Bank fees

Do you know what bank fees you’re paying? Knowing that banks may charge fees for certain behaviors and transactions on your account and understanding specifically what you can do to avoid those fees at your bank, can save you money. Nessa Feddis, vice president and senior counsel at the American Bankers Association, says that the fees banks impose are created because banks now offer their customers more services than ever before – like ATMs and online banking – services that cost the banks money. Many of the fees you’ll find though are unnecessary and avoidable. There may be charges for returned mail, foreign transactions, receiving paper statements, using over the maximum allotted electronic funds transfers, or more. Don’t pay your bank more than you need to, and don’t bank with a financial institution you don’t trust to keep you informed of these fees.

U.S. News spoke to banking experts to shed light on lesser-known bank fees and provide ways to avoid them. I’ve posted a few below:

1.       Early account closure fee.

Many banks require you to have your account open for a certain amount of time before closing it, or else you will get slapped with a fee. To avoid that early closure fee, make sure your keep your account open past the minimum period.

2.       Monthly or annual maintenance fee.

A number of banks charge monthly or annual maintenance fees for certain accounts. For example, a regular checking account at Bank of America comes with a $12 monthly maintenance fee. However, if you fulfill any number of requirements, such as maintain a minimum daily balance in checking of $750 or more; you can get the fee waived. Check your bank's policy to see if you're being charged a maintenance fee and to find out ways to avoid it.

3.       Minimum Balance Fee.

Some banks charge a monthly fee for customers with low account balances. To avoid a minimum balance fee, review your bank’s policy to see what amount you need to maintain.

4.       Returned Deposit Fee.

If you deposit a check that bounces, your bank could charge a fee. Some banks will charge 12 or 15 dollars per returned deposit item (or bounced check)! Many small banks and credit unions don’t tag on a returned deposit fee; you might want to look into changing your bank if you think you’re going to encounter a lot of bounced checks.

5.       Lost debit card fee.

Most banks charge you to get a replacement card, and if you’ve misplaced your debit card, the fee may be unavoidable. To lessen the blow, you don’t have to request expedited delivery on your new card – some banks charge extra for rush orders – you can simply use cash for payments or a different card while you’re waiting for the new one. 

6.       Paper statement fee.

Receiving paper statements could be costing you. A lot of banks say that paper statements are expensive to produce and they are not environmentally friendly, so banks will try to dissuade people from getting them by placing a fee. U.S. Bank charges customers up to $2 a month on some checking accounts for paper statements. You have the option to search for a bank that doesn’t charge a fee for paper statements or signing up for electronic statements. Most banks provide electronic statements free of charge.

7.       Returned mail fee.

When you move, a mail forwarding request with your post office may not be good enough for your bank. Many banks print "return service requested" on their envelopes, so your mail gets sent back to the bank if it can't be delivered, upon which a number of banks charge a fee. U.S. Bank, for example, charges a $5 fee for the second and subsequent months that a statement is undeliverable. Make sure you update your address with your bank upon moving.

8.       Human teller fee.

Some banks even charge a fee for using a person to handle certain transactions. For a Bank of America checking account, there's no fee when you choose online paperless statements and make your deposits and withdrawals online or with an ATM. However, if you use a teller, you have to pay the monthly maintenance fee of $8.95. To avoid this, make sure you seek out bank accounts that don’t levy this charge. Also, choose an account that aligns with your behavior.

It’s a goal here at Systematic to keep our friends and customers informed on all important banking policies, so that you can make informed decisions about your financial needs. We’re not hiding anything.

If you have any questions about this blog or suggestions for next week, don’t hesitate to comment below!