It can be frustrating to deal with bank fees, especially if you’re not fully aware of all the charges associated with your account. While you may be familiar with common fees like ATM fees and overdraft charges, many other fees can quickly pile up without your knowledge. In this article, we’ll share seven such fees with you and provide tips on how to avoid them.
1. Returned item fees
Your bank may charge you a fee known as a returned item fee if you write a check that bounces or have a direct deposit that is returned due to lack of funds. This fee can range from $25 to $40 per item, and if you have multiple returned items at once, it can quickly accumulate.
To avoid the fee, remember to check your account balance regularly and ensure that you have enough funds before making payments. You may want to set up banking alerts for low balances to stay updated on your account balance.
2. Foreign transaction fees
When you use your debit or credit card to buy things from foreign sellers or travel abroad, you might have to pay an additional charge known as a foreign transaction fee. This fee typically ranges between 1-3% of the purchase price and could be higher if you withdraw money from an ATM.
If you don’t want to pay foreign transaction fees, try using a debit or credit card that doesn’t charge them. Alternatively, you can withdraw enough cash in advance to avoid foreign ATM fees, but be aware that carrying too much cash can be risky if it gets lost or stolen and cannot be recovered.
3. Inactivity fees
If you don’t use your bank account for about six months to a year, some banks might charge you a fee for being inactive, which is also called a dormancy fee. Once you exceed the specified limit, the fee can be anywhere from $5 to $20 every month without any activity.
It is recommended that you set up automatic payments or transfers for accounts that you use infrequently. If you no longer require the account, closing it would be the best option to avoid incurring any unnoticed charges.
4. Early account closing fees
Be aware that there could be a fee for closing a bank account within a certain time frame, usually within 90 days of opening it. This fee can range from $10 to $50 and might catch you off guard if you opened the account and later realized it wasn’t suitable for your needs and thought you could just close it without consequences.
Before closing your account, ask your bank about any fees that may be associated. It may be better to wait until all direct deposits and automatic payments are transferred to another account before closing.
To avoid the possibility of closing your account due to dissatisfaction, make sure to thoroughly research and compare multiple accounts before opening one.
5. Overdraft protection fees
You may not know about the fee for using overdraft protection services, in addition to the well-known overdraft fees. Overdraft protection lets you connect bank accounts so that money from the linked account is automatically transferred to cover the charge if you have insufficient funds. However, each transfer may come with a fee of around $10 to $15.
One way to avoid fees for overdraft protection is to opt out of the service and watch your account carefully by using bank alerts. Another option is to find an account that doesn’t charge fees for overdrafts.
6. Account research fees
If you want to get copies of your previous statements or investigate a transaction, you may have to pay an account research fee. This fee is charged hourly and usually costs between $20 to $50 or more per hour of research.
To avoid paying for account research, it’s recommended that you keep digital copies of your statements and regularly monitor your account for any unusual transactions.
7. Incorrect information fees
To avoid unnecessary fees, it’s important to provide accurate information when setting up an account or making a transaction. If you provide incorrect information, you may be charged an extra fee of between $5 and $50 per occurrence. Double-check all information before submitting it to avoid this fee.
Bottom line
When opening a bank account, make sure to check the account disclosures or provided fee schedule for additional fees beyond the monthly maintenance and ATM fees. There may be several other fees to be aware of.
To save money in the long term, it’s important to know about and prevent fees. To avoid any unpleasant surprises, read through the account’s terms and disclosures, and ask the bank about any associated fees. Monitoring your account balance and transactions closely and setting up account alerts can also help you avoid unexpected fees.