Nothing is for free these days. Fees and surcharges seem to be an unavoidable part of banking with big businesses. If you keep a generally stable and simple financial situation, you can avoid some of the most common bank fees, but there are always a few that might slip past you. You could increase your fee-avoidance ability by keeping your money outside of the banking and investing system, but most people can’t handle keeping their cash locked in a safe in a hidden painting in their bedroom. Even the most frugal minds and penny pinchers can find themselves faced with frustrating banking fees. The fees that tend to lurk behind those emails you decided aren’t worth reading, and the privacy agreement updates for your bank account.
Believe it or not there are purposes for those bank fees that just seem to pop up in your bank account. The first, like any other institution or business, is to increase profits. The second purpose for banks to impose these fees is to create the kind of customers they want to have by modifying their behavior. If a fee is stated up front, customers will try to avoid that situation at all costs. Banks having fees are like gas stations raising their prices. Unless you are willing to hang up your keys and walk to work, you really have no choice. Banks charge fees because they know the majority of their customers won’t close their accounts and take their financial matters in their own hands.
Here are the five most frustrating banking fees that you should avoid:
- Human teller fee. Online banking customers are most likely to get socked with this bank fee. When you use online paperless statements, make deposits, or withdraw money at ATMs the account is free. When you use a teller, be prepared for up to $10 in monthly maintenance fees.
- Returned mail fee. Consider going paperless because some banks will charge between $5 and $6 for a bank envelope that is returned to them. This triggers their fraud system, which puts more bodies on the non-existent issue.
- Charges for redeeming rewards points. Some banks are starting to charge customers who redeem credit or debit card rewards points. These are mostly “handling” fees through which some charge around $4, plus a yearly program fee. Shop around so you can save money on fewer fees.
- Early account closure fees. Make sure when you settle on a bank, that you are capable of keeping that account open for at least 180 days. Banks began imposing these fees as a headache after people started moving their accounts too often. Early account closing fees are generally taken between 90-180 days after opening a new bank account. These charges are around $25.
- Cash deposit fees. Some big banks are charging customers who deposit lots of cash. Large cash deposits require more manpower to file reports that comply with anti-money-laundering rules. One major bank charges 20 cents per $100 after the first $10,000. Keep your cash deposits low to avoid these fees.
Small banks have lower overhead than big banks, translating into fewer bank fees. And credit unions don’t have to pay a portion of their profits to shareholders, giving them leeway to keep fees low.
