Watch Out for Hidden Bank Fees

Banks and consumers have a conflict of interest. Consumers want free checking accounts and to pay as little as possible for services. Banks, on the other hand, want to make millions and billions for their shareholders. Your basic checking account may be free, but watch out for services that could cost hundreds of dollars a year.

Monthly maintenance fees

Most checking accounts are free, but with stipulations. For example, it may be free only if you maintain a certain minimum balance, make a certain amount of deposits each month, or have a certain amount direct deposited into your account each month. You’ll be assessed a fee in any month you don’t meet at least one of the criteria.

Courtesy overdraft protection

Banks will cover your overdraft transactions as a “courtesy” to you, but they’ll also charge a fee for the courtesy. Fees can be up to $35 depending on the institution and they're charged for each overdraft transaction. Even if your overdraft are set up to clear through your savings account or line of credit, you’ll pay a small fee for the service.

On top of that, you’ll pay a fee for leaving your account balance negative for too long. After about five days, the bank will start penalizing you for having an overdrawn account. The frequency and amount of the fee depends on the bank.

Nonsufficient funds fee

You can opt-out of overdraft protection for debit card transactions and your card will be declined. However, if banks don’t process your overdraft checks, they’ll instead return the check to the payee for nonsufficient funds. The bank will, in turn, charge you a NSF fee for not having enough money in your account to cover the fee.

Foreign ATM fee

Using an ATM outside your bank’s network will trigger not one, but two fees. You’ll have to pay one fee to your bank and another to the bank who owns the ATM. It could cost between $5 and $6 to withdraw your own money. It’s cheaper to make a small debit card purchase from a store and request cash back.

Electronic transfer fee

Sending money between banks, even between two checking accounts of your own, is called a wire or electronic transfer. Many traditional banks charge a fee for transfers: $20 to $30 for outgoing domestic transfers. International wire transfers are more expensive. You might also have to pay a fee for incoming wire transfers. Not all banks charge these fees. For example, online banks typically do not charge a fee for transferring money.

Certified check fee

A certified or cashier’s check is similar to a money order in that the funds are withdrawn from your account when the check is issued. You might use the certified check for faster processing or to ensure the check won’t bounce. However, some banks charge a fee up to $10 or $15 to issue a certified check. A postal money order is typically cheaper.

Returned deposit

If you deposit a check into your account and the check bounces, your bank will probably charge a fee for the returned item. Even though it’s not your fault the check didn’t clear, some banks penalize you anyway. The fee can range from $10 to $25 depending on the bank and whether it was a domestic of international check.

This is one of the more ridiculous fees because you have no way of knowing whether a check is good before you deposit it. You’re being punished for something you really have no control over.

Account closing fee

If you’re fed up with your bank and its fees you might have to pay one last fee before you can take your business elsewhere. Accounts that have been open for less than 180 days will often face an account closure fee up to $25. You might save yourself the fee if you wait just a few more months. Just make sure you won’t incur more than that in penalty and transaction fees in the meantime.