As we all know, an important source of profits for banks are the fees that they charge. You may think that everyone pays fees to their bank. However, this is not the case because according to the American Bankers Association (ABA), the majority of American consumers don’t pay any fees to their bank at all!
There are quite a few things that you can do to avoid these fees. If you are one of the few who are paying bank fees, continue reading on below to find out what they are and how to stop paying for them!
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Table of Contents
1. Maintenance Fees
Some banks will charge a fee just to have an account open with them. These monthly maintenance fees are an automatic feature, and cost between $5 and $20 per month, depending on where you bank and what services you sign up for.
For most, that kind of fee will destroy any interest you earn throughout the year, and you might even have a hard time keeping your account balance above zero. Luckily for you, maintenance fees are relatively easy to avoid. You can either use a bank that does not charge maintenance fees or qualify for a fee waiver so that the fees don’t get charged.
2. Overdraft and Insufficient Funds
Overdraft charges and fees for insufficient funds can cost as much, if not more, than maintenance charges in a year. Whenever your account balance runs low, you might have to start paying these fees. Overdraft fees cost around $35 per failed transaction. Fortunately, overdraft fees are optional.
Banks used to sign you up for overdraft protection automatically, but now you need to opt-in for the service. To help get rid of this fee, all you have to do is opt out and keep enough money in your account at all times. It’s understandable that you might not be able to keep your balance up at all times but it is definitely a good idea to keep track of your account balance.
3. ATM Fees
ATM fees are among the most inconvenient bank fees. What’s with the idea of paying money to get their own money from an ATM. These fees can easily add up to 5% or 10% of your total withdrawal. If you use ATMs frequently, you can avoid this fee by using ATMs that are owned or affiliated by your bank. You won’t pay your bank’s “foreign” ATM fee, nor will you pay an additional fee to the ATM operator.
4. Additional Fees
Early Withdrawal Penalties: Certificates of deposit, also known as CD’s, often pay higher interest rates than savings accounts. You need to commit to leaving your money in the account for a long time. If you pull out early, you’ll pay a penalty. To save that money, set up a CD ladder so that you’ve always got some cash coming free or use a liquid CD that allows for early withdrawals.
With the CIT Bank No-Penalty 11-Month CD:
• Earn 0.35% APY on your funds with just a $1,000 minimum deposit.
• The perfect balance between a great fixed rate and flexible money access.
• Access funds, if needed. No penalty.
• No opening or maintenance fees
• Shorter 11-month timeframe and a great APY
• If you need your funds prior to the maturity date, you can withdraw your money — including any interest earned — beginning seven days after the funds have been received. No penalty. No problem. It's the security of a CD with the flexibility to access your funds early if you need them.
Wire Transfers: Wire transfers are great for sending money quickly, but they’re not cheap. If you don’t really need to send a wire, find a less expensive way to send funds electronically.
Account Closing Fee: Banks charge you when you close an account shortly after opening it. If you’ve changed your mind about a bank, try waiting at least three to six months before closing your account to avoid fees.
Excess Transfers: Some accounts limit the number of transactions allowed per month. Money market accounts, which offer some of the benefits of both checking and savings accounts, might limit you to three withdrawals per month. Savings accounts, due to Regulation D, limit certain types of withdrawals to six per month. If you’re going to spend money from those accounts, plan ahead and move the money to your checking account in larger chunks.
Tired of paying those pesky bank fees? We have spotted some unnecessary fees that you might be getting charged when you could avoid them easily. Save a bit of money by following the few steps listed above! If you are interested in this sort of stuff and want to know more, feel free to check out our Bank Bonuses, Saving Rates and Credit Card Bonuses!