You might not know this, but your bank is most likely charging you fees you don’t even know exist. Banks aren’t always upfront with every fee they charge, which can cost YOU a lot of money. Don’t believe me? Check out these five common fees your bank charges but probably doesn’t tell you about.
Before we go any further, here’s a list of the common types of bank accounts you can open. The banks charge fees on these accounts.
- Checking accounts, also known as current accounts: This is where your day-to-day transactions take place. It might be where your paycheck is deposited, where your bills are paid, and where you keep money you need right away.
- Savings accounts: This is where you can deposit money that you want to save. It’s a safe for money that you don’t need right now but want to keep on hand in case you need it.
Account Management Fees
These are fees banks charge you for managing your assets. Banks charged account maintenance fees on both checking and savings accounts. Banks sometimes waive these fees for some accounts to attract new customers or if you are using many of the bank’s services.
If you withdraw from your bank ATM, there are no fees charged. Your bank may also have agreements with other ATM providers to treat your money the same way. Other than that, you will have to pay your ATM to withdraw cash and sometimes your bank will charge you for using another ATM which isn’t theirs. This is very common if you travel a lot and your bank doesn’t exist in areas you have visited.
Foreign Transaction Fees
This is a fee normally charged when a transaction forces a currency conversion. These are normally charged when shopping online from another country that uses a different currency. The fee is typically 1-3% of the value of the transaction.
This is a fee your bank charges when you spend more money than you have in your bank account, usually your checking account. Some banks, however, would rather decline a transaction that would result in an overdraft.
Closing Account Charge
Normally, if you apply to close your account 14 days after being opened, you will attract account closing charges. The amount of this charge normally depends on a bank’s discretion. This cost is intended to deter consumers from opening bank accounts merely to take advantage of new-customer promotions.
- Card Replacement
- Dormancy on Account
- Balance inquiry over the Counter
- SMS/email Alerts
- Internet Banking (Monthly charge)
How to avoid unnecessary bank fees
Most of these fees banks charge are avoidable, and here are some tips for doing so:
- Take advantage of checkings and savings accounts that do not come with account maintenance fees. Many banks have such offers to attract more customers.
- Keep a minimum balance in your account to avoid accidental overdrafts. Also, avoid spending more than what you have.
- Use only your bank’s ATMs or those your banks has a relationship with. This will hep you avoid ATM fees.
Banking is complicated, and fees don’t make it any easier. Your bank could charge you dozens of fees that you don’t know about. Listed above are examples of the most common and how to avoid them.