Many consumers are totally unaware of the bank fees they are paying each
month. If they
are aware, they may feel there is little they can do regarding those fees.
In actuality, less than a third of all bank accounts come with no fees
at all, and bank accounts
with fees will see those fees continue to rise.
The average fee across the nation for an overdraft charge has reached $34
per transaction. In 2013 alone, banks earned $31.8
billion in overdraft charges. 18% of Americans who overdraft say they overdraw
because the overdraft policies of their bank are extremely confusing or
they were unaware they had overdraft protection.
Unfortunately, overdrafts are simply the tip of the iceberg where bank
fees are concerned. Some of the sneakiest charges associate with your
bank account include the following:
Minimum balance fees: Most bank accounts will have a minimum balance that you are required
to maintain in order to avoid a monthly service charge. Generally speaking,
those accounts with a higher interest rate will come with a larger minimum
balance requirement. Some banks will waive the monthly service charge
for those with frequent, incoming deposits. The fine print of your bank's
services may state a penalty for those who don't meet the minimum
balance requirement or for not receiving direct deposits over the amount of $250.
Overdraft reordered costs: Nearly half of all larger banks "reorder" or "resequence"
checking account transactions. This can mean that instead of one overdraft
charge for a larger amount, the consumer may be hit with four, five or
six overdraft charges for smaller amounts-even though those smaller amounts
actually arrived before the large one. Banks claim they engage in reordering
simply to ensure the "important" expenses, such as a mortgage
payment, go through. In reality they do it to so customers incur greater fees.
Charges for returned mail: If you move and forget to fill out a change-of-address card at your post
office, you could end up paying a bank fee of $5 or more. Banks justify
this charge by saying if your bank statements are sent back as "return
to sender," the bank is only attempting to prevent you from being
a victim of fraud. Consumers who go paperless and receive e-statements
can avoid such charges altogether. Most banks actively encourage their
customers to go paperless because it saves the bank money in postage.
Paying a fee not to overdraft: Bank America premiered a service in 2014, which promised customers who
paid a $4.95 monthly fee, the ability to avoid an overdraft fee. Any time
a customer attempts to spend more than the balance in their account, the
transaction will be declined. If you choose to opt-in to this type of
monthly fee, you are essentially paying the bank for the favor of
not lending you money. To avoid overdraft charges altogether-without paying
a monthly fee-monitor your account activity meticulously. In particular,
pay attention to automatic transfers.
Fees for large deposits: Many banks have begun charging their largest depositors for continually
depositing large amounts. This is the exact opposite of a minimum balance
charge-and may be completely avoidable. If you are a large depositor,
maintain your money in a number of protected, low-expense investments
to avoid large deposit fees from your bank.
Charges for early account closure. 2011 saw the occurrence of the Bank Transfer Day in which hundreds of
thousands of banking customers closed their accounts and joined credit
unions to avoid predatory banking fees. In response, banks added yet another
fee-a fee for early closure. This fee can run from $25 to $50.