Banks simplify the way you handle your money and make bill paying easy, but they charge fees for many services. A bank may charge you for using an ATM, for using a human teller or even when you deposit someone else's bad check. Fees could very well eat up any money you accrue in an interest-bearing checking account. However, there are several ways to save money by avoiding bank fees.
Be Cautious of Overdraft Fees
Banks will nail you for large fees if you write checks on an overdrawn account. But the overdraft charge – usually more than $30 per check – is just part of the story. If you don't pay the overdraft and bank charge within a few days, the bank might add another "sustained overdraft" fee.
In addition, banks can allow payment for larger checks and let smaller ones overdraw, bringing in additional fees. It's maddening enough if your paycheck bounces, but some banks will charge you a fee for depositing that check.
Avoid ATM Fees
Unless you take money out of your own bank's ATM, expect to pay some fees. Often both banks – yours and the one that owns that machine – will charge you for using it. If this is a problem and you need cash, save that for when you go grocery shopping.
By asking for additional cash above the amount of purchase, you can usually skip the ATM fees. In fact, as more merchants accept debit cards, you may find you don’t need to carry much cash at all.
Sign Up for Paperless Billing
Some banks may charge for using a teller, and most will encourage you to do all your transactions electronically. The bank may even offer cash incentives to switch over to their in-house autopay systems. However, you must watch your balance when bills are due, or the bank may go ahead with the automatic payment and stick you with an overdraft fee later. Weigh the advantages of autopay against paying your bills online with a debit card.
Read More: How to Sign Up for Automatic Bill Payments
Rethink Paper Checks
Ordering paper checks, even the generic ones, can get expensive. However, as more merchants get on board with electronic payment systems, you may find you write fewer checks. It might be worth it to not even bother ordering paper checks.
Even if you write one physical check per month – like to your landlord – consider getting some unmarked temporary checks the bank issues when you open an account. If you use your debit card or pay your bills online, you can squeeze a lot of use out of your temporary checks.
Read More: What Are ACH Transactions?
Know Your Bank's Charges
Although it may be hard to keep track of them all, it helps to know what your bank charges for services. Sometimes it's inevitable you'll be stuck with a charge on some transactions, but knowing the fee schedule will help minimize or avoid them altogether.
Most major banks, like TD Bank, make their fee schedules readily available for customers. Simply visit the bank's homepage and click on the type of account, such as checking. You should see a link from there that says "view account details." From there you'll be able to identify any monthly service fees, ATM charges, and overdraft fees.
Shop Around for a Deal
If your bank sticks you with a lot of unnecessary fees, you may want to think about switching banks. Most credit unions have free checking and more manageable fees. Citibank waives their $12 monthly service fee for customers who keep their accounts above $1,500, as well as customers who make at least one qualifying direct deposit and one qualifying bill payment per statement period. Some online banks, while not having their own ATMs, will reimburse you for any charges when you use someone else's machine.
- Citibank: Simple Checking
- TD Bank: TD Bank Checking Accounts
- MoneyRates.com. "The Latest MoneyRates.com Update on Bank Fees." Accessed April 30, 2020.
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- MyBankTracker. "Deposited Item Returned Fee Comparison at Top 10 U.S. Banks." Accessed April 30, 2020.
- MyBankTracker. "Cashier’s Check Fee Comparison at Top 10 U.S. Banks." Accessed April 30, 2020.
- MyBankTracker. "What Are Paper Statement Fees?" Accessed April 30, 2020.
- Federal Reserve. "Average Debit Card Interchange Fee by Payment Card Network." Accessed April 30, 2020.
- MyBankTracker. "Lost Debit Card Replacement Fee Comparison at Top 10 U.S. Banks." Accessed April 30, 2020.
- MyBankTracker. "Foreign ATM Fee Comparison at Top U.S. Banks." Accessed April 30, 2020.
- MyBankTracker. "Compare U.S. & International Wire Transfer Fees." Accessed April 30, 2020.
- Federal Deposit Insurance Corporation. "12 CFR 204.2(d)(2)." Accessed April 30, 2020.
- MyBankTracker. "What Happens to Inactive Bank Accounts." Accessed April 30, 2020.
- MyBankTracker. "Compare Early Account Closure Fees at the Top U.S. Banks." Accessed April 30, 2020.
Al Bondigas is an award-winning newspaperman who started writing professionally in 1985. His print credits include the "Mohave Valley Daily News" and "The Mohave County Standard." Bondigas studied journalism at San Bernardino Valley College in California.