Here’s a look at some of the most common bank fees, why you might get charged for them, how much they (typically) cost and — of course — how to avoid them.
Monthly maintenance fee
Cost: Depending on the bank, you’ll see monthly maintenance fees range from as low as $4 or $5 a month all the way up to $25. (That’s $300 a year!)
Reason: This is a monthly fee just for using a specific bank account. In other words, you’re paying the bank just to hold your money for you!
Some banks will waive these fees if you also complete other requirements. These could include:
But honestly? The easiest way to avoid monthly maintenance fees is to simply choose an institution that doesn’t have them.
For example, bank accounts offered through Chime are free of any monthly fees, so you won’t lose a single penny to maintenance charges again.
Minimum balance fee
Cost: As with maintenance fees, you can expect to pay anywhere from $5 to $25 (or more) a month in minimum balance fees, depending on the account.
Reason: If you don’t keep a certain amount of money in your account each month.
Sometimes, this is a daily minimum (so if you ever drop below that minimum, you’ll get charged the fee) while others have a minimum monthly average (meaning, you won’t get charged as long as your average balance is above that threshold).
The minimum daily balance is most often found as a subset of the monthly maintenance fee we already talked about. As long as you keep a certain amount of money in your account, your bank will waive that monthly fee.
How to avoid it: As with the maintenance fees, the best way to avoid a minimum balance fee is to choose a bank that doesn’t charge them. Otherwise, the only real way around them is to ensure that you are keeping enough money in your account at all times.
ATM fee
Cost: Between $1.50 and $3.50 per transaction, on average.
Reasons: ATM owners (which can either be another bank or a private business) will charge a convenience fee for letting you use their machine. Your own bank may even charge you on their end if you use someone else’s (non-network) ATM, meaning two fees — talk about adding insult to injury!
There are two types of ATM fees: the ones charged by the bank that owns the ATM, and the ones that can be charged by your bank if you use another bank’s ATM. Ideally, you’ll want to avoid both.
The owner of an ATM will usually charge a service fee for letting you use that machine for withdrawals or to check your balance. You can best avoid this fee by only using ATMs that are in your network. Some banks also offer ATM fee reimbursement, which refunds any ATM fees you might incur from other banks throughout the month.
Your bank may also charge you a fee on their end, if you use another bank’s ATM — so essentially, you could pay two fees just for using an out-of-network ATM to access your account. Again, the best way to avoid this is to choose a bank that doesn’t charge these fees or to only use in-network ATMs (like one of the 38,000+ nationwide ATMs that you can access for free through Chime).
How to avoid it: Can’t find an in-network ATM? You can often use your debit card to get cash back when making a purchase, and you can usually check your account balance or transfer funds with your banking institution’s mobile app.
Insufficient/non-sufficient funds fee (NSF)
Cost: NSF fees can be anywhere from $15 to $45 per transaction, depending on your bank. And if you don’t realize your account is overdrawn, you could rack up a few of these charges in a single day.
Reason: If you spend more than you have in your bank account.
These fees are often charged whether it was a recurring transaction (such as a bill on auto-pay), a written check, or a debit card purchase that was just posted.
You’ll often find that NSF fees are applied even if the transaction is declined. And in some cases, the merchant you were trying to pay may also charge you a penalty fee. (Talk about adding insult to injury!)
NSF fees can be a serious drain on your bank account. Recent data from the FDIC found that American banks collected more than $11.45 billion (yes, with a “b”) in NSF and overdraft fees from customers in 2017.
How to avoid it: Good news: It’s pretty straightforward, but requires a little bit of work. You can:
- Sign up for account alerts to let you know when large transactions post and when your balance dips below a certain amount
- Monitor your cash flow daily to watch for low balances and payment due dates
- Link your checking account to a savings account, and quickly move money around if you’re getting close to $0 (and if your bank allows for automatic overdraft transfers, even better!)
- Sign up for overdraft protection, if your bank offers it
NSF fees are typically north of $30 each, even if the charge itself was less than $1. If you’re not monitoring your account balance, you could easily rack up multiple NSF charges in a single day.
Overdraft fee
Cost: If your bank offers overdraft protection, expect to pay somewhere between $15 to $45 in fees per transaction… even if you only bought a $0.99 pack of gum!
Reason: You spend more than you have deposited in your account at a given time.
We know – it sounds similar to NSF fees. The difference? Overdraft fees are charged when your bank allows the purchase to go through, rather than declining it.
This can be beneficial if you don’t want to deal with the hassle of resubmitting certain payments, especially recurring bills that you have automated. It also helps you avoid return charge fees from whatever merchant you were trying to pay.
Once your bank approves an overdraft transaction, your account balance will dip into the red (negative). You’ll need to deposit funds to not only bring your account back into the black, but also cover whatever overdraft fee(s) you’ve been charged.
These fees can easily — and very quickly — add up. According to a 2020 Doxo study, households who incur overdraft fees wind up paying an average of $354 per year in them.
How to avoid it: The best way to avoid these fees altogether is to choose a bank that doesn’t charge them. (Yes, there’s definitely a theme here.) For instance, Chime helps you avoid overdraft fees on debit card purchases with SpotMe, which could potentially save you hundreds a year.
You should also keep a close eye on your account balance and monitor your cash flow. Don’t forget any recurring charges like subscriptions or utility payments that might be set on autopay. And if your balance starts getting low, make a deposit or transfer from a connected savings account.
Overdraft protection is usually an optional feature on bank accounts, too. If you would prefer that any overdraft transactions just be declined, you can typically opt out. (Just know that you may incur NSF fees, depending on your bank’s policies.)
Card replacement fee
Cost: Not all banks charge card replacement fees (pssstt, Chime doesn’t!), but if they do, expect to pay between $5 and $10 to get a new one shipped out. Need it quick? Expedited processing and shipping can be another $25 to $30.
Reason: You somehow lost your bank card and need a new one ASAP.
At least once a year, I misplace my debit card (or my keys, or my driver’s license, or…). Replacing it can not only be a pain, but can also cost money with certain banks.
How to Avoid It: I would say “just don’t lose your card,” but that would make me a hypocrite. 🙂 Your other option is to pick a bank that doesn’t charge to replace your card, or opt for standard shipping if you don’t need it right away.
Foreign transaction fee
Cost: Typically, foreign transaction fees will be somewhere around 3% of your total purchase. So if you find a cute $60 dress in Italy or buy a $100 round of tequila in Mexico, expect to cough up a few extra bucks in transaction fees ($1.80 and $3, respectively).
Reason: If you travel out of the country and want to make a debit card payment — or use your bank card to get cash from an ATM — make sure that you won’t incur any foreign transaction fees in the process.
When your bank has to do extra work to process foreign transactions (or even if your transaction just has to pass through a foreign bank!), you can often expect to pay a transaction fee for the service. These fees are added to transactions made outside of the United States, whether they are processed in foreign currency or already converted to U.S. dollars.
Generally, foreign transaction fees are charged as a percentage of your purchase and are often around 3% of the total transaction amount.
How to avoid it: Use a debit or credit card that allows for foreign use without a fee when you’re traveling out of the country. You could also pay with cash, but this is less secure than using a card that you can deactivate if it’s lost or stolen.
