Bank fees guide: How to stop overpaying and find better banking options

One reason people put money in a bank is to keep it safe. After all, the industry is highly regulated, and FDIC insurance protects deposits from bank failures.

Even so, there’s a way people frequently lose money from their bank accounts: by paying banking fees that could be avoided.

Many bank charges are unnecessary. Sometimes, changing your banking habits can help you avoid fees. Also, with over 4,000 FDIC-insured banks, you have the opportunity of finding one whose fee policies are a good fit for the way you bank.

Knowing what types of bank charges may be eating away at your deposits and how to avoid those charges can make the difference in seeing your account grow instead of shrink.

Types of bank fees

Here are some of the things banks often charge for in savings and checking accounts:

• Monthly maintenance fee. These may also be known as service fees. They’re charged every month just for having the account. Maintenance fees are more common in checking accounts than savings accounts, but the most recent MyBankTracker rate survey found that about a third of savings accounts charge a monthly fee.
• ATM fees. These are fees that are charged when you use an ATM that your bank doesn’t own or isn’t part of a network to which your bank belongs. Often, people are charged two fees when they use an out-of-network ATM: one by their own bank, and one by whoever owns the ATM. These fees may seem relatively small, but as a percentage of the dollar amount of many ATM transactions, they can be quite expensive.
• Overdraft fees. These are fees charged when you try to spend more money than you have in your account. You may also be charged more than one of these fees if you have multiple transactions while your account is overdrafted.
• International transaction fee. These are fees for transactions between your account and a non-U.S. bank.
• Check order fees. If you still use paper checks, you may have to pay a fee when you order new checks.
• Paper statement fees. If you choose to be mailed a paper version of your monthly account statements, some banks will charge you for that service.
• Wire transfer fees. Wire transfers are one way to send money to or receive it from someone else’s bank account. Your bank may charge a fee for sending or receiving wire transfers.
• Inactivity fees. Banks don’t just charge you for your activity in the account; they may also charge you when you don’t use the account. Inactivity fees, also known as dormancy fees, are charged by some banks if you go a certain length of time without initiating any transactions in the account.

Trends in bank fees

Service fees on deposit accounts are a huge profit center for U.S. banks, regularly exceeding $30 billion a year.

A few years ago, pressure from regulators and legislators helped reduce the total amount of fees banks charged their deposit account customers. More recently, though, the cost of those fees has started rising again.

The following graph shows how the total dollar value of fees on deposit accounts has changed in recent years:

After reaching a recent low of $30.292 billion in 2023, fees on deposit accounts rebounded with an increase of 6.11% in 2024 and 8.84% in 2025. Given the size of these fees and the direction the trend is heading, consumers need to take steps to limit how much they pay.

Why bank fees can matter more than interest rates

When advertising their deposit accounts, banks often like to put the focus on the interest rates those banks pay. While that can be important, for the typical account, the fees a bank charges add up to more than the interest it pays. This is especially true for checking accounts.

Checking account fees vs. interest rates

Most checking accounts charge a monthly maintenance fee. Because these accounts are designed to have regular transactions, customers are also more likely to incur activity-related fees. Those include things like overdraft fees and ATM fees.

The MyBankTracker rates survey found that among checking accounts that charge a monthly fee, the average fee is $11.72. That would add up to $140.64 per year in maintenance fees. In contrast, checking accounts generally pay little or no interest. For most customers, those fees are likely to exceed the interest you would earn on a checking account.

So, when choosing a checking account, your priority should be to find one with little or no monthly fees. You should also consider what other fees you’re likely to encounter. The interest rate should be a secondary consideration.

Savings account fees vs. interest rates

Most savings accounts do not charge a monthly fee, and their interest rates are generally more substantial than those on checking accounts. So, interest rates are a more important consideration when choosing a savings account, but you still shouldn’t overlook the fees.

The rate survey found that the average interest rate paid by savings accounts was 2%. Among savings accounts that charge a monthly fee, the average amount of that fee was $6, or $72 per year.

At those averages, if your savings account had an average balance of less than $3,600, the fees you’d pay would exceed the interest you’d earn. So, it’s important to consider both interest rates and fees when choosing a savings account. Fortunately, there are plenty of savings accounts with competitive interest rates and no monthly fees, so finding one of those should be your goal.

When to consider switching banks because of fees

Paying attention to fees before you sign up for an account is important, but the diligence shouldn’t stop there.

Once you have an account up and running, here are some signs that should make you consider switching banks because of fees:

• If the fees you pay in a given month exceed the interest you earned.
• Any time you receive a notice that the bank is raising fees.
• When the bank announces a new fee.
• If the bank changes policies that have allowed you to avoid fees, such as fee waivers for meeting certain deposit conditions or leeway on when an overdraft fee will be charged.

Before choosing, think about how you’ll use (or won’t use) the account

In order to properly evaluate a bank’s fee schedule, you need to think about how you’ll use the account.

For example, most people rarely, if ever, overdraft their accounts. However, a small minority of bank customers tend to overdraft their accounts multiple times per year. If you’re one of those customers who are prone to overdrafts, a bank’s overdraft fees and policies should be a big factor in your choice.

Similarly, with cashless payments becoming the norm, it may be a long time since you’ve used an ATM. On the other hand, if you use one regularly, you’ll want to make sure your bank provides machines that are convenient to your regular travels so you can use them without a fee.

The point is, when you go through a bank’s fee schedule, think about how much each item matters based on how you expect to use the account. This will help you find a bank that best suits your needs.

Strategies for avoiding fees

Paying unnecessary fees can quietly erode your savings over time. Here are several practical ways to minimize or eliminate these charges:

Embrace online banking

Generally speaking, online accounts tend to have lower fees than branch-based accounts. Doing your banking online can also help you avoid paper statement fees, and having online access to your account information can help you avoid overdrafts.

Use direct deposit

Several banks will waive their monthly fee if you arrange to have paychecks or benefits directly deposited into the account.

Focus first on maintenance fees

Most fees depend on how you use the account, but maintenance fees are charged month-in and month-out, no matter how you use it.

Look for user-friendly overdraft policies

If you’re likely to overdraft your account, look for a bank that won’t punish you too much for those mistakes.

There are actually a small number of banks that don’t charge overdraft fees. If one of those doesn’t suit your needs, at least find one with a relatively low fee.

Beyond fees, there are other overdraft policies that can make a big difference. Some banks won’t charge a fee unless you overdraft the account by a threshold amount. Some banks limit the number of fees you can be charged on any given day, even if you have multiple transactions while the account is overdrafted.

Note that regardless of the bank’s policies, having frequent overdrafts is a bad habit. It can mean not having money available when you really need it, and too many overdrafts may cause the bank to cancel your account.

Keep a larger balance in the account

This can help you in a couple of ways. Having more of a cushion in your account balance can help you avoid overdrafts. Also, some banks waive monthly fees if you keep your balance above a certain threshold.

Find an ATM network that suits your needs

Some banks have ATMs in thousands of locations, or belong to a network that does. If you plan on using an ATM regularly, you should favor a bank that has ATMs in convenient locations. Alternatively, some banks reimburse ATM charges, so the location of their machines doesn’t matter.

Use ACH transfers instead of wire transfers

Automated Clearing House, or ACH, transfers are an alternative to wire transfers. They generally take a little longer than wire transfers, but are likely to cost less.

Read the full fee schedule before signing up

You could be hit with a type of fee that you hadn’t even thought of. Reviewing the fee schedule will help you realize how much the account is likely to cost you.

Take the time to balance and understand your bank statements

Going through your bank statement at least once a month can help you avoid overdrafts by having accurate information about your balance. It can also help you spot unexpected fees quickly so you can take action to avoid them in the future.

Don’t wait for fees to chip away at your balance

Bank fees can easily add up to hundreds of dollars. Take action before this whittles down your balance.

The above steps can help you avoid bank fees. The best answer may be to find a bank better suited to your needs.

Frequently asked questions

Which banking fees are the most costly?

This depends on how you use the account. For most customers, monthly maintenance fees are most likely to be the biggest expense. However, for some customers, overdraft fees or even ATM fees can add up to a bigger problem.

Why do banks charge fees for not using an account?

An inactive account can cause a bank to incur expenses without having the opportunity to generate fees.

What account fees should you avoid with savings accounts?

Because they don’t have frequent transactions, maintenance fees are usually the most important fees for savings accounts. Most savings accounts don’t charge a monthly fee, so it shouldn’t be hard to avoid them.