Banking Account Fees: Sometimes hidden, mostly expectable
Banking account fees have been the subject of much warning, debate, and ridicule over the years. As the banking industry has continued to grow in the US, you have a variety of regional, local, or even sometimes national banks that are trying to outdo each other.
The way they make their money: bank account fees.
Fees can come in all styles. To a certain extent it’s a politics game that banks play, masking their fees with fine print, misleading sales pitches, and dishonest sales people.
Although there’s virtually any number of fees that your bank can assess you for any given reason, there are a few straightforward, common ones. For example, if you take out a checking account with a major bank, they’re likely going to charge you a monthly fee. Most of the time these fees are small, falling in the $9-20 range, but in today’s industry you don’t even need to settle for something like that.
Regional and local banks or credit unions tend to forego such fees. They want local business, so they even sometimes allow you to sign up with no fees.
That’s where more secretive fees come into play.
It’s sort of a no-brainer that banks charge over-withdrawal fees. If you accidentally spend up more than what’s in your account, you’re looking at a fine from anywhere from $20-$50 depending on the bank. Similarly, there might even be a bounced-check fee that’s a higher penalty.
If you use your card at an ATM for another bank, you’re going to get a double-fee. And that’s something most people overlook. The ATM’s going to charge you a fee flat-out for using a machine that’s not on your network. But then a few days later when the charge goes through on your account, your bank is also going to charge you a fee for using a foreign ATM. Usually, these are only between $2-4 but it also means that you end up spending $5-10 just to take money out of your own account.
None of these fees are secretive and most people who have a checking account are aware of this.
However, if you also have a savings account, you might want to look at the fine print. Most savings accounts are set up in such a way that they need to have a minimum balance. If you go below this balance, you get a fee that’s usually some kind of flat-rate. Similarly, if you have a savings account, you’re only allowed to withdraw from it a certain amount of times per month. If you go above this amount, you’re going to face some kind of fee and you might even have your savings account aborted all together and converted into your checking account.
Because there’s controversy surrounding overdrafts on some checking accounts (specifically those which are linked to a savings account through the same bank) there’s new legislation that goes into effect this year preventing banks from charging certain fees or block you from linking your checking and savings account.
Similarly, this new legislation bars some forms of maintenance fees, upkeep fees, and annual fees. Whereas an annual fee is common with a credit card, and there are some monthly fees imposed on checking accounts, additional annual fees are mostly done away with.
Some banks might charge to use their online service. In other words, you’ll have to pay to access your account online. However, this has become increasingly less common over the years and isn’t something you’re bound to find, necessarily.
The bottom line is that if you have an account with any major bank you’re likely going to experience at least a monthly fee on a checking account and you’re lined up to deal with fees serving as penalties for not following their guidelines. It’s worth it to make sure you fully understand this from the beginning before you get involved with a certain bank.
