If you’ve got a checking or savings account, chances are you’ve gotten hit with a fee at some point. For banks, fees equal increased revenue but for consumers they’re simply a nuisance. Before you hand over another penny to your bank, here’s what you need to know to avoid racking up unnecessary fees.
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Account Closing Fees
When you open a new checking or savings account you’re usually required to make a minimum deposit upfront. Depending on the bank and the type of account you’re opening this can be as little as $1. Aside from that, you don’t have to worry about any fees or additional charges to get things going.
If, however, you decide to close your new account, be prepared to cough up the cash to do so. Some banks charge customers a fee if you don’t keep your account open for a certain period of time. If you’re thinking of moving your money elsewhere, check with your bank first to make sure you won’t get hit with a penalty.
Paper Statement Fees
Choosing to receive electronic statements versus old-fashioned paper ones benefits the environment but it can also help you keep some extra green in your wallet. In an effort to encourage customers to take advantage of online banking services, many banks are now charging a fee for requesting paper statements.
It may not seem like much to pay $2 or $3 a month for this service but it can add up over time. Not only that but you’ll have to worry about keeping up with all your paperwork. Choosing electronic statements instead cuts down on clutter and cost.
If you have a question about your bank account or you need help with certain transactions you may need to stop by your local branch. Getting help from a teller is the logical choice but it could actually end up costing you money, depending on where you bank.
For example, if you have an account designed only for ebanking, it can cost you around $7-9 a month to make deposits or withdrawals through the teller versus completing these transactions online. If you prefer to do your banking in person, steer clear of accounts that charge teller fees.
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Account Maintenance Fees
An account maintenance fee is essentially money the bank charges you to keep your account open. Some banks don’t charge any maintenance fees at all while others only tack them on to certain types of accounts.
Maintenance fees can be assessed on a monthly or yearly basis. The fees typically range from $4 to $20, although there are a handful of banks that charge more. You may be able to avoid a maintenance fee by meeting certain requirements, such as enrolling in direct deposit or automatic bill pay.
Minimum Balance Fees
In addition to a monthly or yearly maintenance fee, you may also be subject to a minimum balance fee if you don’t keep enough cash in your account. Many banks assess these fees to help cover some of the cost of providing account services.
Depending on where you bank, minimum balance fees can be assessed based on your average daily balance or your balance on the last day of your statement cycle. If your balance fluctuates between highs and lows throughout the month, you’re probably better off looking for an account without a minimum balance requirement.
There are certain types of bank accounts that limit the number of transactions you can have in a given month. If you go over what’s allowed, the bank may charge you a fee. You can also get stuck paying a fee if you don’t have enough transactions posting to your account.
Inactivity fees typically only kick in after your account’s been dormant for a prolonged period of time, usually three to six months. If you’re planning to take a hands-off approach to your account, setting up a recurring transfer or bill payment can help you avoid an extra charge.
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A bank account is meant to be a convenient way to keep your cash safe but it can end up being a hassle if you’re constantly throwing money away on fees. If you’re planning on opening a new account or you’re not sure what fees your current bank charges, it pays to read the fine print.
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