You probably don’t spend much time thinking about bank fees, but they can add up to a significant cost over months and years. This is particularly true if you don’t know your bank’s policies and therefore don’t adjust your behavior to minimize charges.

This article will cover some of the most important fees to be aware of as a bank customer. Keep in mind that fees vary widely from one bank to another or even among individual accounts. You can avoid bank fees by making a few simple adjustments to your financial habits.

1. Overdraft Fees

Overdraft fees are one of the most common charges, and it’s easy to trigger an overdraft if you don’t pay close attention to your balance. Banks charge overdraft fees when customers spend more than they have in their account, and they can be surprisingly expensive.

Overdraft fees are a predatory practice designed to make money off the people who can least afford them. That said, it’s critical to do everything you can to avoid losing money to overdraft fees in order to keep as much of your paycheck as possible.

While overdraft fees are often mandatory with checking accounts, you have the option to opt-out of overdraft fees with a debit card. By opting out, you also stop the bank from covering for you when you don’t have money in the account, so you should consider the pros and cons of each choice.

The simplest way to avoid overdraft fees is to be aware of how much money is in your account at all times. If you’re spending a lot on overdraft fees, you can hire a bill negotiation company to negotiate down your charges and help you save more money. They’ll only take a percentage of the money you save, so there’s no risk involved.

2. Minimum Balance Fees

Like overdraft fees, minimum balance fees disproportionately affect the poor, and banks use them to extract money from people who don’t keep a certain amount of cash in their account. Minimum balance fees may also be recorded as monthly maintenance fees depending on your bank.

Again, you can typically avoid minimum balance fees by leaving the minimum in your account at all times. You should be able to find information about your bank’s minimum balance policies from your account or by calling the bank’s support number.

Before making a purchase or withdrawing cash, get in the habit of checking your balance and making sure you have enough to cover the charge. Many banks also allow you to set up notifications when your balance decreases beyond a certain threshold, giving you a warning before you drop below the minimum balance.

Be sure to check if there are any banks or credit unions in your area that don’t require a minimum balance.

3. ATM Fees

Banks generally let their customers use their ATMs for free, but you may be charged a fee when using an ATM from another provider. These fees are typically minor at around $2 to $4, but you shouldn’t underestimate the impact of consistent small charges.

ATM fees are a more important concern for people who don’t live near an ATM from their own bank. Fortunately, you should be able to find ATMs quickly through your bank’s app, helping you identify the closest no-fee ATM near your home or current location.

Furthermore, a growing number of accounts now compensate users for ATM fees, although this still isn’t standard practice. There may be certain restrictions associated with this benefit—for example, you might be limited to a certain amount of compensation each month, or you may only receive rewards if you have at least a certain balance in your account.

4. Early Account Closing

We usually don’t think about fees when closing a bank account. Unfortunately, some banks charge account holders a fee when they close their account too quickly after opening it. This could lead to a significant charge, and early account closing fees are one of the easiest fees to overlook.

As with other fees, your bank’s early account closing charges should be clearly stated somewhere on their website or in the app. Most stipulations require you to leave the account open for around 60 to 180 days before you can close it without paying an additional fee.

There typically isn’t a reason to close a bank account immediately, so you shouldn’t have any trouble avoiding these charges if you simply wait until the end of the waiting period. Set a reminder for the day it ends and close the account once you can do so for free.

Bank fees can be extremely confusing, and just understanding some common charges can help you avoid spending more money than you need to. These are just a few of the ways in which customers unknowingly pay high fees they could have easily avoided.

About The Author
Logan Allec is a CPA, personal finance expert, and founder of the personal finance website Money Done Right, which he launched in July 2017. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money.