If you have a checking account, it is important to understand the fees and penalties that may be associated with it. These fees can vary significantly depending on the bank or credit union you use, so it is important to carefully review the terms and conditions of your account before opening one. In this article, we will provide a detailed overview of the most common fees and penalties associated with checking accounts and explain how you can avoid them.
1.Monthly Maintenance Fees
One of the most common fees associated with checking accounts is the monthly maintenance fee. This is a fee that is charged to you on a monthly basis for the privilege of using the account. The amount of this fee can vary significantly depending on the bank or credit union you use, but it is typically between $5 and $15 per month. Some banks and credit unions offer ways to waive this fee, such as by maintaining a minimum balance in your account, making a certain number of transactions each month, or signing up for direct deposit.
2. ATM Fees
Another common fee associated with checking accounts is the ATM fee. This is a fee that is charged to you when you use an ATM that is not owned by your bank or credit union. ATM fees can vary significantly depending on the bank or credit union you use and the location of the ATM you are using. Some banks and credit unions charge a fee for both using an ATM that is not owned by them and for the ATM owner charging a fee. This means that if you use an ATM that charges a fee, you may be charged an additional fee by your bank or credit union. To avoid ATM fees, you can try to use ATMs that are owned by your bank or credit union or use a bank or credit union that does not charge ATM fees.
3. Overdraft Fees
Overdraft fees are fees that are charged to you when you make a purchase or withdraw money from your account and do not have sufficient funds to cover the transaction. These fees can be quite steep, typically ranging from $30 to $35 per overdraft. Some banks and credit unions offer overdraft protection, which allows you to link your checking account to a savings account or credit card so that if you overdraft your checking account, the funds will be transferred from the linked account to cover the overdraft. This can help you avoid overdraft fees, but it is important to note that you may still be charged fees for the transfer.
4. Returned Item Fees
A returned item fee is a fee that is charged to you when a check or electronic payment that you have written or authorized bounces because you do not have sufficient funds in your account to cover it. These fees can also be quite steep, typically ranging from $30 to $35 per returned item. To avoid returned item fees, it is important to carefully manage your account balance and make sure you have sufficient funds to cover any checks or electronic payments you make.
5. Inactivity Fees
Inactivity fees are fees that are charged to you if you do not use your checking account for a certain period of time. The length of time that must pass before an inactivity fee is charged can vary depending on the bank or credit union you use, but it is typically around 6 to 12 months. Inactivity fees are typically around $5 per month, but they can be higher in some cases. To avoid inactivity fees, it is important to use your checking account regularly, even if it is just to make a small purchase or withdraw a small amount of cash.
6. Account Closure Fees
Some banks and credit unions charge a fee if you close your checking account within a certain period of time after opening it. This fee is typically charged if you close your account within the first 6 to 12 months after opening it and is intended to compensate the bank or credit union for any fees or expenses associated with opening the account. Account closure fees can be quite steep, typically ranging from $25 to $50. To avoid this fee, it is important to carefully review the terms and conditions of your account before opening it and make sure you are comfortable with any fees or penalties that may be associated with closing the account.
7. Check Printing Fees
Some banks and credit unions charge a fee for printing checks for your checking account. This fee can vary depending on the number of checks you need and the type of checks you want, but it is typically around $5 to $10 for a basic set of checks. To avoid check printing fees, you can try using electronic payment methods such as debit cards or online bill pay instead of writing checks.
8. Stop Payment Fees
A stop payment fee is a fee that is charged to you if you request that your bank or credit union stop payment on a check or electronic payment that you have written or authorized. These fees can be quite steep, typically ranging from $30 to $35. To avoid stop payment fees, it is important to carefully manage your account balance and make sure you have sufficient funds to cover any checks or electronic payments you make.
9. Wire Transfer Fees
Wire transfer fees are fees that are charged to you if you request that your bank or credit union transfer funds from your checking account to another account using a wire transfer. These fees can vary depending on the bank or credit union you use and the amount of the transfer, but they are typically around $25 to $35. To avoid wire transfer fees, you can try using alternative methods for transferring funds, such as using a debit card or online bill pay.
10. Foreign Transaction Fees
Foreign transaction fees are fees that are charged to you if you use your checking account to make a purchase or withdraw cash from an ATM while traveling internationally. These fees can be quite steep, typically ranging from 3% to 5% of the transaction amount. To avoid foreign transaction fees, you can try using a credit card or debit card that does not charge these fees or consider opening a checking account with a bank or credit union that does not charge foreign transaction fees.
In summary, it is important to carefully review the terms and conditions of your checking account to understand the fees and penalties that may be associated with it. By understanding these fees and taking steps to avoid them, you can save money and better manage your finances. If you are interested in finding a checking account with low fees and penalties, be sure to click on the offers below to compare options and find the best fit for your needs.
Updated February 13, 2023