Bank fees can quietly eat into your money, and they are not always obvious when you open an account. Knowing the most common fees, and how to avoid them, can save you real money over a year. This guide explains the charges you are most likely to see and practical ways to avoid them.
Common bank fees at a glance
| Fee | What it is | How to avoid it |
|---|---|---|
| Monthly maintenance fee | A regular charge for keeping the account open | Choose a no-fee account, or meet the requirements, such as a minimum balance or direct deposit |
| Overdraft fee | A charge when the bank covers a transaction that exceeds your balance | Set alerts, keep a buffer, link a savings account or opt out of overdraft coverage |
| Insufficient funds (NSF) fee | A charge when a payment is declined or returned for lack of funds | Keep enough in the account and use low-balance alerts |
| Out-of-network ATM fee | A charge for using an ATM outside your bank’s network, sometimes plus the ATM owner’s fee | Use in-network ATMs or choose a bank that reimburses ATM fees |
| Foreign transaction fee | A percentage-based charge for purchases made abroad or in another currency | Use a card with no foreign transaction fees |
| Wire transfer fee | A charge for sending or receiving a wire | Use free ACH transfers when speed is not critical |
| Paper statement fee | A charge for mailed statements | Switch to electronic statements |
| Inactivity fee | A charge when an account has no activity for a period | Make a small transaction from time to time or close unused accounts |
| Early account closure fee | A charge for closing an account shortly after opening it | Read the terms before you open the account |
Monthly maintenance fees
Many traditional checking accounts charge a monthly fee unless you meet requirements such as a minimum balance or a qualifying direct deposit. Many online banks and neobanks advertise accounts with no monthly fee. Our guide to online banks with no monthly fees compares several.
Overdraft and insufficient funds fees
An overdraft happens when you spend more than your balance and the bank pays the transaction anyway, often for a fee. An insufficient funds fee applies when a transaction is declined or returned instead. Policies vary widely, and some banks do not charge overdraft fees at all. Repeated unpaid overdrafts can lead to an account closure, which may be reported to a banking reporting agency such as ChexSystems. Read what ChexSystems is to learn more.
ATM fees
Using an ATM outside your bank’s network can trigger two charges: one from your bank and one from the ATM operator. Many online banks offer access to large ATM networks or reimburse some ATM fees, but the details differ by account.
Foreign transaction and wire fees
Foreign transaction fees are usually a percentage of the purchase, so they add up on long trips. Wire transfer fees are typically a flat amount, and international wires often cost more than domestic ones. If you regularly send money abroad, see our Wise account review and Revolut US review for two options built for international payments.
Why online banks and neobanks often charge fewer fees
Banks without branch networks usually have lower operating costs, which is one reason many offer fee-free accounts. That said, fees still exist. Some neobanks charge for certain services, and some accounts require direct deposit to unlock benefits. Read the fee schedule for the specific account rather than assuming. Our guide to neobanks explains how they work.
How to find all the fees on an account
- Look for the fee schedule or account disclosures on the bank’s website. Banks must provide this information before you open a deposit account.
- Read the sections on overdrafts, ATMs, international use and account closure.
- Check what you must do to qualify for fee waivers.
- Ask customer support if anything is unclear.
Ways to lower your banking costs
- Choose an account with no monthly fee.
- Turn on low-balance and overdraft alerts.
- Use in-network ATMs, or get cash back at a store when you make a purchase.
- Go paperless.
- Review your statements every month for unexpected charges.
- Ask the bank to waive a fee. Some will do it once, particularly for long-standing customers.
If you are already paying too much, our checklist on how to switch banks shows how to move to a better account.
Frequently asked questions
How can I avoid monthly fees?
Choose an account that does not charge one, or meet the bank’s waiver conditions, such as a minimum balance or regular direct deposit.
Do online banks charge fees?
Many online banks charge fewer fees than branch-based banks, but fees still exist for some services. Always check the fee schedule.
Are overdraft fees required?
No. Banks set their own policies, and some do not charge overdraft fees. You can also often choose whether your bank covers transactions that exceed your balance.
Can I get a bank fee refunded?
Sometimes. It is worth contacting the bank, explaining what happened and asking for a refund, especially if it is the first time.