Personal Finance

10 Costly Bank Fees That Are Draining Your Account

If your checking or savings account balance isn’t as high as you’d like it to be, overspending may not be the problem. It could be that your bank is gouging you with hefty fees every month. Some of these fees are obvious while others are more stealthy but either way, they could be costing you valuable dollars and sense. If you’re ready to plug the money leaks in your bank account, here are 10 pricey fees to watch out for.

1. Minimum balance fee
One of the ways banks are able to charge customers fees is by imposing a minimum balance requirement on your account. In other words, if your balance falls below the threshold set by the bank, you’ll be charged a fee. Typically, you have to maintain the minimum balance on a daily basis to get around paying it.

2. Monthly maintenance fee
On top of charging minimum balance fees, some banks charge a monthly maintenance fee just to have an account. The way to avoid this fee may involve meeting certain requirements, such as having a direct deposit into your account, writing a set number of checks or maintaining a combined minimum balance between your checking, savings or money market accounts.

3. Overdraft fee
Running your checking account into the red can cost you some serious cash if you get hit with an overdraft fee. What’s worse is that some banks charge multiple overdraft fees in one day when you don’t have enough money to cover your transactions. A $5 overage can turn into $100+ if your bank decides to pile on the fees so it pays to stay on top of what you’re spending.

4. Nonsufficient funds fee
In addition to an overdraft fee, your bank can also hit you with a nonsufficient funds fee if an item is returned. If you write a check for $20 and you only have $15 in your account, you could end up paying both the overdraft fee and the nonsufficient funds fee, which is a double whammy for your bottom line.

5. Returned deposit fee
By now, you understand that you can be charged a fee if you write a check that bounces but you may not know that you can also be penalized if you deposit a check that’s returned. The fees can be compounded if you write checks against the bad check which end up getting returned as well.

6. Inactivity fee
When you open a checking or savings account, your bank expects you to put it to good use. If your account sits dormant, with no money coming in or going out, the bank could charge an inactivity fee. In the worst-case scenario, the bank could close your account down altogether. You won’t lose the money you had in the account but you’ll have to wait on a paper check to come in the mail to get it back.

7. Account closure fee
Closing down an account you’re not using may not seem like a big deal but if you do it too soon after you opened the account, the bank may raise an eyebrow. Some banks stipulate that you have to leave your account open for 60, 90 or 180 days before you can shut it down without incurring a fee.

8. Paper statement fee
In the digital age, paper statements are quickly becoming obsolete. If you prefer getting your statements in the mail or having them printed out at the bank instead of being delivered electronically, you’ve got that option but you need to be prepared to pay for it.

9. Human teller fee
Once again, technology is streamlining many of the functions bank perform. Tellerless banks are one of the latest innovations in the financial services industry. If you want to talk to a teller in-person, or you need to chat with a customer service rep to address an issue with your account, your bank may tack on a fee for their time.

10. Excess withdrawal fee
Savings accounts aren’t designed to be used the same way as checking accounts. Federal Regulation D limits you to six withdrawals per month from a savings account. If you go over that number, your bank can charge you a fee for exceeding the limit. If you make too many withdrawals from a savings account month after month, the bank could convert your savings to a checking account instead.

What’s the best way to avoid stiff bank fees?
Bank fees can leave you feeling broke if you’re not paying attention. If you want to get around paying these fees, here are a few helpful tips to help you hang on to more of your cash:

  • Read the fine print. If you’re clueless about which fees your bank charges, it’s time to dig out your account agreement and review the details. Look for the fee schedule to see which fees are associated with your account and when the bank can add those on.
  • Set up account alerts. A good way to avoid minimum balance, overdraft and nonsufficient funds fees is by using account alerts to your advantage. Setting up an alert so you know when your account balance reaches a certain limit allows you to transfer money from your savings or make a deposit so you can avoid a fee.
  • Get comfortable with online banking. If your bank offers online or mobile banking, that can be a valuable tool for heading off expensive fees. Using your bank’s live chat feature, for example, may allow you to dodge a human teller fee. At the same time, you can use your online or mobile access to monitor your deposits and debits so you can keep an eye on potential trouble spots.
  • Consider making a move to an online bank. Online banks tend to be more fee-friendly than brick-and-mortar banks because they have fewer overhead costs to pass on to their customers. If you don’t mind not having access to a branch, switching to an online bank could eliminate a lot of bank fee headaches.

Have you caught a costly fee on your account? Let us know!

About the author

Rebecca Lake

Rebecca Lake is a personal finance writer and blogger specializing in topics related to mortgages, retirement and business credit. Her work has appeared in a variety of outlets around the web, including Smart Asset and Money Crashers. You can find her on Twitter at @seemomwrite or her website,

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