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Westend61/Getty Images September 27, 2022 Checkmark Bankrate logo How is this page expert verified? At Bankrate, we take the accuracy of our content seriously. "Expert verified" means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced. Their reviews hold us accountable for publishing high-quality and trustworthy content. Matthew Goldberg is a consumer banking reporter at Bankrate. Matthew has been in financial services for more than a decade, in banking and insurance. Brian Beers is the managing editor for the Wealth team at Bankrate. He oversees editorial coverage of banking, investing, the economy and all things money. Robert R. Johnson, Ph.D., CFA, CAIA, is a professor of finance at Creighton University and chairman and CEO of Economic Index Associates, LLC. Bankrate logo The Bankrate promise
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Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our banking reporters and editors focus on the points consumers care about most — the best banks, latest rates, different types of accounts, money-saving tips and more — so you can feel confident as you’re managing your money. Bankrate logo Editorial integrity
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Checking account fees may be charged by banks when customers make certain transactions or fail to maintain a set minimum balance. These fees can add up, but fortunately many of them are also avoidable. Checking account fees to watch out for include overdraft fees, ATM fees and monthly service fees. Here we’ll take a look at these fees in more depth, including the average amount banks charge for each and the best ways to avoid having to pay them. Overdraft and NSF fees
Overdraft fees and nonsufficient funds (NSF) fees can be some of the most expensive bank fees. Overdraft fees may be charged by a bank when it temporarily covers transactions that overdraw your account, thereby allowing them to take place. NSF fees may be imposed when the bank denies payments or the cashing of checks that would result in a negative balance. The average overdraft fee is $29.80 and the average NSF fee is $26.58, according to Bankrate’s 2022 . These fees are as banks face pressure from consumer advocates to curb them, yet fees for overdrafts and nonsufficient funds are still imposed by 96 percent and 87 percent of bank accounts, respectively. Here are some ways to avoid overdraft and NSF fees: Set up low-balance alerts. Many banks allow you to sign up for text alerts when your balance falls below a certain amount. Getting such a text may be enough to keep you from swiping your debit card to avoid overdrawing your account. Check your balance frequently. Check your bank app before you use your . Seeing the balance may help you avoid overdrawing your account. However, be aware of transactions that aren’t yet pending, such as an upcoming subscription charge. Once they post, these transactions could cause an overdraft. Find an account that doesn’t charge overdraft fees. These include accounts from Capital One, Ally Bank and Alliant Credit Union, as well as those from like Chime, Current and Varo. Consider overdraft protection. links a line of credit or a savings account to your checking account to cover overdrafts. You may pay a fee for the service, but it’s often cheaper than paying an overdraft fee. Federal regulations require banks to let customers opt out of overdraft on debit cards. For some people, having their debit card declined when they don’t have the money to cover a purchase is preferable to incurring a string of overdraft fees. ATM fees
Using an ATM outside of your bank’s network could cost you both a surcharge from the owner of the ATM and a fee from your own financial institution. The total combined fee is an average of $4.66 in Bankrate’s latest study — the highest amount since 2019. To avoid ATM fees, here are some steps you can take: Locate and use an in-network ATM. Many mobile banking apps have ATM locators that can help you find a nearby fee-free ATM. Get cash back at the register. As an alternative to an ATM, get cash back when you make a purchase at a drugstore, grocery store or other retailer Monthly service fees
Service fees, or maintenance fees, are usually billed on a monthly basis. Often, a bank will waive this fee if you keep at least a set minimum balance in your account. Among noninterest checking accounts that charge this fee, the average is $5.44, according to Bankrate’s 2022 study — which reflects a 7 percent increase from last year. Here are some ways to avoid monthly service fees: Find a bank that doesn’t charge service fees. Online banks are a good place to start looking for accounts that don’t have a monthly service fee. Service fees may be avoided by using direct deposit. Some banks allow you to waive the fee with a direct deposit into your account every monthly statement cycle. The direct deposit may have to meet or exceed a certain amount. They may also be avoided by using your debit card. You might be able to waive the monthly maintenance fee by using your debit card a certain minimum number of times during the monthly statement cycle. Why are some checking account fees rising
Fees tend to rise just like the cost of other goods and services. Like any business, a bank may try to generate revenue through fee increases — especially in a low-rate environment. “Volatile interest rates in the past two decades have led banks to a greater reliance on fee income which can be more stable than interest income from lending,” says Greg McBride, CFA, Bankrate chief financial analyst. “Entire business lines such as wealth management can provide a steady stream of non-interest income for financial institutions. Higher monthly account maintenance fees, higher balances to avoid the fees, and increasing ATM fees are examples that checking account customers may confront.” The don’t charge maintenance fees and or require a minimum balance. In all, 99 percent of noninterest checking accounts either don’t charge a fee or have one that’s easy to avoid, such as by meeting a direct deposit requirement. Bottom line
Having a checking account that charges you absolutely no fees is often possible, especially when you know what it takes to avoid charges for account maintenance, ATM use and overdrafts. — Bankrate’s contributed to an update of this story. SHARE: Matthew Goldberg is a consumer banking reporter at Bankrate. Matthew has been in financial services for more than a decade, in banking and insurance. Brian Beers is the managing editor for the Wealth team at Bankrate. He oversees editorial coverage of banking, investing, the economy and all things money. Robert R. Johnson, Ph.D., CFA, CAIA, is a professor of finance at Creighton University and chairman and CEO of Economic Index Associates, LLC.