Bank accounts can be a safe way for you to manage your money: growing it in savings accounts and spending it with checking accounts.
To offer these services and make a profit, banks often charge various fees for maintaining those accounts. Some of these fees apply regardless of what actions (or inactions) you take while others can be avoided with some financial finesse.
The whole point of opening a bank account is to be smarter with your money, so the last thing you want is an unexpected bank fee that eats away at your earnings. We’ve broken down what these bank fees are and how to avoid them.
And remember: Banks are competing with each other for your business, so if you find your bank is charging you too many fees — and perhaps some of them seem unfair — you can shop around for a new account.
It’s impossible to find a financial institution that offers no banking fees, but you can certainly find one that fits better with your financial goals. Here’s how to choose a bank account based on your needs.
1. Monthly Maintenance Fees
This is one of the most common bank fees. Many banks and credit unions charge a monthly maintenance fee just for you to keep your savings or checking account open.
The good news: Because of lower overhead costs, online banks typically offer fewer fees, and you can find many online banks without any monthly maintenance fees. As online banks increasingly grow in popularity, traditional brick-and-mortar banks will have to adapt to keep up—which could mean dropping monthly account fees, among others.
Online banks typically offer fewer fees overall and also offer higher interest rates. Here are 12 of the best online banks for checking and savings accounts this year.
How to avoid monthly maintenance fees: Many banks and credit unions offer conditions for avoiding this fee, such as a minimum number of monthly direct deposits, keeping a high minimum balance or using a debit card to spend a certain amount. Some banks simply charge it regardless.
The best way to avoid this monthly fee is to find a bank that either doesn’t charge it at all or makes it easy for you to avoid, given your banking habits.
2. Minimum Balance Fees
Some banks require a minimum balance, but the amount can vary greatly. Bank accounts targeted at beginning savers, for example, might require a minimum balance of $5 (and some banks and credit unions may fund this for you upon opening) while higher-yield accounts for serious savers may require a more substantial minimum balance. Still, other banks require no minimum balance.
How to avoid minimum balance fees: If your bank charges a fee if you dip below a minimum balance, the solution is simple — just always ensure you keep that amount in the account.
If you’re concerned about meeting minimum balance requirements, search for an account with a different financial institution, but understand that might mean you need to find an account with fewer benefits (like a lower annual percentage yield).
3. Non-Sufficient Funds Fees (and Overdraft Protection Fees)
Most banks charge fees when you attempt to spend more with a debit card or check than you actually have in your checking account. For example, if you buy a new pair of shoes for $100 but only have $80 in the account, you can be charged a non-sufficient funds fee (or NSF fee) for writing a bad check or swiping your card without having enough money to cover the cost.
Some banks do not charge a fee for this, so if your checking account is regularly hovering around $0, you should make this a top criterion for a potential account.
Some banks offer overdraft protection, meaning you can designate another account (like a linked savings account) or line of credit to cover the purchase if your card would otherwise be declined (or check would otherwise bounce). However, overdraft protection typically carries its own overdraft fees, and the average is around $35, just as much as a typical NSF fee.
Banks vary in how they charge for this fee. Some banks charge only once per day for overdraft protection, so if you’re on a shopping spree and swipe your card multiple times, you’ll only be hit with that fee once. Other banks aren’t so kind; they’ll charge an overdraft fee for every purchase.
How to avoid non-sufficient funds fees: Monitor your account regularly, especially before purchases, to determine if you have enough funds for a transaction. Many banks offer text and email notifications when your account dips below a threshold that you select.
How to avoid overdraft protection fees: Overdraft protection is opt-in service, meaning you can decline it. If you can stay on top of your account balance and budget, we recommend opting out of the service to avoid potential fees. Instead, just keep an eye on your spending to avoid overdraft potential.
4. ATM Fees
ATMs are a blessing and a curse. If you’ve only got plastic in your wallet and stumble upon a shop that only accepts cash, you may need to hit up a nearby ATM to access your money. However, if that ATM is not in your bank’s or credit union’s network of ATMs, your institution may charge you a fee for the withdrawal.
How to avoid ATM fees: Plan ahead by always keeping some cash on you, especially if you are going to a new store, restaurant or event where you may encounter a cash-only situation. If you must withdraw from an ATM, find an ATM in your network.
5. Paper Statement Fees
Paper, ink and stamps all cost money, which means banks spend roughly 50 cents a month per customer to send out paper statements. With the rise of online and mobile banking, many banks have implemented paper statement fees, which they will waive if you opt for e-statements.
How to avoid paper statement fees: Log on to your bank’s website or mobile app and go to your settings to select e-statements. If your account is charging you a paper statement fee, it should be waived upon opting out of such statements.
6. Returned Deposit Fees
Banks sometimes “double dip” when it comes to non-sufficient funds. Not only does the person writing a bad check often wind up paying a fee for insufficient funds in their checking account, but you as the recipient of a bad check may face fees when going to deposit said bad check from a friend, family member or customer. (Checks also fail to clear for other reasons, such as a closed account or a stop payment.)
How to avoid returned deposit fees: Only accept checks from someone you trust to keep the account open and appropriately funded. When accepting payment from friends and family, stick to cash or a payment app like Venmo.
For business owners, alternatives like credit and debit cards may carry small fees per transaction, but they may also save you in the long run by avoiding the potential for returned deposit fees and ensuring you don’t lose out on revenue from a transaction due to a customer knowingly writing you a bad check.
Alternatively, you can require a cashier’s check (more on this below) instead of a regular check; we recommend requiring a cashier’s check for large sales, like when you privately sell your car.
7. Foreign Transaction Fees
Some banks charge foreign transaction fees for using your debit or credit card at a merchant in another country that uses a different currency or at a foreign ATM when withdrawing cash in the local denomination. Typical fees average about 3% of the transaction.
How to avoid foreign transaction fees: If traveling abroad, prepare in advance by exchanging some of your money for the foreign currency you will need at your bank or credit union. Frequent travelers should find a bank that offers a credit or debit card with no foreign transaction fees.
8. Lost Card Fees
If you lose your wallet, purse or the card itself, you’ll need to freeze your debit and credit card until you find it. And if you can’t find it, you’ll ultimately need to order a replacement card. Some banks charge a replacement fee, and if you need the card ASAP, you’ll pay an additional fee for rush shipping.
How to avoid lost card fees: This is easier said than done, but… don’t lose your cards. If you are a person who frequently misplaces items, have a backup card stashed at home in a fire safe that you can use until your new card arrives. If nothing else, it will help you avoid rush shipping.
9. Check Fees (and Cashier’s Check Fees)
When you open a checking account, your bank or credit union will typically supply you with your first batch of checks. Some banks will supply you with an annual amount at no cost. But if you’re a regular check writer and you burn through your allotted amount, you may have to pay a fee to order more.
In addition, banks charge a flat rate to provide a cashier’s check. Some vendors may require you to pay with a cashier’s check as assurance that the check will actually clear. On average, cashier’s checks cost around $9.
How to avoid check fees: Only use checks when there are no alternative payment methods. For example, save paper and stamps and avoid the potential for check fees by opting for auto-payments for mortgage and rent, utilities, loan payments and other recurring bills.
How to avoid cashier’s check fees: If the merchant or person from whom you are purchasing requires a cashier’s check, there’s no way around this fee.
10. Wire Transfer Fees
Banks typically charge for outgoing wire transfers — an easy, quick way to send someone money almost immediately — and sometimes even charge for incoming wire transfers (meaning you, as the recipient, would pay a fee). These are not insignificant: Outgoing wire transfer fees average about $30 while incoming wire transfer fees hover around $15.
How to avoid wire transfer fees: Cash apps like Venmo allow you to freely send money to and from friends and family. There is typically a waiting period for the money to be transferred from your app to the bank, but you can pay a small fee for immediate access. Determine if this fee would be cheaper than a wire transfer, and use when appropriate.
11. Inactivity Fees
A good bank will not charge this fee, which applies to checking or savings accounts that sit inactive for a set amount of time. However, some banks will debit your account a set amount (typically $10) after a specified period of dormancy (typically six months).
How to avoid inactivity fees: Make sure to regularly use your account, whether it’s swiping your debit card for a pack of gum or setting up direct deposit into your savings account.
Ultimately, find a bank that doesn’t charge this fee, as it’s likely a sign you’ll find other things frustrating about this financial institution.
12. Account Closing Fees
Some banks will also charge a fee for closing your account. Typically, this only occurs if the account has only been open for a short period of time, usually less than six months. Banks that offer sign-on bonuses may implement such a fee to ensure customers don’t close their account immediately after earning the bonus.
How to avoid account closing fees: Keep your account open for the minimum required amount of time to avoid paying such a fee.
Timothy Moore is a market research editing and graphic design manager and a freelance writer covering topics on personal finance, careers, education, pet care and automotive. He has worked in the field since 2012 and has been featured on sites like Codetic, Debt.com, Ladders, Glassdoor and The News Wheel. He lives in Ohio with his partner and their three-legged dog.