Hailey Johnson
Bank fees are a common occurrence, with many banks charging for services such as wire transfers, overdrafts, and ATM withdrawals. While some fees are unavoidable, there are ways to minimize or avoid them altogether. For example, some banks offer free transactions or rebates for using out-of-network ATMs, while others provide overdraft protection by linking to a savings account. Additionally, maintaining a minimum balance or having multiple accounts with the same bank may result in waived fees. Bank fees can add up, especially when living on a tight budget, so it is important to be aware of the charges and take steps to reduce them.
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Foreign transaction fees
To avoid foreign transaction fees, it is advisable to use a credit card that does not charge these fees, such as the Chase Sapphire Preferred® Card, Bank of America® Travel Rewards Credit Card, or the Capital One Venture Rewards Credit Card. Additionally, some banks offer debit cards without foreign transaction fees and may have partnerships with international banks, allowing their customers to use their ATMs without incurring fees. When planning a trip, it is beneficial to research and compare different credit cards to find those with the most favourable fees and rewards.
It is worth noting that foreign transaction fees can add up over an extended trip. For example, a 3% foreign transaction fee on $5,000 spent during a month-long trip to Europe would result in an extra $150 in fees. Therefore, being mindful of these fees and choosing the right credit card can help travellers save money.
While banks are required to be transparent about their fees, it is always a good idea to check with your bank about any potential foreign transaction fees and explore options to minimise these charges. Some banks may have partnerships with local banks in the country you plan to visit, which can help reduce fees. Additionally, consider setting up low-balance alerts to avoid overdraft fees when travelling.
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Monthly fees
Banks may charge monthly maintenance fees for having a savings, checking, or money market account. However, they may waive these fees if you meet certain requirements such as maintaining a minimum balance or setting up a direct deposit. For example, Bank of America offers a monthly maintenance fee waiver for qualifying direct deposits such as regular monthly income deposited into your account using the account and routing numbers you provided.
Some banks offer free checking accounts with no monthly fees and no minimum balance requirements. Credit unions are also known to offer free checking accounts. However, some banks may charge a monthly fee for premium accounts with additional benefits such as overdraft fee refunds, outside ATM fee refunds, and free checks.
Overdraft fees are another common type of monthly fee. These fees are charged when a transaction exceeds the available balance in your account, and the bank covers the shortfall rather than declining payment. Overdraft fees typically range from $25 to $35 per occurrence and can accumulate quickly if multiple transactions are processed before the account is replenished. Some banks also charge for overdraft protection, which transfers funds from a linked savings account or line of credit to cover overdrafts.
Using an out-of-network ATM can also result in monthly fees. Both the bank and the ATM operator may levy fees, leading to double charges for a single transaction. To avoid these charges, consider using in-network ATMs or choosing a bank with a large network of ATMs.
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Wire transfer fees
The fee for a wire transfer can also depend on the amount being sent and whether the transfer is recurring. Some banks may offer discounts for recurring transfers or for sending wires online without assistance. Additionally, some banks may charge a higher fee if a teller helps process the transfer. International transfers may also be cheaper if sent in the local denomination instead of US dollars. For example, sending an international wire transfer in US dollars with Chase may cost $40, while sending it in the foreign currency may only cost $5.
To avoid high wire transfer fees, consumers can consider using non-bank options such as PayPal, Venmo, Wise, Zelle, or Cash App. These services often charge lower fees and offer better exchange rates than banks. However, they may have limitations on the amount that can be sent. Another option to avoid fees is to use ACH transfers, which are usually free but can take several days for the transfer to be completed.
It is important to note that wire transfer fees may be negotiable for private banking clients or businesses, depending on the relationship with the bank. Therefore, it is recommended to shop around for an account that charges low fees for wire transfers, especially if they are frequently used. Additionally, some banks may waive wire transfer fees for certain account types, such as student bank accounts.
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Paper check fees
Some checking accounts will only allow a set number of checks per month, and if you exceed this limit, you will be charged a fee for each additional check. This is not limited to paper checks, as some banks will also charge for electronic transfers over a certain number per month.
There are also fees associated with cashier's checks, which are used for major transactions such as a down payment on a home or buying a car from a private party. The bank guarantees payment using their own funds, and a small fee is typically charged for this service.
Recipients of paper checks without bank accounts may have to pay fees to cash them, and using ATMs that are not affiliated with your bank can also lead to charges from the ATM provider and your bank.
While paper checks are becoming less common, there are still situations in which they are useful. For example, when paying someone who does not use payment apps, or when paying small businesses or charitable organizations that may not accept card payments or that prefer checks to avoid card processing fees.
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ATM fees
There are several ways to avoid ATM fees. One simple way is to use only ATMs within your bank's network. Many banks offer ATM locators on their website or mobile app to help you find nearby in-network machines. Some banks also partner with networks like MoneyPass, Allpoint, or the Global ATM Alliance, giving you access to thousands of fee-free ATMs. Check your debit card or ask your bank to see if you're covered.
Another way to avoid ATM fees is to get cash back at checkout. When making a purchase with your debit card at a grocery or retail store, choose the cash-back option. This allows you to get cash without any ATM fee. Withdrawing larger amounts at once is another way to reduce the frequency of ATM fees. If you must use an ATM that charges a fee, consider withdrawing more money at one time.
Some banks also offer accounts with no ATM fees. For example, Citi offers account holders access to more than 60,000 fee-free domestic ATMs and waives out-of-network ATM fees for Citi Priority Accounts and Citigold/Citigold Private Client. Capital One offers free access to 70,000 Capital One, MoneyPass, and Allpoint ATMs. Charles Schwab Bank offers unlimited ATM fee reimbursements worldwide and does not charge its own ATM fees.
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Frequently asked questions
There are several ways to avoid bank fees, including:
- Keeping a certain minimum balance in your account
- Having multiple accounts with the same bank
- Using in-network ATMs
- Using your checking account for routine withdrawals
- Signing up for overdraft protection by linking your checking account to your savings account
- Keeping tabs on your accounts and signing up for low-balance alerts
- Using online banking or a person-to-person transfer via your bank's app for money transfers
Common bank fees include:
- Monthly maintenance/service fees
- Out-of-network ATM fees
- Excessive transaction fees
- Overdraft fees
- Insufficient funds fees
- Wire transfer fees
- Early account closing fees
- Foreign transaction fees
- Check fees
No, not all banks charge fees. The banks with the lowest fees are typically online-only banks, as they don't have the same overhead costs as brick-and-mortar banks. Additionally, some banks may waive certain fees if you meet certain requirements, such as maintaining a minimum balance or having multiple accounts with them.
