How do I Avoid Bank Account Fees?

Diane Goettel
Diane Goettel

The best way to avoid bank account fees is to thoroughly understand the rules and regulations associated with one's bank account and read all notices from one's bank thoroughly. Such notices may change the terms of one's agreement with a bank and, if they are not read thoroughly and addressed, could lead to bank account fees. Simply understanding all of the information associated with one's bank account and following all of the rules and regulations is the best way to avoid bank account fees. Also, if an unexpected fee is levied against an account, be sure to contact the bank to understand the reasons behind the fee. At worst, the holder of the account will have a better understanding of a rule or regulation that resulted in the fee and, at best, an errant fee will be reversed.

Overdraft fees are often the most expensive banking fees.
Overdraft fees are often the most expensive banking fees.

Before opening a bank account, have a representative of the bank thoroughly explain all of the bank account fees that will be charged to the account. Is there an annual or monthly fee? Are there fees associated with using ATMs or ATM machines owned by other banks or financial companies? Also, be sure to make a note of any rules regarding a minimum balance on the bank account. Sometimes banks will allow minimum balances to be spread across a number of linked accounts, so be sure to inquire about this as well.

Maintaining the required balance in a savings account can avoid a bank fee.
Maintaining the required balance in a savings account can avoid a bank fee.

Understanding when and how bank account fees will be levied is the best way to anticipate them, avoid them, and — in some cases — prepare for them. In some cases, a small bank account fee is easier to cover than a late payment on a bill. If an account holder is armed with the appropriate information, smart financial decisions about when to absorb bank account fees and when to avoid them can be made easily. For example, if a bank account fee for going below the minimum balance is $7 USD (US Dollars) per month but the late fee on a bill is $30 USD, it makes more sense to accept the bank account fee than to pay a late fee.

It's important to read the fine print when selecting a banking institution.
It's important to read the fine print when selecting a banking institution.

Be sure to always have a clear idea of the balance in your account or linked account. Either follow your balance online, through paper statements, or by using a phone service that allows you to check your balance. Very often, the highest bank account fees are overdraft fees, so make sure to keep a large enough balance in your account to avoid them.

Some banks will waive ATM fees if they do not have a physical location in the area.
Some banks will waive ATM fees if they do not have a physical location in the area.
Paying debt off in a timely manner can help eliminate interest fees.
Paying debt off in a timely manner can help eliminate interest fees.
Diane Goettel
Diane Goettel

In addition to her work as a freelance writer for wiseGEEK, Diane is the executive editor of Black Lawrence Press, an independent publishing company based in upstate New York. She has also edited several anthologies, the e-newsletter Sapling, and The Adirondack Review. Diane has a B.A. from Sarah Lawrence College and an M.A. from Brooklyn College.

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