A bank fee is a nominal fee that is charged to a consumer for a variety of reasons related to account set-up, maintenance and other transactional services.

A bank, and in some cases credit unions, uses these fees to help pay for services and push profits higher. Fees from a bank can be the result of a variety of activities from late payments, yearly account fees and others.

What Do Bank Charge Fees For?

A bank will charge a fee to make a profit and pay for operating expenses. They typically charge fees for the various services they provide.


Fees are encountered for many different reasons, but there are some that are very common and more likely to be charged to customers.


The most common fees are bank account maintenance fees and insufficient funds, or overdraft fees.

Common Bank Fees

The three most common bank fees are:

  • ATM Withdrawal Fees
  • Overdraft Fees
  • Maintenance Fees

ATM withdrawal fees are one of the most common bank fees and one of the fastest-growing fees out there. You’re usually charged an immediate $2.50 to use an ATM that doesn’t belong to your bank. In many cases your own bank will charge you another $1.50. You can be charged up to $4 per ATM withdrawal.


The best way to avoid ATM fees is to stick to using your own bank and ATMs or by getting cash back from stores as you’re not charged the withdrawal fees.


Overdraft fees happen when you spend more than you have in your account. For example, let’s say you have a bill that is $50 but you only have $40 in your account then you’ll be charged the $50 and a $35 overdraft fee. In some cases, you can have multiple payments not clear and you can be charged a few overdraft fees by the bank.


The best way to avoid overdraft fees is to watch your balance and set up a savings account that your checking account can pull from if you overdraft. The easiest way to stop overdrafting is to remove overdraft protection which will auto deny any purchase that will force your account to go negative.


Maintenance fees are a fee that get charged to you to maintain your account. Usually these fees range from a few dollars per month to $12 per month based on the bank.


The best way to avoid account maintenance fees is to meet the terms the banks outline, such as carrying a larger balance or direct deposit.

Other Types of Bank Fees

There are a slew of other bank fees outside of the common ones. It’s best to make sure you review all of the documentation that goes with an account before fully opening one. There may be fees you haven’t heard of that are not on this list.


This list of less common bank fees are:

  • Minimum Balance Fees – a bank may require you to maintain a minimum balance and if you go below that balance they will charge you a fee. This balance can have a very wide range from $25 to over $1,000 depending on the type of account.
  • Returned Deposit Fee – if you deposit a check and that check bounces you can be charged a fee for the bank to return the check.
  • Additional Checks Fees – a bank may charge you if you request additional checks beyond the free ones you get when you sign up. You can expect anywhere from $20-40 per checkbook.
  • Cashier’s Check Fees – a bank will charge you to get a cashier’s check (guaranteed funds) and on average is around $10.
  • Debit Card Transaction Fees – in rare cases you may be charged for using your debit card at a certain location or with a certain merchant. The cost is normally under $1 and often overlooked by many on their statements due to how small it is.
  • Lost Card Fees – you’ll be charged for a new card if you lose yours, around $5.
  • Foreign Transaction Fees – if you buy anything overseas, you can change a foreign transaction fee. It’s usually around 3% of the transaction value.
  • Wire Transfer Fees – a wire transfer lets you send money to someone or receive money, but it does come with a fee. It ranges from $15-30.
  • Savings Withdrawal Fees – you can actually only withdraw 6 times per month from your savings and any more than that you will get a fee. It’s around $15.
  • Inactivity Fees – if you’re not using your account or you leave it open with minimal money you can get charged an inactivity fee around $10 per month. It usually takes around 6 months before any bank will charge this fee.
  • Account Closing Fees – in some cases a bank will charge you a fee to close your account, around $25.

As you can see there are tons of banking fees that can creep up on you and our list isn’t even the biggest list of banking fees! As we said before, you’ll want to review each fee listed in your documents before you sign-up for a bank account.

Tips on How to Avoid Paying Bank Fees

Most bank fees are avoidable, but not all of them are. There are some that just come with normal financial transactions, like buying a house, and others that are more avoidable because they relate to your financial habits.


A majority of Americans pay little or no monthly bank fees and in most cases it comes down to making the right decision as it relates to your bank usage. For example, try to stick to only ATMs that belong to your bank.


Here are some proven tips to avoid banking fees:

  • Utilize free checking and savings accounts.
  • Sign up for direct deposit whenever you can.
  • Always keep a minimum balance.
  • Have more than one account at a single bank.
  • Use only the ATMs provided by your bank.
  • Don’t spend more money than you have.
  • Sign up for email, text and phone alerts for your account usage.