Banks charge a range of fees, many of which are avoidable. But you can only figure out how to avoid paying these fees if you know what they are. That’s why, here, we’ve made a list of 7 of the most common charges that are levied by banks.
Account maintenance and minimum balance: Several banks charge fees for maintaining your checking or savings accounts. Typically, these charges range between $5 and $25 per month. Accounts that offer rewards and other perks could be charged even more. To avoid minimum balance charges, ensure that you maintain a balance above the minimum at all times.
ATM usage: If you use an ATM that is not your bank’s, you can be charged by the ATM provider and your bank. For a single transaction, you could be charged $4 by the ATM provider and $4 by your bank. To avoid this, use apps provided by banks that tell you where fee-free ATMs are located. Alternatively, you can choose to withdraw cash in advance when you happen to be near your bank’s ATM.
Overdraft: You can make purchases using your overdraft coverage even if you don’t have a sufficient balance in your checking account. But, you may be charged up to $35 per transaction if you’ve signed up for this coverage. You can avoid this by constant monitoring of your account balance.
Insufficient funds: When you make a purchase for an amount that is more than the balance available in your checking or savings account, and you don’t have overdraft coverage, your bank may decline the transaction. Further, you could be charged an Insufficient balance fee by your bank. The best way to avoid this is by regularly checking your account balance, especially before a shopping trip!
Excess transaction charges: Many banks set a limit on the number of monthly cash withdrawals you can make from your savings account. If you exceed this number, your bank may charge you between $3 and $25 per transaction. You can avoid this by using your checking account for frequent withdrawals instead of using your savings account.
Wire transfer: Banks often charge you for using wire transfer to send money fast. The charges could be as high as $20 for domestic transfers and $35 for transfers abroad. To avoid this, try online banking or person-to-person transfer on your bank’s app.
Account closing: Some banks require you to keep your account active for a certain period after opening it, failing which you may have to face a penalty for early closure of the account. To avoid this, keep your account open for the required period before closing it.
