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Bank Fees: Everything Your Bank Can Charge You For

You’ve probably experienced the pain of a bank fee at some point—that unexpected charge to your account, the balance that’s lower than it should be, the sick feeling of losing money when you were already running short.

If those fees feel unfair, it’s because they are!

Most banks make a ton of money by loaning customers’ deposits out and collecting interest on those loans. But that isn’t enough for them. Instead, these greedy companies charge endless fees to suck the life out of the customers who make those huge profits possible. (That’s you!)

We’re sharing the most ridiculous bank fees, so you’ll know what to watch out for—and how to avoid them.

Service Fees

Service fees can be applied to checking or savings accounts, and they charge you for keeping the account open. That’s it. You’re giving the bank money just for storing your name and deposit amount in their computer system.

You might think that sounds fair. After all, you’re paying for their service—storing your money for you. But remember, they’re already getting something in return for that. They’re out spending your money and turning a profit from it.

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Don’t give them a double payday by letting them charge you a service fee too. It’s unnecessary, and there are plenty of banks that don’t charge these fees. Work with them instead!

Maintenance Fees

Maintenance fees are some of the sneakiest. You agree to them when you open an account, and you may not even realize it until they show up on your statement six months later.

That’s because your ability to avoid maintenance fees depends on a few variables, like linking your checking and savings accounts, spending a set amount of money or keeping a minimum balance in your account. If you fail to meet one of those variables—bam! Fee!

Maintenance fees can run as much as $25 a month, and they usually fall into two categories.

Inactivity Fees

This is one of the stupidest fees. Inactivity fees happen when you aren’t using your account “enough,” according to the bank. Since you’re not spending money, the bank spends it for you—by taking it out of your account!

Traditional banks claim they have to charge inactivity fees to keep the account open when you’re not using it. But the truth is, they have to maintain customer accounts whether they’re in use or not. Banks just charge this fee because they’re money-grubbing buzzards who are trying to take your cash—not protect it.

Minimum Balance Fees

This one’s super fun too. Did we say fun? We meant dumb.

Most bank accounts have a minimum balance, meaning you have to keep a certain amount in the account at all times. If the minimum balance for your savings account is $300 and you’ve got more than that in the account, you’re good.

But let’s say you go under that amount. The electric bill was higher than you expected, your kid needed a sports uniform, or you just had to have a king-size Snickers from the gas station. Now you’ve got $298 in your account.

You’re $2 below the minimum, so the bank charges you $15. That drops your balance to $283. If you don’t notice you’re below the minimum—which is easy to do because, hey, you’re busy—the bank will keep taking $15 out of your account every month until there’s nothing left.

This doesn’t make any sense! The bank is punishing you for not having enough money in your account by taking more money out of it!

That jacked up logic proves two things. One, banks are not your friend. And two, you need to check your account at least once a week to make sure they’re not taking advantage of you.

You can set up alerts that let you know when your account balance is getting low, if your bank gives you that option. (If they don’t, run! They’re not even giving you a sporting chance to avoid the fees. You can find a better bank than that.)

Overdraft Fees

Banks made over $11 billion on overdraft fees in 2019.1 They seem like such a fact of life to most people, it’s easy to forget that these fees weren’t always considered normal. Past generations (think your grandparents or great-grandparents) lived in a world where they either had the money to buy something or they didn’t. No money meant no purchase. End of story.

Banks created overdraft fees because they realized many adults still have a Red-Faced Grocery Store Kid inside them. You know, the kid who’s throwing a temper tantrum over a toy, and his mom gives in just to shut him up? It’s the kid we all stare at and think, What a spoiled brat!

But even if we don’t want to admit it, most of us still have a little Red-Faced Grocery Store Kid in us: When we want something, we want it now.

Banks know this, so they invented overdraft fees to make money off it. They tell our immature inner child, “Sure, we’ll buy the $50 thing for you. You can pay us back.”  

When you pay them back the $50, they add a $35 overdraft fee. So you spend $85. For that price, you could have had two of what you wanted and still had some money leftover—and the bank wouldn’t be taking advantage of you.

Some people try to avoid overdraft fees with overdraft protection. That’s when you link your bank accounts—if you spend too much money from one account (usually your checking), the bank transfers money from another account (usually your savings) to cover the cost.

But this “protection” doesn’t really protect you. The more money you take from your savings, the more likely you are to start racking up minimum balance fees. And the less money you have to spend if you have a financial emergency.

The only way to truly avoid overdrafts is to control your spending. Because the truth is, children do what feels good. Adults come up with a plan and follow it.

Now, we know sometimes overdrafts happen when you’re trying to pay bills. We get it. Making ends meet is stressful, and bank fees don’t help. But you can still take control of your money and create a budget that works for you so you never have to pay an overdraft fee again.

Insufficient Funds Fees

If the bank does block a purchase you can’t afford, you may not be out of the woods yet. You’ll pay an insufficient funds (NSF) fee if you opted out of overdraft protection or if you try to spend more money than the protection will cover.

Basically, since you don’t have enough money for whatever you tried to buy, the bank won’t let you buy it. Then, they use the NSF fee to take the money you do have. (Because that makes sense.)

NSF fees cost about the same as overdraft fees, and they can happen with debit cards or checks. Checks are less common these days, but if you do bounce one, it can cause some big problems—like getting in trouble with law enforcement.

Avoiding these fees is extra important for staying out of trouble and keeping your financial integrity in one piece.

ATM Fees

Sometimes you have plenty of money, but you access it “wrong.” When you use an ATM that doesn’t belong to your bank, the bank that owns the ATM charges you a fee. That’s because they have to notify your bank of the transaction and get the funds from them. And if you’re really (un)lucky, your bank will charge you another fee.

We can kind of, sort of, just barely see why they do this. After all, they have to put forth a tiny little speck of time and effort to make the transaction happen. That must be exhausting for them.

Many people think ATM fees aren’t a big deal, because they only cost a few dollars. But when you make a habit of using ATMs with fees, that $4 or $5 per transaction adds up.2 Plus, there is no reason for banks to charge these fees—other than the fact that they’re greedy.

ATM fees come up a lot when people travel. They get somewhere and realize they don’t have enough cash, and their bank doesn’t have any local branches. Even big national banks may not have branches in every state or city.

You can avoid some ATM fees by checking online or in your banking app beforehand. You might find a location you didn’t know about or an affiliate bank that won’t charge you. That said, it’s good to have a backup plan—either a debit card or cold, hard cash. (We prefer the cash, and so do most businesses.)

Transaction Fees

Certain types of transactions are riskier for banks than others, or they require more effort from the bank. In those cases—you guessed it—banks charge fees.

Wire Transfer Fees

When you send someone money, the bank is basically acting as a courier service to make sure the money gets there. So they charge you a fee for that service—usually about $20.

Since international wire transactions pose more risk of loss or fraud, banks charge higher fees when you send money out of the country. International wire transfer fees can cost up to twice as much as domestic transfer fees.

And now a quick timeout for a safety tip: Never send money to anyone unless you know exactly who they are and where the money is going. A lot of kind, well-meaning people become victims of fraud, extortion and identity theft because they were trying to help someone they didn’t know and shouldn’t have trusted. Don’t let that be you!

International Transaction Fees

You may also have to pay foreign transaction fees if you use your debit card or buy certain products while you’re visiting another country, because banks view these transactions as higher risk than buying something at your favorite local store.

One way around international transaction fees is to carry cash. In most destinations, carrying cash is safe as long as you use common sense and don’t flash wads of money in front of people.

Miscellaneous Fees

In case you missed it, banks like to charge for everything. And while we’ve covered the most common fees, there are a ton of sneaky little fees they can get you with.

Need to replace your lost debit card? Fee. Want a paper statement from a “paperless” bank? Fee. Want to close your account? Fee. (Yep—once you decide you’ve had enough of their garbage, banks will snatch one last handful of your money as you’re walking out the door.)

Remember, banks exist to make money, and the only way they’re going to do that is by taking yours. Get on your guard so you know which fees your specific bank charges. Or better yet, find a bank that doesn’t charge fees at all.

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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