![]() “Oftentimes fees are automatically deducted from your account many times before you notice you even owe them,” said Scott Wunder, certified financial accountant and chief investment officer at Acorns. Strategies to avoid checking account fees Understanding why banks charge fees can help you make an informed decision about which account is best for you and, possibly, prompt you to look for free alternatives. For example, overdraft fees can discourage customers from spending more than their account balance, while minimum balance fees encourage customers to maintain a certain level of funds in their accounts. “Banks are businesses and, just like any other business, they need to make money to stay afloat,” said Peter Pailon, certified financial planner (CFP) and president of Master Plan Advisory.įees are also a way for banks to incentivize certain behaviors or discourage certain transactions. The good news is that consumers can avoid these charges with a bit of planning and strategizing.īanks are in the business of earning a profit, and charging fees is one easy way to accomplish that goal. Check and card ordering fee: When you need more checks or lose your debit or ATM card, it may cost you a nominal amount, such as $5, to get a refill or replacement.This fee is intended to discourage frequent account switching and can cost between $5 and $25. Account closing fee: Some banks may impose a fee when you close your checking account, especially if it’s been open for only a short period.Wire transfer fee: Incoming domestic wire transfers tend to be free, but incoming foreign wires and all outgoing wires typically have a fee, which can range between $10 and $50.Bank charges $2 monthly paper statement fees unless you’re 65 or older. ![]() Electronic statements don’t require paper or postage. Paper statement fee: Some banks charge fees if you opt out of electronic statements and request paper ones instead.For instance, Bank of America charges $5 for foreign ATM transactions, plus a 3% fee for currency conversion (and you’ll may still have to pay a fee to the ATM’s operator company). Foreign transaction fees : Banks may charge you for using your debit card abroad whether you withdraw money from a foreign ATM or swipe to pay at a foreign point-of-sale transaction.This fee can increase when you’re outside the U.S. For example, Bank of America and Citibank charge $2.50. ATM fee: Many banks charge fees if you use an ATM that isn’t in its network.Non-sufficient funds (NSF) fee: If there isn’t enough money in your account to cover a charge and the bank doesn’t allow the transaction to go through, you can still get hit with an NSF fee, which averages around $34.Overdraft fee: If you spend more money than you have in your account and the bank allows the charge to go through, resulting in a negative balance, you must not only make up the difference, but, typically, also pay a fee.It’s typically under $15 and some banks may waive this fee if you meet requirements, such as maintaining a minimum balance. Monthly maintenance fee: Also called a service fee, this is the monthly cost of keeping your account open.Here are some of the most commons charges you’ll encounter: The nation’s biggest banks – Chase, Wells Fargo and Bank of America – were the biggest beneficiaries. To wit: non-sufficient funds and overdraft fees resulted in $15.5 billion in revenue in 2019 alone, according to the CFPB. What fees do checking accounts have?īanks rely on checking account fees for their profits. There are ways to avoid these costs, including signing up for a checking account that either has few fees or has fee waiver requirements that you can easily meet, but you need to be cognizant of the required steps so you don’t give the bank any more of your cash than you need to. But most come with various costs that can quickly add up. Checking accounts are a great tool for day-to-day money management.
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