Type “worst bank fees” into a search engine and you’ll get a shameful litany of toe-curling stories about banks that slap “fines” on their customers with little-to-no mercy. This article is about those fees and not the banks (that’s an article for another day). It’s also about how to avoid those fees.
Let’s start with some common bank fees.
Common Banking Fees
Monthly Maintenance Fee
This is one of the more common fees. In simple terms, many banks charge a monthly fee just to have an account with them. In some cases, the fee is waived under certain conditions.
These conditions may include maintaining a minimum balance. In other cases, the fee is waived if you make a certain number of debit card transactions each month.
This is perhaps the most ubiquitous bank fee pet peeve out there, and it’s been around as long as lay-offs. The whole idea that there is a fee for using a machine in lieu of a person is, to many, criminal.
It’s particularly easy to resent this fee when it’s raining, you’re late for the airport, and there’s no ATM affiliated with your bank in sight. Depending on your bank, you could not only receive one but TWO fees for using a non-affiliated ATM. The first one charged right away by the ATM’s bank, the second charged by your bank. Yikes!
Overdraft fees are annoying enough. But ones that charge you the same fee no matter how much you overdraw, $3 or $3,000, are infuriating. Typically, overdraft fees range from $25-$35 and the FDIC reports that “13% of consumers accounts pay 93% of all overdraft fees.” These folks have trouble making their numbers work every month, a problem certainly made worse by recurrent overdraft fees.
Coin Counting Fee
At many institutions, you can have your coins counted free of charge if you are a bank customer. If you’re not a customer, you could have to hand over up to 20% of those pennies to the teller. CoinStar machines you find in the grocery store as they charge a super-annoying 9.8%.
The first challenge is finding a bank to count your change. Since the proliferation of CoinStar (which has a poor track record for counting correctly, FYI), many banks have scrubbed change-counting from their repertoire.
Chevy Chase Bank, in the DC area, offers the use of free change counting machines for customers. Word has it that they will let non-customers use them, too. LaSalle Bank, we’re told, counts for free, and TD Banks let anyone walk in and use their state-of-the-art animated coin counter free of charge.
If you’re unlucky and can’t find a bank near you that will count coins for free, you’re always welcome to ask the bank for coin wrappers, which they will provide free of charge.
Check Re-printing Fees
Kiplinger’s Personal Finance Magazine shares a story that sums up just how stupid Check re-printing fees can be and how they can be difficult to overturn.
“When Ilana Matfis moved from Sharon, Mass., to San Francisco, she figured that ordering new checks from Bank of America would be a snap. But when the new set arrived, ‘they’d spelled San Francisco wrong,’ recalls Matfis, 25. After misspelling Matfis’ name on the second order of checks, the bank finally got it right — then sent her a tab for all three sets.”
‘The charges were only about $10 each time, but I had to dispute them on principle,’ Matfis says. A customer-service representative in San Francisco declined to issue a refund. So Matfis called her branch back in Sharon, where an employee remembered ordering the first batch of checks and agreed to remove all the charges.”
How to Avoid Bank Fees
There are several steps you can take to avoid most if not all banking fees.
Pick the Right Bank
The first step is to pick the right bank. You want a bank that doesn’t charge a monthly service fee (or makes it easy to get it waived). We’ll address the other fees in a moment. But the starting point is to avoid that annoying monthly maintenance charge.
You may have many local banks with no service charge. Most online banks don’t charge this fee.
Here’s a list of some of the top options:
Consider ATM location and fees
The second step is to consider ATM charges. If you regularly use ATMs, you have two options.
First, you can find a local bank that has convenient ATM locations. I bank at Citibank, and they have ATMs in all 7-Elevens, in addition to bank branches.
Second, you can also consider an online bank. While they won’t have branches, many are part of an ATM network that doesn’t charge a fee. Here you’ll have to investigate the locations of the ATMs. Online banks typically have an ATM finder on their website that makes this easy.
Another option is to avoid ATMs. While this takes some planning, it’s a good way to avoid fees. If you need cash, get cash back using your debit card at many retailers.
Manage Your Money
Our last tip is important for a lot of reasons. But when it comes to banking, the best way to avoid an overdraft fee is to never overdraft your account. Obvious? Yes. Easy? Not always.