If you look at your bank statement every month (which you should be), then you might see certain charges or fees that your bank has assessed you. Maybe you dispute the fees, maybe you accept them, but are you understanding why you are getting these fees? The CGS Team is going to give you the complete lowdown on 6 common bank fees, and certain ways to avoid some of them. Even if the fee is only a couple of dollars, if the opportunity to save that money presents itself, then it would be silly not to take it!
The most common bank fees are...
Account Maintenance Fees
Most checking and savings account come with maintenance fees. Most of the time, this fee can be waived if you meet certain requirements. For example, Wells Fargo requires a minimum balance of $1500, or a monthly direct deposit amount of $250 and a monthly transfer into savings of $25.
If any of the requirements aren’t met, you can be charged a monthly fee that ranges from $3 to $30, depending on the type of account you have. The best way to avoid this fee is to meet your banks requirements. If you notice monthly maintenance charges, call or go into your bank and see how to fix that.
Sometimes you may forget what balance you have in your account and swipe your debit card with too little money in your account. If the payment goes through, a few things take place. If you have an overdraft protection feature on your account, your bank may transfer money from your savings to make up the difference.
Next thing that happens is you being assessed a fee. The typical overdraft fee amount is $35, on top of you covering any negative balances in your account. With Wells Fargo, if you have overdraft protection and money is transferred from your savings, they only charge a $10 overdraft fee. If you never overdraft your account and truly made a mistake, your bank may be able to waive or discount the fee, so give them a call!
When you use an ATM from a bank other than your normal bank, you are charged a fee. The unfortunate thing about this is that you could be charged with double fees. You will be charged a fee from your bank for using an outside ATM, and you may be charged a fee from the ATM provider.
There’s no escaping this when you are using ATMs in casinos or ATMs that aren’t provided by a major bank. The only way to avoid these fees is to use an ATM provided by your bank. If you have a credit union, you won’t be charged by your bank to use outside ATMs, but you will be charged a fee from the ATM provider.
Insufficient Funds Fees
Insufficient Funds fees are similar to overdraft fees in the sense that they can also cost $35 and they take place when you attempt to spend money that you don’t have in your account. The key difference of an insufficient fund fee is that the payment may not go through.
Your transaction could be immediately declined and the bank will still charge you a fee for attempting to spend money that you don’t have. If the charge does go through and you don’t have any overdraft protection, an insufficient funds fee will be assessed.
Wire Transfer Fees
While wire transfers aren’t as common among personal accounts, they can still come with a hefty fee. Regardless if you are transferring money internationally or domestically, the standard fee amount is over $20.
If you are paying off a loan and a wire transfer is the only option, then you may have to suck it up. However, if you are planning on wiring money to another bank, consider going in to the bank to deposit a cashier’s check or money order.
Excess Transaction Fees
FDIC (the federally mandated commission that insures your money) created a requirement that a savings account cannot exceed 6 transfers or withdrawals in a given month. Once you surpass the 6 transfers or withdrawals, you can be hit with fees as high as $25.
If you continue this activity on a consistent basis, the bank can turn that savings account into a checking account (without your permission) to make sure they stay in compliance with the FDIC. We all have to tap into savings at some point in time, so if you do so, make sure you withdraw enough to last you for the month.
Related: Banking Basics: Options for You.
Being knowledgeable about what your bank charges can help ensure you aren’t spending unnecessary money. You can prevent most, if not all, of the fees listed above by being on top of your finances. Have you been hit with any of the fees listed above? What do you do to stay in compliance with your account? We’d love to hear your stories about avoiding bank fees, so leave a comment below and let’s chat!