another sneaky way that banks charge you. When you use an ATM outside your bank’s network, you could face a fee, sometimes as high as $5 per withdrawal. Over time, these fees can add up.
Stick to Your Bank’s ATMs
The best way to avoid ATM fees is to use machines within your bank’s network. Most banks offer ATM locators on their websites or apps, making it easy to find ATMs nearby. When you use your bank’s ATM, there’s usually no fee involved.
Look for Fee-Free ATM Networks
Some online banks or credit unions offer access to large ATM networks where you can withdraw cash without fees. If you need to withdraw cash frequently, look for a bank that offers free access to such networks.
ATM Fee Rebates
Certain banks will reimburse you for out-of-network ATM fees. If you often find yourself using ATMs outside your bank’s network, look for an account that offers ATM fee rebates. This way, you don’t have to worry about additional charges.
4. Switch to Paperless Statements
Many banks charge fees for sending paper statements. These charges can be avoided by switching to paperless statements. It’s easy to do and saves you money in the long run.
How to Set Up Paperless Statements
You can set up paperless statements in just a few steps. Most banks allow you to switch to electronic statements directly through their mobile app or online banking portal. Once you’ve made the switch, you’ll get email notifications when your statement is ready to view online. You can download it as a PDF, making it easy to keep track of your account activity without the extra fee.
Switching to paperless statements is an easy win when it comes to avoiding unnecessary charges. Plus, it’s better for the environment!
5. Set Up Direct Deposit
One way to avoid monthly maintenance fees is by setting up direct deposit for your paycheck. Many banks waive monthly fees if you have a regular direct deposit, so it’s worth considering.
Why Direct Deposit Helps
Direct deposit is fast and secure. It also ensures that your account is funded regularly. This may help you avoid bounced checks, missed payments, or other fees related to insufficient funds. Plus, many banks offer fee waivers if you set up a direct deposit for a certain amount each month.
Direct deposit can also speed up access to your funds. In many cases, you may even get paid a day earlier than if you were to receive a paper check.
6. Pay Attention to Minimum Balance Requirements
Some accounts require you to maintain a minimum balance to avoid fees. If your balance falls below the required amount, the bank may charge you a fee. It’s important to understand these requirements before you open an account.
How to Avoid Minimum Balance Fees
- Understand the Requirements: Before opening an account, check if there’s a minimum balance requirement. Make sure you can meet that requirement regularly.
- Switch to an Account with No Minimum Balance: If you find it hard to keep your balance high enough, consider switching to an account that doesn’t have a minimum balance requirement.
- Maintain a Buffer: If you’re close to the minimum balance, try to maintain a small buffer in your account to avoid falling below the threshold.
Conclusion: Keep Your Bank Account Fees in Check
Bank account fees can add up quickly if you’re not careful. But with the right strategies, it’s easy to avoid many of the common charges. Whether it’s choosing the right account, setting up direct deposit, or using in-network ATMs, small actions can save you big in the long run.
By staying on top of your account and understanding the terms, you can keep your bank fees under control and focus on saving your money.
FAQ
1. How can I avoid monthly maintenance fees on my account?
To avoid monthly maintenance fees, look for accounts that offer fee waivers. Many banks waive fees if you meet certain requirements, such as maintaining a minimum balance or setting up direct deposit.
2. Can I avoid ATM withdrawal fees?
Yes, by using ATMs within your bank’s network. Some banks also offer fee-free ATM access through large ATM networks or reimburse fees for out-of-network ATM withdrawals.
3. What’s the best way to avoid overdraft fees?
You can avoid overdraft fees by setting up overdraft protection, tracking your account balance, and opting out of overdraft coverage. Keeping a small buffer in your account can also help prevent overdrafts.
4. How do I switch to paperless statements?
Most banks allow you to switch to paperless statements through their online banking or mobile app. Simply follow the instructions to receive your statements electronically instead of by mail.
5. What should I do if I don’t meet the minimum balance requirement?
If you don’t meet the minimum balance requirement, you may incur a fee. To avoid this, consider switching to an account with no minimum balance or ensuring that you keep a sufficient balance in your account.