Common Bank Fees and How to Avoid Them

Bank fees are often an unwelcome surprise, catching you off-guard and slowly chipping away at account balances.

While they may seem minor, these fees may quickly add up and may slow progress toward reaching your financial goals. 

Understanding common bank fees and the reasons behind them may help you effectively manage these costs. A few key strategies may also keep fees low. Here’s what you need to know to stay ahead.

Common Bank Fees  

Bank fees vary from one bank to another — however, several fee categories are common across the industry. Some are tied to optional services, while others are triggered based on certain conditions. 

Monthly Maintenance Fees

Monthly maintenance fees are charged by banks to cover the costs associated with maintaining your account. These fees may vary widely depending on the type of account you have, and the services included.

Banks may waive monthly maintenance fees if certain conditions are met, such as maintaining a minimum balance or setting up a direct deposit. To help keep banking as cost-effective as possible, carefully review the account terms to understand the conditions required for waiving monthly maintenance fees. 

Non-Sufficient Funds Fees

Non-sufficient funds (NSF) fees, also known as insufficient funds fees, occur when a transaction exceeds the available balance in your account and the bank chooses not to cover the shortfall. This can happen when a check, automatic draft, or other electronic transaction is presented for payment without enough money in the account to cover it. In addition to the bank fee, the merchant or company you paid may charge you additional bounced check fees and late fees.

Overdraft Fees

Overdraft fees are charged when a transaction exceeds the available balance in your account, and the bank covers the shortfall rather than declining payment. These fees are typically charged per occurrence and can quickly accumulate if multiple transactions are processed before the funds in your account are replenished.

Overdraft protection programs may transfer funds from a linked savings account or line of credit to cover the shortfall, preventing overdraft fees. However, overdraft protection may also result in fees, depending on your bank’s policies.

Out-of-Network ATM Fees

Using an ATM outside your bank’s network often results in out-of-network ATM fees. Both the bank and the ATM operator may levy fees, leading to double charges for a single transaction. To avoid these charges, consider choosing a bank with a large network of bank and partner ATMs and avoid using out-of-network machines whenever possible.

Check Fees

In addition to standard checking account fees, banks may also charge fees associated with paper checks. While you’ll typically receive a few free checks when the account is opened, if you order additional checks through the bank, there’s often a cost involved.  

In addition, depending on the type of account, your bank may charge a fee for each check written or for writing more than a specific number of checks each month. If you do not have an account, the bank may also charge a check-cashing fee. 

Stop Payment Fees

Stop payment fees occur when customers ask their bank not to process a check or pre-authorized electronic payment. Common reasons for a stop payment request include lost or stolen checks, an error in the payment amount, or a dispute with the payee. The fee compensates the bank for the administrative effort involved in halting the transaction. 

Inactivity Fees

Banks may charge an inactivity fee when an account has had no activity, such as deposits, withdrawals, or other transactions, over a set period of time. The fee is intended to encourage customers to actively use their accounts and to offset the costs associated with maintaining accounts that are not actively used. The time frame that triggers this fee and the fee amount can vary widely between institutions, so it’s important to understand your bank’s policies.

Foreign Transaction Fees         

When transactions are made in a foreign currency or processed through a foreign bank, foreign transaction fees may apply. These fees are typically based on a percentage of the transaction amount and cover the cost of converting currency and processing the international transaction.

How To Avoid Bank Fees

While some bank fees are unavoidable, a few practical steps may help reduce or eliminate certain charges. Start with these tips.

Regularly Check Account Statements

Checking all account statements at least once a month can help you catch unexpected fees or discrepancies early. This habit may also allow you to identify patterns in your spending or bank charges that may otherwise go unnoticed. By finding and addressing issues promptly, you may have a chance to address them before they escalate into more costly problems.

Set Up Account Alerts

Text and email alerts are powerful tools for staying informed about your finances. Setting up alerts for low balances, large transactions, or other important account activities allows you to make timely decisions that may help prevent overdrafts and other bank fees.

Link Accounts To Avoid Overdraft Fees

Many banks allow customers to link a savings account, line of credit, or other type of account to their checking accounts to prevent accidental overdrafts. If the checking account balance is insufficient to cover checks or electronic withdrawals, funds are automatically transferred to cover the gap, reducing the likelihood of overdraft fees.

Maintain Minimum Account Balances

Many banks offer fee waivers for accounts that maintain a minimum daily balance. By ensuring account balances do not fall below this threshold, you may avoid unnecessary fees and potentially expensive overdrafts.

Utilize Direct Deposits

Check to see if your bank waives maintenance fees or offers better interest rates for accounts receiving direct deposits. If so, set up direct deposit for your paycheck or other regular income.

Understand and Avoid Foreign Transaction Fees

If you’re planning to travel abroad or send money overseas, learn how your bank handles foreign transactions. Choosing a bank that offers fee-free foreign currency services could potentially lead to significant savings. In addition, consider applying for a credit card that does not charge foreign transaction fees, such as the PNC Cash Unlimited Visa Signature Credit Card.

Also, don't forget to notify your bank before traveling. Otherwise, the bank may flag your credit card or bank account for suspected fraud. This could lead to declined transactions, additional fees, and unnecessary headaches. 

Make Smart Decisions About Bank Fees

Bank fees are often a necessary part of managing your finances. However, with the right approach, you can keep these to a minimum. Take the time to understand your bank’s offerings and select account types and products that align with your financial habits.

Regularly review accounts to spot any overlooked fees and consider how you can adjust banking practices based on what you've learned.

PNC Bank is here to assist. Visit PNC Insights or contact a representative to explore tools and resources that can help you more effectively manage your finances.