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Money in the Bank: Avoiding Excessive Financial Charges

With the banking industry so immersed in the hot mess that is the economy, I’m poring over my statements and rethinking whom I do business with. I hate fees, confusing language, and relentless marketing for services I don’t need. Mostly, I hate fees.

To help sort out my personal banking choices, I spoke with Greg McBride, senior financial analyst for He noted that banks offer different types of accounts and each has its pros and cons, overt fees, and sneaky ones.

“When you’re choosing a particular account, make sure the type of account is a fit for your financial lifestyle,” he told me. By banking smartly, I can escape the dreaded fees, he says. And there are quite a few to look out for.

Avoid the Avoidable
ATM fee
Look first at the most ubiquitous charge. No matter what type of account you use, banks will charge you for using another bank’s cash machine. Such charges have risen over the past decade and now average $1.97 for the bank that operates the machine, plus $1.46 from the user’s bank, McBride says. That’s almost $3.50 for a single withdrawal. If you do that twice a week, you’re wasting almost $30 a month.

To avoid the ATM double-whammy charge, research your bank’s ATM locations. “You’ll never have to make a withdrawal on someone else’s turf,” McBride says. He also recommends using a debit card that gives you a cash-back option to access your money when traveling.

Insufficient funds fee
Bounce a check and you’ll get hit with a monstrous charge. Even with overdraft protection, you’ll be gouged, but at least the bank will cover the amount. You won’t be charged by the business that took your check.

Keep track of your deposits and withdrawals, know how many checks you have out, and keep a buffer amount of money in your account to make sure you’re covered.

You’ll also be charged if you deposit a check into your account that’s returned for insufficient funds. Only accept personal checks from people you know and trust.

Get Wise to the Sneaky Fees
Teller fee
If you have an account known as an “express,” some banks will charge you just for walking up to the teller. This account is for customers who do most of their transactions online or at the ATM. This outrageous charge is less common these days, but make sure your account does not limit the number of free teller visits. A variation on this fee is the surprise charge for writing too many checks.

Maintenance fee
Some banks charge a monthly fee regardless of your balance, while others will ding you only if you drop below a minimum balance or go for a stretch—three months to one year— without activity. Check your bank’s policy if you expect to be out of the country or otherwise uninvolved with your account. Know the minimum balance and maintain it.

Account closed early fee
Yes, some banks will charge you for closing your account early, usually within three to six months. If you’re in transition, choose an account you can close at no cost.

Fees for everyday banking activities
Want to deposit coins? Reconcile a discrepancy? Receive your cancelled checks? Have a document signed by a notary? These are they types of services you might expect banks to provide as a courtesy. Don’t bet on it. If you expect to need such services, look for an account that guarantees in writing you can get them free of charge.

How Free Is Free?
Most banks offer free checking, which means they have no maintenance or activity fees. Still, a free checking account might impose limits that don’t work with your lifestyle, such as a lower maximum cash withdrawal at the ATM.

Just because your checking account is free, that doesn’t mean you won’t be charged ATM or overdraft fees.

The sneaky thing banks forget to mention in their ads: most free checking accounts pay no interest. None. Zilch. Zero. That means you should never let your savings sit idle in a free checking account, McBride says.

“Move the rest of your money to a high-yield online savings account,” he says. “Many have attractive yields.” Right now, what’s considered an attractive yield is just 2.5 percent. But you still want to get that interest … it’s real money! (And McBride notes that inflation is pretty much zero, so 2.5 is attractive. Sort of.)

With 8,300 banks out there, it’s a competitive industry. Banks want your business. Lower fees and better service are two ways they can get it. Community banks and credit unions have better track records when it comes to treating their customers well, McBride says. “Larger banks with market share often have higher fees and less competitive interest rates.”

I’m shopping around for the right bank and the right type of account so I can keep my money instead of handing it over to the bank. The banks are getting enough handouts these days from the government.