Banking fees are big business.
Americans pay an average of $329 in bank fees annually. Worse yet, we may be paying fees without realizing it.
Studies from the Common Cents Lab find that we underestimate how much we’re paying in bank fees because we tend to forget the mistakes we’ve made. For example, you may block out paying an out-of-network ATM fee or accidentally overdraft your account with a small purchase.
But your bank isn’t forgetting, and it is charging you for it.
To help you stay informed about confusing fees, here is a list of nine bank fees you may not even realize you’re paying.
Need cash but don’t have time to go across town to your bank’s ATM? That’ll cost you. Most banks come with ATM fees, which means you’re charged each time you withdraw money from an ATM that is not in your bank’s network. And those charges add up. The average out-of-network ATM withdrawal fee is nearly $5. That’s $5 just to get cash.
The solution: Be smart. You can either go out of your way to get money from your bank’s ATM. Or, you can use a bank that gives you access to thousands of fee-free ATMs.
Maintenance fees or service fees
A common fee that you’ll see is a monthly maintenance fee. This is a fee many banks charge for simply having an account.
Banks charge an average of $15 per month in maintenance fees for an interest-bearing checking account. That’s $180 a year. Bank customers typically need to pay this fee, regardless of how much they actually use their account during the month.
Banks may offer to waive the fee if you:
- Keep your account balance above a certain amount (for example, $1,500)
- Set up a monthly direct deposit into your account
- Make a certain number of purchases with your debit card each month
- Are a student and meet age requirements
An even easier option for you to avoid these fees? Look for a bank account that don’t charge a monthly maintenance fee.
Overdraft fees are a big problem for consumers who get hit with them. A bank will charge an overdraft fee when you try to buy something without enough money in your account.
In 2017, Consumers paid $34 billion in overdraft fees. And, it’s easy to see how these fees can add up when the median overdraft fee is $33. Banks use what they call “overdraft protection” to charge these fees. If you are enrolled in overdraft protection, your bank will still approve the transaction even if you don’t have the money in your account to pay for it. For this service, they’ll charge you an overdraft fee. This becomes a very expensive way to borrow money for a short period of time.
For example, If you had $10 in your account and you swipe your debit card to buy something for $15, you’ll be charged a $33 fee to borrow the $5 you don’t have.
You can avoid overdraft fees for ATM and debit card transactions by not opting into overdraft protection. If you haven’t opted-in, your transaction will be declined if you don’t have enough money in your account. Sure, that’s a bummer, but it can be better than paying an overdraft fee.
An easier way to avoid overdraft fees is to simply use the SpotMe feature with your Chime account, a fee-free overdraft option.
Wire transfer fees
When you need to send money to another bank quickly and securely, one of your options is to do a wire transfer. But wire transfers can come with big fees. For example, Bank of America charges $30 for domestic wire transfers and $45 for international wire transfers sent in U.S. dollars.
It’s not always possible to avoid paying a wire transfer fee. But, if you’re considering sending a wire transfer, ask yourself if there’s a different alternative to send money without fees.
Non-sufficient funds fee
If you’ve written a check but don’t have the money in your account to cover the funds when it is cashed or deposited, you’ll be hit with a returned check fee or non-sufficient funds (NSF) fee. This is a tricky situation because until your check has been deposited, the money will still be available in your account for you to spend. If you’re not keeping tabs on outstanding checks, you may end up letting your account balance get too low and be hit with an NSF fee.
Returned deposit fee
Perhaps one of the most unfair fees to be charged is the returned deposit fee. If someone writes you a bad check — that is, they don’t have the money in their account to cover it — your bank will cancel the deposit and deduct the amount of money that was credited to your account. When they do this, they’ll often charge you a fee. Now you’re not only out the money that you thought you deposited, but you’re hit with a charge on top of it.
Want a paper statement? There’s probably going to be a fee for that. Many banks charge a fee for mailing out your bank statement each month. While this is an annoying fee, it’s usually avoidable. Most banks allow you to opt-out of paper statements and instead get your statements online. Plus, ditching those paper statements is the green thing to do.
Stop payment fees
There may be a time in your life when your check gets lost in the mail and you need to send another one. But what do you do about that first check you sent? Most banks allow you to stop payment on a check — for a fee.
Fewer checks are being written these days, which means this shouldn’t be a problem you run into frequently. But if you want to absolutely avoid this extra cost, pick a bank account that doesn’t charge you for canceling a check.
Early account close fee
If you sign up with a bank and realize early on that it’s not the right fit, you may be charged a fee. Some banks, for example, charge an early account closure fee if you open an account and close it shortly thereafter. PNC Bank, for example, charges a $25 fee if you close your account within 180 days of opening it.
Avoid fees by opening a fee-free bank account
Bank fees can be an enormous weight on your checking account. But by choosing the right bank, you can avoid fees – leaving you with more money in your pocket. What’s not to like about that?