Like most people, I store my money in a bank. I’ve always been too nervous to keep a wad of cash under my bed, so I let my money go straight to the bank so all I have to do is swipe a card to pay for things. But, what happens when the place you think your money is safe- starts to take money from you?
Bank fees are surprisingly common. According to data from the Federal Deposit Insurance Corporation (FDIC), banks that manage over $1 billion in assets collect over $11 billion annually in bank fees from consumers. From personal experience, my bank started to charge me a fee for not qualifying for a certain criteria they put in place and I didn’t even know about it until one day I looked at my account and saw $10 being taken out monthly.
By being aware of the different types of bank fees, you can protect your money and achieve financial goals. Keep reading for a checklist of common bank fees and how to avoid them.
Savings Account Activity Fee
This is something I had no idea about until I got that little red banner on my iPhone pop up. Depending on the bank, they may have a limit of times you can transfer money OUT of your savings account. My bank personally only allows me to transfer money from my savings account 6 times in a month. They do not remind you how many times you’ve done it, but they tell you when you’re reaching that limit. If you surpass that 6 time limit, they charge you a fee. It’s important to know whether or not your bank has set a limit on your savings account transfers to avoid that fee!
Charges on Minimum Balance
Some banks will charge you for how much you have in your checking account. If you’re below a certain limit, they charge you a monthly fee until you add more money into your account. To avoid this, make sure to choose a bak account with a minimum balance requirement that fits your budget. If you’re able to, choose to utilize direct deposit from your employer. Using direct deposit will ensure the money goes directly to your checking account and limits the possibility of you forgetting to deposit your check in time for an upcoming bill.
Another way to avoid fees is to set up alerts. Banks are now trying to help it’s customers by letting them set up alerts on their accounts to tell you if your balance is running low or if any suspicious activity is occurring.
Crazy, right? Some banks have in their agreement that if there is no activity on your account, you can be charged a fee. This policy is different for many banks, so let’s use an example! Let’s say you have a checking account that’s been unused for 1 year. Your bank can begin taking anywhere from $5 to $20 a month from that account until the balance is completely gone and the account is closed. Some banks even implement an inactivity fee in as little as 6 months of inactivity.
To avoid this fee, it’s important to contact your bank and understand what their policy is. By knowing their policies, you’ll be able to avoid any charges and any surprises along the way.
Paper Statement Fees
I don’t believe many people have paper statements these days, unless you’re my dad. Most banks are going paperless now and encouraging their customers to opt for electronic monthly statements. However, if you don’t opt for paperless statements, some banks have started charging fees. You can be charged between $1-$2 per paper statement. Even if your bank currently doesn’t charge for paper statements, it is slowly becoming the norm.
Something to Consider
Sometimes, a fee might be unavoidable. The good news is your bank is usually there to help! It never hurts to try to talk to you bank to waive the fee. If you’ve been a loyal customer without any issues, be sure to bring this up. The bank will usually be happy to waive the fee for you!
The most important take-away from this is to know your bank’s policies. Problems usually arise when you haven’t read the policy and your bank starts to implement them when you didn’t even realize they were there.