{"id":13177,"date":"2022-09-08T15:14:46","date_gmt":"2022-09-08T22:14:46","guid":{"rendered":"https:\/\/canary.kcprod.info/blog\/?p=13177"},"modified":"2023-10-19T14:46:31","modified_gmt":"2023-10-19T21:46:31","slug":"bank-fees-and-how-to-avoid-them","status":"publish","type":"post","link":"https:\/\/canary.kcprod.info/blog\/bank-fees-and-how-to-avoid-them\/","title":{"rendered":"What Fees Do Banks Charge and How Can I Avoid Them?"},"content":{"rendered":"\n

When it comes to your savings, account fees are a bad thing. Fees can eat away at your wealth over time and are essentially negative earnings. Unfortunately, many financial institutions charge a broad range of fees on checking, savings, and cash accounts. They do this for two main reasons: one, according to our estimate<\/a>, banks need to make about $200 per client per year just to cover the cost to operate physical branches, and fees are one way to do this. And two, fees are a source of revenue. To make matters worse, the details of these fees are often buried in the fine print. In order to make the most of your money, it\u2019s wise to avoid account fees whenever possible. Doing this requires understanding the fees you could be charged and then keeping your savings somewhere that won\u2019t nickel-and-dime you.<\/p>\n\n\n\n

In this post, we\u2019ll explain some common fees banks charge on checking and savings accounts so you can better avoid them. The easiest solution, of course, is to keep your short-term savings<\/a> in an account with no account fees at all, like the Wealthfront Cash Account<\/a>. (You can further maximize your short-term savings by choosing an institution that pays a high APY<\/a>.)  If you keep your cash at another institution, here are some fees to watch out for:<\/p>\n\n\n\n

Monthly maintenance fees<\/h2>\n\n\n\n

Monthly maintenance fees are just what they sound like\u2014they\u2019re monthly fees you pay your bank in exchange for having a checking account. You\u2019re more likely to get charged maintenance fees if your account balance falls below a set minimum or you don\u2019t have direct deposit set up. Because you pay these fees on a monthly basis, they add up quickly.<\/p>\n\n\n\n

In a recent survey<\/a>, MoneyRates found the average monthly maintenance costs for checking accounts were $13.95, which adds up to nearly $170 each year. Unfortunately, even though free checking accounts have become more common than they were a few years ago, the majority of accounts in the survey still charged a monthly maintenance fee.<\/p>\n\n\n\n

Overdraft fees and insufficient funds fees<\/h2>\n\n\n\n

Many banks charge fees when you withdraw more than your available balance from your checking account. If your account comes with overdraft protection, your bank will cover the difference, but then charge you a sizable overdraft fee. If your account doesn\u2019t come with overdraft protection, the transaction won\u2019t go through and you\u2019ll likely get charged an insufficient funds fee, even though the money never left your account.<\/p>\n\n\n\n

According to MoneyRates<\/a>, overdraft fees cost about $30.82 on average. While this number has trended down slightly in the recent past, these fees remain a big source of revenue for banks. Fortune<\/a> reported that overdraft fees alone cost Americans almost $11 billion last year.<\/p>\n\n\n\n

Excess activity fees<\/h2>\n\n\n\n

Until April 24, 2020 the Federal Reserve\u2019s Regulation D limited the number of withdrawals and transfers you could make from any savings account (or money market account) to six per month. If you exceeded this limit, your bank would often charge you a fee to discourage you from doing it again. However, the Fed suspended this rule in the early days of the pandemic to make it easier for people to access their savings in difficult economic times. <\/p>\n\n\n\n

Despite the fact that Regulation D\u2019s limit is not currently an issue, many banks continue to charge excess activity fees for what they consider to be too many withdrawals. Depending on your bank, excess activity fees could cost as much as $10 per transaction<\/a>. <\/p>\n\n\n\n

Stop payment fee<\/h2>\n\n\n\n

If you write a check and it gets lost or stolen, you\u2019ll need to stop payment on it. This service, like many offered by typical banks, doesn\u2019t come for free\u2014in fact, large banks will sometimes charge as much as $30<\/a> to stop payment on a check.<\/p>\n\n\n\n

Something else to consider: stopping payment on a check usually lasts for six months. After that, you may need to pay an additional fee to renew the stop payment.<\/p>\n\n\n\n

Deposited item returned fee<\/h2>\n\n\n\n

If you\u2019ve ever deposited a check and had it bounce, you know what a frustrating experience that can be. First of all, the funds aren\u2019t deposited to your account. Second, you might owe your bank a returned deposit fee. If this sounds unfair to you (after all, you didn\u2019t write the bad check), you\u2019re not alone. Unfortunately, deposited item returned fees average about $13 per returned item (assuming the check is domestic), according to a recent analysis by MyBankTracker<\/a>.<\/p>\n\n\n\n

Paper statement fee<\/h2>\n\n\n\n

In all likelihood, your bank has encouraged you to go paperless with your monthly statements. That\u2019s because sending paper statements costs money. Some banks<\/a> charge between $1 and $5 a month just to send you a hard copy of your monthly statement. <\/p>\n\n\n\n

Card replacement fee<\/h2>\n\n\n\n

Mistakes happen, and losing your debit card can be an expensive one. Many banks charge what are known as card replacement fees in the event that your card is lost or stolen. MyBankTracker<\/a> studied these fees and learned that some banks charge as much as $30 to replace a lost debit card. <\/p>\n\n\n\n

Protect your cash from fees<\/h2>\n\n\n\n

Unfortunately, details about account fees can be difficult to find and decipher when you open a new account. The easiest way to avoid account fees is to keep your cash at an institution that doesn\u2019t charge them\u2014then you should never be surprised by a line item on your monthly statement. Wealthfront\u2019s Cash Account charges no account fees, ever. We do this because we believe in building a financial system that benefits people, not institutions<\/a>\u2014and that means letting you keep your hard-earned cash, not chipping away at it. (It also helps that we don\u2019t have an expensive network of physical branches to maintain.)<\/p>\n\n\n\n

The Cash Account doesn\u2019t charge:<\/p>\n\n\n\n