When you’re trying to save money, every dollar counts. Tracking your money is one of the best ways to meet your savings goals. You’ll identify wasted money such as bank fees, data charges, unused subscriptions, and memberships that you don’t use. Here are 5 types of bank fees and how to avoid them.
1. Maintenance Fees
If you’re paying your bank to host your checking and savings accounts, it might be time to shop around for a new bank. You could save as much as $180 per year. If you love your bank or have other reasons not to move, use these strategies to avoid the fees.
- Arrange for your salary to be paid by direct deposit. Most checking accounts are free when the paycheck is deposited automatically every month.
- Pay attention to the minimum balance required to qualify for free checking at your bank. If you fall below the balance, you’ll need to pay.
- Many banks waive maintenance fees if you use your debit card a few times every month.
2. Out-of-network ATM Fees
Sometimes you find yourself out of town or on the road, and you need cash. But when you take cash from an ATM that’s not in your network, you pay a surcharge. These surcharges can add up. USA Today recently reported that the average ATM surcharge was $3.09 in 2019, which was an increase over the previous year. As fintech payment platforms become more mainstream, the cost of maintaining the ATM rises. Banks need to pass this on to you.
- Prepare ahead of time and take out more cash than you need so that even if you’re traveling, you’ll have enough for those out-of-pocket expenditures.
- Use your bank’s mobile app to locate all the ATMs that are in your network.
- If you find you have no choice but to use an out-of-network ATM, withdraw a larger amount so there is no need to use the ATM again.
3. Overdraft Fees
The fees for overdrafts can be excessive, in addition to the fees you need to pay the merchant. The average overdraft fee is $35. If you make several purchases that day, you could easily pay $35 multiple times.
- Maintain a healthy balance in your checking account to avoid overdrafts.
- Sign up for email or text message alerts that alert you when your balance falls below a certain level.
- Some banks allow you to link your savings account to your checking account. In case you fall short, the bank will automatically transfer money from your savings accounts to cover the withdrawals. You’ll need to pay a small amount for this, but it’s much less than the overdraft fees.
- The best is to monitor your balance to be sure you don’t fall short.
4. Inactivity Fee
If you haven’t used your account for six months or longer, you will probably be charged an inactivity fee. The bank is not required to notify you. These fees could reduce your balance to the point where the bank is free to close the account.
Perhaps you opened a new account and never bothered to close the old one. But it’s still your money. If you want to keep this account open, set up a recurring payment, such as your monthly cable bill. There will be regular activity, and you’ll avoid this bank fee.
5. Mailed Account Statement Fee
Are you still getting a paper statement in the mail? With online and mobile banking, the paper account statement is a thing of the past. You can access your account statement through the bank website, bank app, or by email.
If you prefer paper, you’ll have to pay a paper statement fee, which averages around $3 per month. That’s $36 per year that you could use for something else.