If you’re ready to open a deposit account so you can sock money away and make a variety of transactions, you have three options: a bank, which is a for-profit business, its nonprofit cousin, a credit union, or an online deposit account.
Each provides essential services, including savings and checking accounts. While some of their features are free, others aren’t. And you may be charged extra for not following the rules. It’s always a wise idea to know the fees you’ll be charged since a few of them can be avoided.
Here are 15 fees associated with bank accounts. Some are more common than others, but all are possible.
1. Monthly Fee
This is sometimes called a service fee, and it’s what the financial institution may charge you to maintain the account. This fee, if imposed, is usually around $5 deducted monthly.
2. Minimum Balance Penalty Fee
In lieu of a monthly maintenance fee, your bank may require you to maintain a minimum balance instead. If your account balance drops below that amount, you may be hit with the fee that you would have been charged to maintain the account.
3. Paper Check Fee
Some businesses still take or even require paper checks. For example, if you are a renter, you may have to mail a check for the rent to your landlord. Depending on your checking account, you may have to buy the checks.
The average cost is 30 cents each, so a pack of 50 would be $15, not including the cost of shipping.
4. Out-of-Network ATM Fee
Your bank or credit union won’t charge you a fee to use one of their branded ATMs, but if you stray to another financial institution’s machine, you will pay for the convenience. To withdraw money from an out-of-network ATM, prepare for a fee of $1 to $2.50 to be deducted from your account.
5. Excessive Transactions Fee
Savings accounts are great because they allow you to safely squirrel money away for the future. But they have different rules than those for checking accounts regarding transactions. Before 2020, the federal limit for savings accounts was six free withdrawals and monthly transfers, but that limit has since been suspended due to the pandemic. Yet banks can still impose savings withdrawal limits and charge you a fee of $5 to $30 for each transaction that exceeds the limit.
6. Overdraft Fee
Oops, you spent more money in your checking or savings account than what was available. The financial institution stepped in and covered the difference. Now what? A fee, of course.
The fee amount depends on your bank or credit union, but it’s often somewhere around $30 for each overdraft.
7. Insufficient Funds Fee
And then there is the penalty for writing checks over the amount of money in your account. In that circumstance, most banks and many credit unions will charge you an insufficient funds fee of between $10 to $35.
8. Wire Transfer Fee
Want to send cash to somebody by wire? You can, but it’ll cost you. Wire transfer fees can go as high as $35 to send the funds within the country and up to $50 if you are sending funds internationally.
9. Early Account Closure Fee
When you open a savings or checking account, you are entering into a contract, and both parties have different agreed-upon expectations. The financial institution may require you to keep the deposit account open for a certain number of months.
If you close the account before that time, you could face a fee, which is generally $25.
10. Foreign Transaction Fee
Finally taking that fabulous overseas vacation? Marvelous! But prepare for foreign transaction fees when you use your debit card for transactions, including withdrawing cash from ATMs. The fees are typically 1% to 3% of the purchase price or withdrawal amount.
11. Mobile Deposit Fee
There is no need to go to an ATM to make a check or cash deposit anymore. You can do it with your phone. Most financial institutions provide this service for free, but not all. A few will charge $.50 per transaction, and if you make a lot of deposits, those fees can add up.
12. Card Replacement Fee
If you lose your debit or ATM card, the bank, credit union, or online account provider can send you a new card, but it may cost you. Some will charge you a fee of $5 or so to send you a replacement card.
Most account providers allow you to easily request a new card online.
13. Stop Payment Fee
You wrote a personal check to pay for a coffee maker you bought from an online community platform. The seller promised it was never used, but when you opened the box, you found evidence to the contrary, and now the guy isn’t answering your calls. You can prevent the transaction from going through by asking your financial institution to place a stop payment on the check. But beware: You’ll probably be charged a fee of $15 to $35 to do so.
14. Paper Statement Fee
With the advent of the internet, financial institutions took advantage of the opportunity to provide real-time activity and account statements to their customers online and for free. But if you still prefer to have a paper statement mailed to you, it may cost you. Each financial institution has its own policy, but $2 per paper statement is not an uncommon fee.
15. Account Inactivity Fee
Use it or lose it, warn some financial institutions. If yours imposes a dormancy fee, prepare for a $5 to $20 charge.
How long before an account inactivity fee is added varies, but it could be between a few months to a year.
How to Avoid Many of the Fees
Your first step to keeping costs down is to work with a financial institution that charges few fees for everyday transactions and account management services. Visit the online servicer, bank, or credit union’s website and review the terms. If you have any questions, give them a call.
The second step is to treat the money that’s deposited into your account responsibly. Maintain the minimum balance if there is one, and always know how much money you have in your account before withdrawing funds or writing a check to avoid overdraft and insufficient funds fees.
Many accounts will waive the monthly fee if you set up direct deposits to the account.
And lastly, remember that banks, credit unions, and financial service providers are businesses. The fees they charge go to ensure that you can use the accounts securely and to your advantage. If they didn’t make money, they wouldn’t exist.