5 Bank Fees To Avoid in the New Year

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Bank fees can needlessly frustrate even the most astute in managing their money. The fees may not be terribly onerous, but over time, they can claw away your hard-earned money.

For Americans wanting to protect their bank account from eroding in the new year, due diligence is vital to identify ways to avoid such fees and save money. These are five notorious bank fees to avoid that will help you protect your account balances.

1. Monthly Maintenance Fees

Monthly maintenance fees are some of the most egregious fees in the banking space. This fee is simply for having an account and is charged to your account each month. According to CNBC Select, monthly maintenance fees can range from as little as $4 to $25.

Thankfully, there are some options to avoid this fee. It’s not uncommon for a bank to waive the fee if you establish a recurring direct deposit, such as a monthly paycheck. You may also be able to evade the fee if you meet a certain balance threshold. Ask your bank for ways to avoid the maintenance fee, such as a specific account type that may not charge it.

2. Overdraft Fees

Overdraft fees can be quite burdensome, and the charge varies by bank. An overdraft occurs when you don’t have enough funds to cover a transaction. This is somewhat different from a nonsufficient funds (NSF) fee, where the bank declines a payment and still charges you a fee.

Banks earned over $5.8 billion in combined overdraft and NSF fees in 2023, according to the Consumer Financial Protection Bureau. Staying aware of account balances is a good way to avoid this fee. You may also be able to link a savings account to your checking account to prevent overdrafts and avoid fees. Just make sure not to perform too many transfers monthly, as that can result in another fee.

3. ATM Fees

Banks love to charge ATM fees to Americans who need quick access to cash outside their respective ATM networks. Worse yet, a double fee can occur when using an out-of-network ATM that charges a fee in addition to the ATM operator’s fee.

Choosing an in-network ATM is a good way to avoid this fee. If your bank offers an ATM locator in its app, use it to find suitable ATMs.

4. Inactivity Fees

Inactivity, or dormancy, fees occur when you have no activity in an account over a set period of time. Unfortunately, there’s no industry standard for when the fee occurs or how much the bank charges.

Using direct deposit is a simple way to avoid the fee. If that’s not possible, using your debit card even just once or twice a month is a good way to avoid this fee.

5. Paper Statement Fees

Do you like the idea of receiving a paper statement to manually review your account each month? You’re more likely than not to pay for that desire. As more banks move to electronic-based communication, it’s common to see many institutions charge to receive paper statements.

The charge varies by bank, and some institutions may offer ways to avoid the fee, such as maintaining a minimum balance or opting for a specific account type. If that’s not available, get comfortable with the bank’s app to manage your finances.

Banks love to charge fees, but that doesn’t mean you need to simply accept them. Request to see your bank’s fee schedule or truth-in-savings disclosure to identify potential fees and how you can avoid them.

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