How to Avoid Bank Fees and Keep More of Your Money

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Avoid those pesky bank fees. Stop throwing your money away and keep more of it in your wallet with these tips on how to avoid bank fees.

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One of the last places you would think you're wasting your hard-earned money is the bank. Overdraft fees, minimum balance fees, lost card fees, maintenance fees, and the list goes on. One thing to remember: Don’t pay fees unless absolutely necessary.

Banks charge so many unnecessary fees simply for holding our money. It seems like we can't do much about it because, while I guess you could get by without a bank account for some time, not having one would make things much more difficult.

Bank fees are a common way you're wasting money without even realizing it because they tend to be $7 here or $3 there. In fact, the average cost of checking account fees over a decade totals almost $1,000, according to a recent study. 

It doesn't seem like a lot, but those amounts do add up. Even though some fees can’t be avoided, the good news is that many of them can be if you learn how to avoid bank fees once and for all.

Understanding Common Bank Fees

Whether you've chosen a traditional brick-and-mortar bank or have ventured into the world of online banking, it's important to be familiar with the potential fees that might come your way.

Banks, in their quest to maintain profitability and cover operational costs, levy various charges on services, some of which might catch you off guard.

Here’s an in-depth look at some of these common bank fees and how you might avoid or minimize them:

Account Maintenance Fees

  • Description: Often termed as a monthly service fee, banks charge this for the upkeep and maintenance of your account.
  • Avoidance Tip: Keep an eye on the required minimum balance for your account type. By ensuring that your balance stays above this threshold, you can often sidestep this fee.

ATM Fees

  • Description: When you use ATMs that are not affiliated with your bank, you may face an additional charge.
  • Avoidance Tip: To sidestep this fee, stick to using ATMs that belong to your bank's network. Some banks also partner with other institutions, allowing for fee-free withdrawals, so it's worth checking if your bank offers this perk.

Excessive Transaction Fees

  • Description: Federal regulations typically allow for six free withdrawals or transfers from your savings account per month. Exceeding this limit can lead to a fee.
  • Avoidance Tip: To stay fee-free, plan your savings account withdrawals and transfers judiciously. If you find yourself consistently exceeding the limit, consider switching to a checking account or another banking product that allows for more transactions.

Overdraft Fees

  • Description: When your account balance falls below zero due to a transaction, banks charge an overdraft fee.
  • Avoidance Tip: Consider opting for overdraft protection, which links another account (like a savings account) to cover any shortfalls. Additionally, make use of mobile banking apps and set up low balance alerts. This way, you'll be notified when your balance dips below a certain point, allowing you to deposit funds or curb spending.

Wire Transfer Fee

  • Description: Wire transfers, although fast and efficient, often come with a service charge, especially for international transfers.
  • Avoidance Tip: If you're not in a rush, choose regular bank transfers, which might take a few business days but usually don't incur a fee. Another alternative is setting up direct deposits, which are often fee-free and can also expedite the transfer process for recurrent transactions like salary payments.

By being aware of these fees and taking proactive steps to manage your banking behavior, you can save a significant amount of money over time and make the most of your financial resources.

How To Avoid Bank Fees

Stop throwing your money away and keep more of it in your wallet with these 4 tips to avoid paying those annoying bank fees.

1. Look into a credit union

Banks make their money by overcharging you for their services and loaning money at high-interest rates. This is something you won’t see with credit unions. Although they offer the same type of services, their structures are very different.

There are two key differences between big banks and credit unions that can make credit unions the more favorable choice for banking:

  1. Credit unions are not-for-profit institutions. Unlike banks, credit unions do not pay dividends to shareholders, so their primary goal isn’t to take your money. As described by bank analyst Nancy Bush, “They [customers] treat banking like an electric utility where if you flip the switch it has to be there for you. But the truth is banking is a business that aims to makes profits for shareholders.”
  2. Credit unions are member-focused. The primary purpose of credit unions is to serve their members. These institutions are financial cooperatives, meaning they are owned and operated by their members — you! When you join a credit union, you actually become a partial owner with a say in how the institution is run.

For these reasons, credit unions will not charge the same service fees as banks. As an added bonus, as not-for-profit-institutions, credit unions are exempt from paying state and federal taxes meaning they can offer you better rates on loans and higher interest on savings accounts.

2. Get cash back when you're out

Avoid ATM surcharges by planning ahead and withdrawing cash before you go out. If you're already out, choose the cash back option when you buy something in a store or make a small purchase like a piece of candy to get the cash back. Some banks will reimburse you up to a certain amount in ATM surcharges but why pay to take out your own money in the first place?

We’re living in the digital age where people are constantly on their phones and there’s an app for just about everything even getting cash back for shopping online by sites like Rakuten and Dosh.

Banks are no different. Many financial institutions have apps with a feature that will tell you the location of the nearest branch or ATM for you to withdraw cash. What could be an extra few minutes of travel time could be worth those fees charged for using out-of-network ATMs.

3. Opt-in for electronic statements

Sometimes banks will charge a fee for mailing you paper statements every month. Although the fees are minimal, remember that even small amounts of money can add up. When fees are assessed in small increments, people tend to be less concerned about them which allows banks to cash out big time.

Log in to your bank account and change your settings to receive electronic statements to avoid fees for receiving paper statements by mail.

It saves you money and also helps the environment at the same time — win-win!

4. Opt-out of overdraft protection

In 2010, a law was passed that prohibits banks from charging overdraft fees unless the customer affirmatively consents, or “opts in” to the overdraft protection program. If you want to avoid crazy overdraft fees, decline that overdraft protection. This can get a little confusing and misleading because when you hear “overdraft protection” you think it's a program that will, well, protect you from overdrafting, right?


If you choose to opt-in to overdraft protection, certain banks will actually allow the transaction and then charge you a hefty overdraft fee. With most big U.S. banks charging at least $35 per overdraft, according to a recent Pew research, and this can add up. However, if you do not opt into the program, the transaction will decline when the purchase exceeds your account balance.

This could be a little embarrassing, yes, but you won't be charged any extra fees. If the thought of having to take the walk of shame back to the aisle to return your items really worries you, always keep a little bit of cash on you just in case.


Below are answers to some of the most popular questions on how to avoid various bank fees:

What is a monthly maintenance fee and how can I avoid it?

A monthly maintenance fee is a charge that some financial institutions impose for the upkeep of your account. To avoid this fee, maintain the minimum daily balance required by your bank, sign up for direct deposit, or choose a bank or credit union that does not charge monthly maintenance fees.

How can I avoid ATM fees?

To avoid ATM fees, use ATMs within your bank’s network. Many banks provide a network ATM locator via their bank's mobile app for easy access. Also, consider getting cash back when making a purchase with your debit card at retail stores to avoid additional fees.

What can I do to prevent overdraft fees?

You can avoid overdraft fees by keeping track of your balance to ensure you have enough money to cover your transactions. You may also sign up for overdraft protection or link your checking account to a savings account. Some banks may allow you to set up alerts through their online and mobile banking platforms to notify you when your balance is low.

Can foreign transaction fees be avoided?

Yes, to avoid foreign transaction fees, use a credit card or debit card that doesn't charge for international purchases, or if you're traveling, consider a bank that has low fees for foreign transactions or is part of a global ATM network.

What is an inactivity or dormancy fee and how can I avoid it?

An inactivity or dormancy fee is charged when an account has not had any activity for a certain period, typically at least six months. You can avoid this fee by simply making regular transactions, such as small deposits or withdrawals.

Are there ways to avoid transaction fees, including wire transfer fees?

To avoid transaction fees, you can use your bank's online transfer services, which may be free, instead of wire transfers. For wire transfer fees, look for banks that offer free wire services or only charge a nominal fee. Additionally, some banks may waive these fees for certain account holders or those with a higher average balance.

How can I avoid fees associated with paper statements?

To avoid paper statement fees, opt for online statements. Most banks offer this service for free, and it’s a good way to reduce paper waste and keep your financial information more secure.

What are some common banking fees that many banks charge?

Common banking fees include monthly maintenance fees, ATM fees, overdraft fees, non-sufficient funds (NSF) fees, foreign transaction fees, inactivity fees, wire transfer fees, and paper statement fees. Each bank may have different fees and terms, so it's important to review your bank's fee schedule.

Remember, the best way to avoid fees is to understand your bank's fee structure and maintain your accounts accordingly. It's also beneficial to stay informed about personal finance practices and keep in touch with your bank for any changes in fee policies.

The Bottom Line

Navigating bank fees can be simple with a few smart moves. Keep an eye on your balance to avoid overdraft fees and use ATMs within your bank's network to prevent extra charges. Keep enough money in your account to meet minimum balances and take advantage of direct deposit to bypass monthly fees. Linking your checking to a savings account can also protect you from overdraft charges.

It's also good to get to know your bank's specific fees. Choosing the right account can help you avoid costs like inactivity or foreign transaction fees. And don't forget, talking to a customer service rep could uncover ways to waive some fees. In the end, smart banking choices and a bit of planning can keep those extra charges at bay.

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About the author

Brian Meiggs
Hi, I'm Brian Meiggs! A personal finance expert, entrepreneur, and the founder of My Millennial Guide. My drive is to help others unlock the wealth of freedom and pave the path to financial success. With my bachelor's degree in finance, I help millennials follow the smart money in order to increase their earning potential and start building wealth for the future. I write regularly about side hustles, investing, and general personal finance topics aimed to help anyone earn more, pay off debt, and reach financial freedom. I have been quoted in major publications including Business Insider, Yahoo Finance, NASDAQ, Discover, GoDaddy, BiggerPockets, Fox News,, Quick Sprout, Money Geek, MSN Money and many more!