8 Common Bank Fees and How to Avoid Them

Bank fees don’t always look expensive in the moment. But a few monthly maintenance fees here or ATM fees there can slowly chip away at your budget. Even small fees can add up faster than many people realize, and before long, you could end up paying hundreds of dollars in extra costs.

The average checking account maintenance fee now costs a record-high $13.51 per month, according to the latest MoneyRates Checking Account Fee Survey. Customers who pay that full amount could spend more than $160 each year just to keep a checking account open. The survey also found that the average combined cost of using an out-of-network ATM has climbed to $4.64 per transaction, making everyday banking even more expensive for many households.^[1]

Fortunately, you have more control over the bank fees you pay than you might expect. The same survey found that nearly one-third of checking accounts charge no monthly maintenance fees at all, especially among online banks and smaller financial institutions.^[1] A little research and a few smart banking habits can go a long way toward helping you avoid unnecessary charges and keep more of your money where it belongs.

Overdraft fees

Overdraft fees happen when your bank lets a transaction go through even though you don’t have enough money in your account to cover the amount. When this occurs, your account balance drops below zero and the bank will likely charge you a penalty fee.

These fees can sneak up on you faster than you might think. Budget missteps or overspending can certainly cause overdrafts. But a delayed paycheck, a forgotten subscription renewal, an automatic bill payment, or an unauthorized transaction could create problems, too. If several transactions hit your account while your balance is in the negative, the costs can snowball quickly. And if you ignore overdraft fees and let your bank balance stay in the negative, overdrafts could even indirectly hurt your credit score.

Many financial institutions reduced or eliminated overdraft fees in recent years.^[2] Some traditional banks, however, still charge $30 or more per overdraft, and those fees can translate to billions of dollars per year for bank customers.^[3] According to the Consumer Financial Protection Bureau (CFPB), large banks collected around $5.8 billion in overdraft and NSF fees in 2023 alone.^[4]

How to avoid overdraft fees

If you’d rather keep overdraft fees out of your budget, the following strategies may help.

• Opt out of overdraft coverage: Your bank or credit union needs your permission to charge overdraft fees on most debit card and ATM transactions. If you opt out, your bank often declines transactions that would overdraw your account instead of charging a fee.^[5]
• Set up low balance alerts: Text or email notifications can warn you when your balance drops below a certain amount so you can take action before an overdraft happens.
• Link your checking to your savings: Some banks will automatically transfer money from a linked savings account when your checking account balance runs low. Depending on the bank, that option might cost less than an overdraft fee, and some banks even offer linked automatic transfers for free.^[6]
• Keep a small cushion in your account: Even a modest buffer can help if a deposit shows up late or a bill posts earlier than you expected.
• Choose a bank with no overdraft fees: Many online banks, credit unions, and fintech companies no longer charge overdraft fees. Some also offer grace periods or small cushions that give customers time to fix a negative balance before a fee kicks in.^[7]

Insufficient funds fees

Insufficient funds (NSF) fees happen when a payment tries to clear your bank account but there isn’t enough money available to cover the amount. Unlike an overdraft, the transaction usually doesn’t go through. But your bank may still charge you a penalty for the declined payment.

NSF fees often happen with checks, automatic bill payments, or electronic transfers. Depending on who you’re paying, you could face additional penalties above the amount your bank charges you. For example, if your rent or utility payment bounces, the company you owe may charge you a late fee and a returned payment fee too.

Some banks stopped charging NSF fees in recent years, but others still impose these penalties. According to the CFPB, the median NSF fee among banks and credit unions that still charge these penalties is $32.^[8]

How to avoid insufficient funds fees

Fortunately, there are several ways to reduce the risk of NSF fees and declined payments.

• Monitor your available balance regularly: Pending transactions and automatic payments can reduce your available balance faster than you expect. But if you check your account activity throughout the month, you may be able to avoid surprise shortfalls.
• Use account alerts: Low-balance alerts can provide an early warning when your account starts running low. That extra notice may give you time to transfer money before your bank declines a payment.
• Keep automatic payments organized: Subscription renewals and recurring bills don’t always hit your account on the same day each month. Keep a bill calendar, even on your smartphone, to keep your budget organized and spot expenses you no longer need.
• Maintain a small buffer in your account: A little extra money in your checking account can give you some breathing room when you need it.
• Choose a bank that doesn’t charge NSF fees: Many online banks and credit unions got rid of NSF fees for customers in recent years. If you find a bank that doesn’t charge NSF fees, it makes it easier to avoid surprise banking costs.

Account maintenance fees

Bank account maintenance fees, sometimes called monthly service fees, are charges some banks assess for simply keeping an account open. Many banks will waive these fees if you meet certain requirements, such as receiving direct deposits or maintaining a minimum account balance. But if you fall short of those requirements, even by a little, a fee could show up on your next statement.

Fortunately, not all banks charge monthly service fees. So depending on where you bank and your priorities in a checking or savings account, you may be able to find a banking solution that doesn’t come with account maintenance fees at all.

How to avoid account maintenance fees

Some banks don’t charge their customers a monthly service fee. However, if your bank does, the tips below may help you avoid them.

• Review your account requirements: Banks don’t all follow the same rules when it comes to fee waivers. Learn your account terms to avoid unnecessary charges.
• Set up direct deposit: Many banks waive monthly maintenance fees for customers who receive qualifying direct deposits into their account each month.
• Maintain the required balance: If your account requires a minimum balance to avoid fees, keep a close eye on your balance. Maintaining the required minimum amount in your account could help you save money.
• Consider a different account: If you’re paying maintenance fees month after month, compare no-fee checking accounts at other banks and credit unions to see if they might be a better option.

ATM fees

ATM fees often happen when you withdraw cash from an ATM outside of your bank’s network. Depending on where you bank and which ATM you use, you may wind up paying more than one fee for a single transaction.

For example, if you stop at a convenience store ATM or use a machine owned by another bank, the ATM operator may charge a surcharge for the transaction. At the same time, your own bank could add an out-of-network ATM fee. As a result, you might pay two separate fees just to access your own money.

According to the latest MoneyRates Checking Account Fee Survey, the average combined cost of using an out-of-network ATM is now $4.64 per transaction. That total includes both your bank’s out-of-network fee and the surcharge the ATM operator charges.^[8] That may not sound like much, but one out-of-network withdrawal per week could cost you more than $240 per year.

How to avoid ATM fees

A little planning often makes it easier to keep ATM fees to a minimum.

• Get cash from your bank whenever possible: Most banks provide ATM locators though their mobile apps or websites that can help you find fee-free ATM machines nearby. If your bank has a branch close to home, you can also skip the ATM altogether and withdraw cash directly from a teller.
• Choose a bank with fee-free ATM access: Some online banks and credit unions will reimburse you for out-of-network ATM fees (up to a point). Others may provide access to larger fee-free ATM networks.
• Withdraw cash less frequently: If you use cash often, consider taking out a larger amount at once to reduce the number of ATM fees you pay.
• Check fees first: ATM operators have to disclose surcharges before you finish a withdrawal. This gives you a chance to cancel the transaction and find a different machine if an ATM fee is high.

Excessive withdrawal fees

Some banks and credit unions charge excessive withdrawal fees when you make too many withdrawals or transfers from a savings account in a single month. These fees were once a lot more common because federal rules used to limit monthly savings account withdrawals and transfers (certain types) to six per month. But that restriction ended in 2020.^[9]

However, even though the Federal Reserve suspended its six-withdrawal-per-month limit years ago, some financial institutions still set their own transaction limits and charge excessive withdrawal fees. As a result, these penalties have not disappeared entirely.

How to avoid excessive withdrawal fees

A few simple changes can help you avoid excessive withdrawal fees if your financial institution still charges them.

• Know your account limits: Review your account terms to see whether your bank limits the number of savings account withdrawals or transfers you can make each month.
• Use your checking account for everyday spending: Frequent purchases and bill payments generally belong in a checking account rather than a savings account.
• Limit unnecessary transfers: Moving money back and forth between accounts too often could trigger fees at some financial institutions. If possible, try to make fewer electronic transfers each month when restrictions apply.

Wire transfer fees

Wire transfer fees apply when you send money electronically from one bank account to another using a wire transfer. People often use wire transfers to move large amounts of money quickly. Unlike many other money transfer services, wire transfers can typically handle transactions of $10,000 or more.^[10]

In general, wire transfers tend to be fast as well. Domestic transfers can sometimes process the same day.^[11] But that speed and convenience comes at a cost. According to Bankrate, outgoing domestic wire transfers typically range from $25 to $30, while international wire transfers can cost $50 or more.^[12]

How to avoid wire transfer fees

Sometimes a wire transfer is the right tool for the job. But if speed isn’t a priority or you don’t need to transfer a large amount of money electronically, the following strategies could help you save money.

• Consider other transfer methods: ACH transfers, payment apps, and other electronic payment services may cost less than a wire transfer.
• Compare fee schedules: Wire transfer fees vary by bank. Reviewing costs ahead of time might help you find a less expensive option.
• Look for fee waivers: Some banks reduce or waive wire transfer fees for certain account holders.

Foreign transaction fees

Foreign transaction fees can apply when you use your debit card outside the United States or make purchases from an international merchant. You may also encounter these fees when you withdraw cash from a foreign ATM.

Many banks charge foreign transaction fees as a percentage of the transaction amount. A common fee amount is around 3%, but exact costs can vary depending on your bank’s policy.^[13]

That fee might sound small, but those charges can grow over the course of a vacation or an international trip. For example, if you spend $2,000 abroad using your debit card and your bank charges a 3% foreign transaction fee, you’ll pay an extra $60 to your bank to cover those purchases.

How to avoid foreign transaction fees

A little planning before you travel can help you keep foreign transaction fees to a minimum.

• Choose an account with no foreign transaction fee: Some banks don’t charge any foreign transaction fees on debit card purchases or international ATM withdrawals. If you travel abroad frequently, having access to a credit card or debit card that doesn’t charge these types of fees matters.
• Review your bank’s travel fees in advance: Before you travel internationally, understand the costs associated with international purchases and ATM withdrawals to minimize unpleasant surprises.
• Watch for international merchants: Some online purchases can trigger foreign transaction fees even from inside the United States.

Account closure fees

Account closure fees are charges some banks assess when customers close a checking or savings account too soon after they open it. Depending on the financial institution, these fees may apply if you close a new account within 180 days or less.^[14]

In some cases, banks use these fees to discourage customers from opening an account just to earn a welcome bonus and then closing it shortly afterward. The exact rules vary by bank, but early account closure fees often range from $5 to $50.^[14]

These fees aren’t as common as overdraft fees or ATM fees. But if you’re planning to switch banks or open an account to earn a bonus, it’s worth checking the account terms first.

How to avoid account closure fees

Even if you want to change banks, it’s usually easy to avoid account closure fees if you follow a few simple steps.

• Review your account terms: Your bank account agreements should explain whether an early account closure fee applies and how long you need to keep your account open to avoid it.
• Wait until the fee period ends: If possible, put off closing your account by a few weeks or months. In some cases, a small delay might save you money.
• Ask your bank about fee waivers: Depending on the situation, your financial institution may be willing to waive the charge if you request a fee waiver.
• Research new accounts carefully: Choosing the right account from the start could reduce the chances that you’ll need to switch banks shortly after you open a new account.

Other bank fees to watch out for

The fees above tend to get the most attention. But depending on your bank and how you use your account, you could run into a few other charges as well. Understanding these fees ahead of time may help you avoid them or reduce their impact on your budget.

• Paper statement fees: Some banks charge a monthly fee if you choose to receive paper statements in the mail. But if you opt out and receive your statements online, you could save money depending on the financial institution.
• Stop payment fees: If you need to cancel a check before it clears or stop a recurring draft, your bank may charge a fee for the request. Depending on the situation, however, you might be able to request a fee waiver.
• Returned deposit fees: If you deposit a check that later bounces, your bank may charge a returned deposit fee. Taking a moment to verify the source of a check before you deposit it might help you avoid these types of charges.
• Cashier’s check fees: Some banks charge a fee if you need a cashier’s check for a large purchase or a security deposit. Depending on your account type, however, your bank might waive the fee.
• Dormant account fees: Leaving a checking or savings account inactive for a long time could trigger a dormant account fee with some banks. So it’s a good idea to monitor old accounts and consider closing ones you no longer use to avoid unnecessary charges.
• Replacement debit card fees: Losing your debit card or requesting expedited shipping for a replacement card might result in an extra fee depending on your bank. To avoid this fee, try your best to keep your debit card in a safe location at all times.
• Foreign currency exchange fees: Some banks charge fees when customers exchange U.S. dollars for another currency. You can compare rates before an upcoming international trip if you want to try to save money on these types of transactions.

Bottom line

Bank fees may be common, but many of them are also avoidable. When you understand which fees your bank charges and when they apply, you can often find real ways to save money over time.

Whether you’re looking for a checking account with fewer fees or simply trying to avoid unnecessary charges on your current account, a few small changes can make a meaningful difference. Even saving $10 or $20 per month in bank fees could leave hundreds of extra dollars in your pocket over the course of a year.

Sources

1. MoneyRates.com. “Checking Account Fees 2026 Survey Shows Higher Fees Can Be Avoided.” https://www.moneyrates.com/research-center/bank-fees/avoid-higher-bank-fee-on-checking-account.htm
2. StLouisFed.org. “Is the Era of Overdraft Fees Over?” https://www.stlouisfed.org/publications/regional-economist/2023/mar/is-era-overdraft-fees-over
3. ConsumerFinance.gov. “Know your overdraft options.” https://www.consumerfinance.gov/consumer-tools/bank-accounts/know-your-overdraft-options/
4. ConsumerFinance.gov. “Overdraft/NSF Revenue in 2023 down more than 50% versus pre-pandemic levels, saving consumers over $6 bill annually.” https://www.consumerfinance.gov/data-research/research-reports/data-spotlight-overdraft-nsf-revenue-in-2023-down-more-than-50-versus-pre-pandemic-levels-saving-consumers-over-6-billion-annually/
5. ConsumerFinance.gov. “What can I do if my bank charged me a fee for overdrawing my account?” https://www.consumerfinance.gov/ask-cfpb/what-can-i-do-if-my-bank-charged-me-a-fee-for-overdrawing-my-account-en-1037/
6. Centier.com. “6 Benefits of Linking Your Checking and Savings Accounts.” https://www.centier.com/resources/articles/article-details/6-benefits-of-linking-your-checking-and-savings-accounts
7. NerdWallet.com. “Overdraft Fees 2026: Compare What Banks Charge.” https://www.nerdwallet.com/banking/learn/overdraft-fees-what-banks-charge
8. ConsumerFinance.gov. “Overdraft and Nonsufficient Fund Fees.” https://files.consumerfinance.gov/f/documents/cfpb_overdraft-nsf-report_2023-12.pdf
9. SoFi.com. “What Are Excessive Transaction Fees?” https://www.sofi.com/learn/content/excessive-transaction-fee/
10. CitizensBank.com. “What is a wire transfer and how does it work?” https://www.citizensbank.com/learning/what-is-a-wire-transfer.aspx
11. WellsFargo.com. “The ins and outs of wire transfers.” https://www.wellsfargo.com/financial-education/basic-finances/manage-money/payments/ins-outs-transfers/
12. Bankrate.com. “How much are wire transfer fees?” https://www.bankrate.com/banking/wire-transfer-fees/
13. NerdWallet.com. “What Banks Charge for Debit Foreign Transaction Fees.” https://www.nerdwallet.com/banking/learn/foreign-atm-and-debit-card-transaction-fees-by-bank
14. Bankrate.com. “Early account closure fees at top banks.” https://www.bankrate.com/banking/early-account-closure-fees-top-banks/

About the author

Michelle Lambright Black is a nationally recognized credit expert with two decades of experience. She is the founder of CreditWriter.com, an online credit education resource and community that helps busy moms learn how to build good credit and a strong financial plan that they can leverage to their advantage. Michelle's work has been published thousands of times by FICO, Experian, Forbes, Bankrate, MarketWatch, Parents, U.S. News & World Report, and many other outlets. You can connect with Michelle on Twitter (@MichelleLBlack) and Instagram (@CreditWriter).