A couple days ago I wrote about how to get the best savings rates for your emergency fund (that you should definitely have).  Writing that made me realize that many folks don’t even think about the cost of keeping their money in a bank in general.

Remember that keeping $1000 in a normal bank would make you a whopping $3 a year in interest based on current rates.  Because of low returns on your money you should work hard to not pay the bank to keep your money!!  Even one ATM fee a year and you’ve lost money on this deal…

What are some banking fees that you can avoid?

Monthly Account Fees
This is very 1980.  Most banks/credit unions offer free checking and savings accounts and you need to make sure you are in one.  Most of these do not have minimum balance requirements.  If your bank doesn’t offer free accounts, then it may be time to look elsewhere…  Pulling up a few different major banks I found that many don’t state that they offer “free” checking but if you have at least one direct deposit a month your fee is waived.  If you are in this type of account, remember what is required.  Changing jobs and not immediately setting up your direct deposit could be costly.

Things that may be required to maintain free checking:

Balance requirements
Minimum transactions per month
Direct deposit per month of a certain minimum amount (usually $500)

Bounced Check Fees
Also called Non-Sufficient Fund Fees (NFS), this is a huge $25-$35 fee every time a check bounces.  The simple solution here… balance your check book regularly!  If you use your debit card a lot make sure to pull out your bank register and enter those items as soon as you make them so you don’t forget.

Overdraft Fees
Overdraft protection is a big source of bank fees.  You may celebrate that the check didn’t bounce, but you’ll still end up paying a big fee because they did pay it.  My local bank charges $36 per overdraft paid item.  If you mess up and overdraft a couple items, you’ll pay the fee for every single item!

ATM Fees
As long as you stay at your banks ATMs you should always be fine, but the minute you use a machine that isn’t with your bank (or your network for credit unions) the fees start adding up.  Most ATM fees are $2.50 to $3 per transaction.  This doesn’t include a fee that the actual ATM may charge you as well!  To avoid these fees all together select cash back when you make in-store purchases at grocery stores etc.  There are no fees associated with cash bank when the transaction is already being processed.

Lost Card Fee
You may not realize that losing your wallet means fees too.  Most major banks have a card replacement fee starting at $5.  If you need the card rushed to you that could be up to $20 in fees.  This one fee most banks will waive though if you complain.  If your wallet was stolen definitely refuse to pay any fees for new cards.  The banks tend to waive this without much fuss.  If you lose your card monthly, that may not be as easy for you.

Paper Statement Fee
Many banks now charge a monthly fee to mail you a paper statement.  Our bank charges $1 a month!  Make sure you are set for digital statements.

Tip: With digital statements you need to put on your calendar a monthly reminder to look over your statements.  This way you can catch quickly any incorrect billing, or payments you didn’t realize you were still making.

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