How to Avoid Bank Fees and Keep More of Your Money
Bank fees can eat away at your hard-earned money, but with the right strategies, you can avoid them altogether. Here’s how to identify and eliminate common banking fees.
Common Bank Fees and How to Avoid Them
- Monthly Maintenance Fees
- Why It’s Charged: Some banks charge a fee just for holding an account.
- How to Avoid: Look for banks offering no-fee accounts or waive the fee by meeting balance requirements or setting up direct deposits.
- Overdraft Fees
- Why It’s Charged: Occurs when you spend more than your account balance.
- How to Avoid: Enable overdraft protection or link your checking account to savings as a backup.
- ATM Fees
- Why It’s Charged: Using out-of-network ATMs often incurs fees from both your bank and the ATM provider.
- How to Avoid: Use your bank’s ATM network or switch to a bank that reimburses out-of-network fees.
- Wire Transfer Fees
- Why It’s Charged: Banks charge for domestic and international wire transfers.
- How to Avoid: Explore free alternatives like Zelle or PayPal for domestic transfers or Wise for international ones.
- Minimum Balance Fees
- Why It’s Charged: Falling below a set balance can trigger fees.
- How to Avoid: Opt for accounts with no minimum balance requirements.
Real-Life Example: The Cost of Fees
Let’s say you pay the following fees in a year:
- $12/month maintenance fee: $144/year
- 5 overdraft fees at $35 each: $175/year
- 10 out-of-network ATM fees at $3 each: $30/year
Total Fees: $349/year.
By switching to a no-fee bank and avoiding overdrafts, you could save hundreds annually.
Tips to Stay Fee-Free
- Read the Fine Print
Understand your bank’s fee schedule to know what charges to watch out for. - Monitor Your Accounts
Regularly check your balances and transactions to avoid overdrafts or unexpected fees. - Use Online Banks
Many online banks offer fee-free accounts with high interest rates on savings. - Switch Banks If Necessary
If your current bank charges excessive fees, consider switching to a competitor with better terms.
Final Thought
Bank fees are often avoidable with a little planning and awareness. By choosing the right account and adopting smart habits, you can keep more of your money working for you.