10 Common Bank Fees and How To Avoid Them
Written by
Jacob Wade
Edited by
Elizabeth Constantineau
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Getting hit with an unexpected banking fee can be frustrating. If you’re not careful, these fees can add up quickly. Some of these fees, as in the case of overdrafts, can even compound. Fees are more common than you might think and banks may charge you when you aren’t expecting it.
10 Common Bank Fees and How To Avoid Them
Whether you have an account open with a brick-and-mortar bank or prefer online banking, you might not be expecting some of the sneaky fees banks can charge. Here are some of the most common bank fees and ways to avoid paying them.
Account Maintenance Fee
This is typically a monthly service fee that may be charged to keep the account open. The fee can range from $5 to $20 or more depending on the bank and account chosen. Fees may also be assessed for having a low balance or not setting up direct deposit.
How To Avoid This Fee
If your company offers direct deposit for your paycheck, it may pay to take advantage. It’s both smart and convenient. Your money is immediately available in your bank account on payday, and you don’t have to wait in line at the bank to deposit your check. In addition, many banks waive monthly fees if you set up direct deposit with them.
You may also be able to avoid this fee by maintaining the required minimum balance. For example, Bank of America, Member FDIC, charges up to $12 per month for its Advantage Plus Banking® account. However, you can avoid this fee entirely if you maintain a minimum daily balance of $1,500 or more.
ATM Fee
You will incur ATM fees if you use ATMs outside of your bank’s network. There may be fees assessed by your bank and the ATM operator — hitting you with multiple fees in one transaction.
How To Avoid This Fee
Use your bank’s ATMs. The largest banks own and operate thousands of ATMs across the country. If you bank at one of them, odds are you can easily find a nearby ATM when you need cash. However, most banks will charge you an extra fee if you use an ATM operated by a different bank.
You’ll also typically pay a fee using an ATM kiosk at a gas station. For example, Chase charges $3 per withdrawal at a non-Chase ATM in the U.S., Puerto Rico and the U.S. Virgin Islands.
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If you frequently take cash out, these fees can add up. You can avoid this by always using your own bank’s ATMs or using a bank that reimburses ATM fees.
Excessive Transaction Fees
The federal limit for withdrawals on your savings account is six free withdrawals per month. While this law was lifted back in 2020, some banks still impose this limit on certain accounts. If you exceed this limit, you’ll likely be charged a fee for any additional transactions.
How To Avoid This Fee
If you have a bank account that imposes a transaction limit, you’ll first want to figure out what types of transactions are limited. For example, some savings accounts only have limited external transfers or payments but you have unlimited ATM withdrawals. Make sure to stay under the monthly transaction limit on those types of transactions to avoid a fee.
Overdraft Fee
You may incur overdraft fees if you spend or withdraw more money than you have in your account. Overdraft fees can be as high as $40 at some banks and you may get hit with several at once if you have multiple transactions that process at the same time.
How To Avoid This Fee
Even if you watch your balance closely, overdrafts can still happen. However, many banks offer an overdraft protection service to save you from those fees. To take advantage of the service, you link up another account — often a savings account — to your checking account. The bank will automatically transfer enough to cover any overages. Some banks, like Ally Bank, offer this transfer service at no additional cost, while others charge a smaller fee than the overdraft fee.
Wire Transfer Fee
Wire transfers are a quick and convenient way to send or receive money but you’ll often be charged a service fee for them. Some banks only charge for international transfers but others also charge a fee for domestic wire transfers. These fees can range from $25 to $50 or more, depending on who you bank with.
How To Avoid This Fee
To avoid these fees, you can set up direct deposit or use a regular ACH transfer that will clear in a few business days without charging you a fee. You may also be able to use a payment service like Zelle if your bank supports it without paying any fees.
Insufficient Funds Fee
While some transactions cause your account balance to go negative and are covered temporarily by your bank, some payments are simply declined due to insufficient funds — known as “NSF fees.” These fees can add up quickly especially if you have several transactions declined within a few days.
How To Avoid This Fee
The only way to avoid these fees is to ensure you have the money in the bank for your transactions to clear. Setting up low balance alerts can help but also consider having an emergency fund in place to be able to transfer over funds if you’re running low.
Checkbook Fee
Most checking accounts offer a free checkbook when you first sign up. But some banks will charge when you order additional checks which can cost up to $20 or more. You’ll also pay more for customized checks.
How To Avoid This Fee
Some banks will offer free checks if you set up direct deposit to your account or maintain a certain minimum balance. And choose a plain checkbook instead of a custom design to pay less or avoid the fee altogether.
Expedited Card Shipping Fee
When you first open a bank account or credit card with a bank, your card is usually sent in the mail. But if you need the card sooner, you might have to pay for expedited shipping. This is also the case if you lose your card and need to order a replacement.
How To Avoid This Fee
If you have the ability to avoid rushing the shipping on your debit or credit card, you won’t usually have to pay any shipping fees. And if you have a backup payment method available such as a payment app, you can also avoid expedited shipping on a replacement card.
Foreign Transaction Fee
Foreign transaction fees are charged when you make purchases or withdraw cash in a foreign currency. These fees can range from 1% to 3% of the transaction amount, adding up quickly if you’re traveling abroad.
How To Avoid This Fee
Most bank accounts charge foreign transaction fees — but not all. If you plan on traveling internationally and need access to cash, using an account like Schwab Investor Checking will waive all foreign transaction fees and ATM fees when traveling abroad. And there are also many credit cards that don’t charge any foreign transaction fees when traveling.
Paper Statement Fee
Paper is expensive and bad for the environment. Electronic statements can be much more convenient than paper copies. Many banks charge extra if you want paper statements. For example, Bank of America charges $5 each for statement copies.
How To Avoid This Fee
You can avoid this type of charge by signing up for electronic delivery and viewing your statements online. If you need hard copies, you can download and print them yourself.
Final Take
Though you should plan for common bank fees, there is no reason you have to consistently pay them if you know how to avoid them. Some banks even offer no-fee accounts to help you keep more of your money. Often, these accounts don’t charge fees for bill pay, ATM usage or other services.
FAQ
Here are the answers to some of the most frequently asked questions about bank fees.- What are common bank fees?
- Common bank fees include, but are not limited to, service fees, maintenance fees, excessive transaction fees or overdraft fees.
- What is a monthly bank fee?
- A monthly bank fee, often referred to as a maintenance or service fee is a charge you incur for using this account. This can typically be avoided if you maintain the required minimum balance of that account each month.
- What are ways to avoid paying bank fees?
- There are many ways to avoid paying bank fees including the following:
- Set up direct deposit
- Maintain the required minimum balance
- Use your bank's ATMs
- Track your spending habits
- Sign up for overdraft protection
- Enroll in paperless statements
- There are many ways to avoid paying bank fees including the following:
Scott Jeffries and Caitlyn Moorhead contributed to the reporting for this article.
Data is accurate as of July 17, 2024, and is subject to change.
Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.
Editorial Note: This content is not provided by Chase. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by Chase.
