We all need a bank account. It’s a necessity in today’s world. However, before initiating the process, it’s important to learn about different accounts. The first – and likely the most important – area of focus should be what it will cost you to have an account at the financial institution.

According to a recent survey, most individuals in the United States pay at least $7.00 each month in banking fees. While this may seem like an exceptionally low amount, there are many fees associated with banks. In this guide, you will learn about the most common fees and how you can avoid paying them. Before continuing, remember, there are some banking fees that must be paid when utilizing the services offered by these financial entities.

bank statement
source: pixabay

Fee #1: Account Maintenance Fee

The account maintenance fee – sometimes referred to as the “service fee” – is the most common fee as it is the amount that is required to ensure that your account at the institution remains open. In short, this provides the bank with money that you pay so that your money may remain within it. While it is true that many banks still offer free checking services, it is not at all as common as it once was.

These fees may be as little as a few dollars each month or several hundred dollars a year. The good news is, many banks have special conditions put into place that will allow you to avoid these fees. Examples include the following:

  1. Maintaining a Minimum Balance
  2. Utilizing Direct Deposit At least Once Monthly
  3. Linking a Checking Account to a Savings Account
  4. Using the Debit Card a Pre-Determined Number of Times each Month
  5. Having More Than One Service Offered by the Bank

When opening a checking account, it is essential that you take the time to read the account agreement provided to you. This will outline the monthly maintenance fee (if required) and what may be done to avoid it (if anything). Also, when you receive notifications from your bank, be sure to read them thoroughly.

In some instances, there may be information about changes associated with policies, procedures, and fees that are charged.

By taking the time to read all of the fine print, you will constantly be in the know and will know exactly how much you will be required in pre-set monthly maintenance fees and other fees charged by the financial institution.

Fee #2: Insufficient Funds Fee

The insufficient funds fee – which is also referred to as the “overdraft fee” – is the second most common fee charged by banks in the United States. This occurs when there is overdraft protection put into place on your account.

Basically, if you pay at a store and enough is not available, the bank will allow you to make the purchase; however, you will be charged an overdraft fee – which typically averages anywhere from $25.00 to $35.00 per transaction – even if you went over by a few cents.

If you make several purchases, the insufficient fee will be charged on each.

In theory, this can be avoided by simply not overdrawing your account; however, mistakes do happen. It is best to simply not go for the overdraft protection on the account.

Sure, if you make a purchase and do not have the funds to make that purchase, the card will be denied and you may face a bit of embarrassment; however, it is much cheaper than having to pay a massive fee for non-sufficient funds.

You should also set up a mobile app alert that warns you when your bank balance drops below a certain level.

In recent weeks, many banks have actually stopped charging these fees; however, not all have. Always read the fine print so you know what to expect if you overdraw.

Fee #3: Minimum Balance Fee

There are banks that charge the minimum balance fee instead of a monthly service fee. The only time this has to be paid is if the balance within the account actually falls below a pre-set amount.

The minimum balance may be as low as $100 or as high as thousands – it all depends on your bank and their requirements. The bank will usually figure out this fee at the end of the month. They will add up the balances you had throughout the month at the end of each day and then divide it by the total number of days in the month. If that average is lower than the minimum balance necessary for the account, the fee will be charged.

The fee for going below the minimum balance may range from a few dollars each month up to around $25.00.

To avoid this fee, simply ensure that the balance consistently stays over the limit.

If the account is interest-bearing, sometimes, you can avoid this fee by switching to an interest-free account.

You may also change banks or switch up the type of account that you have with the bank that you use.

If you are a student, you should convert to a student account. Most student accounts are free checking accounts – which will allow you to avoid most fees.

Fee #4: ATM Out-of-Network Fee

When you sign up for a debit card, read the agreement to see if the bank has an out-of-network fee. Basically, this is a fee that is charged for using an ATM machine of another bank.

Currently, the fee is anywhere from $1.00 to $4.00.

It is highest at the traditional banks out there and the lowest at the online banks. Credit unions charge somewhere in-between.

To avoid these fees, only use the ATM at your bank. You may also make a purchase at a store and get cashback.

Banking online, making payments with your debit card, and using a payment app – such as PayPal or the Venmo app – will help you avoid these fees.

Fee #5: The Paper Statement Fee

In today’s world, most banks send out statements electronically rather than through traditional mail. This is much more cost-efficient for the bank. It also reduced paper, clutter, and waste. It is more easily accessible through electronic means and may be retrieved more quickly if needed in the future.

While you may still receive a paper statement, many banks are starting to charge a fee for this service. In most instances, these fees range from as low as $2.00 to as high as $5.00.

To avoid this fee, you simply opt-out of paper statements and opt-in for electronic statements.

If you require a paper copy, you may easily print the electronic one you received at home with a printer.

Fee #6: The Wire Transfer Fee

If you want to send money from your bank to another person’s bank account, you will likely incur a wire transfer fee. While this is one of the fastest methods of sending money, it is also very expensive. In most instances, it costs anywhere from $10.00 to up to $50.00 to conduct a wire transfer.

On top of that, the recipient may incur a fee when they receive the money. This usually averages around $15.00.

You can avoid this fee by using online banking, a payment app such as PayPal, writing a check, or providing funds to the individual in person.

Fee #7: The Lost Card Fee

If you lost your debit card that was issued by your bank and request a new one, you will likely be charged a lost card fee.

This averages between $5.00 and $10.00.

If you require a rush on the delivery of the new debit card, you may be required to pay an additional fee of up to $30.00.

You can avoid this by keeping track of your card. If you do lose it, go directly to the bank branch to get a new one made.

If you use cash, you may keep the debit card safely at home in a safe. This will reduce the possibility that the card will become lost while you are out and about.


While it may be nearly impossible to avoid fees that are charged by banks, there are methods for successfully avoiding most of these costs. If you do stumble across an issue and a fee arises, either call or visit your bank in person. In some instances, the financial institution will remove certain types of fees from your account. In the worst case, the answer may be “no” and you still have to pay, but it does not hurt to try.

If you are in need of a bank that places its clients first and offers many different services, we encourage you to contact us here at Somerville Bank today.

We place your money as a priority and your satisfaction is our guarantee! You may visit one of our many branches or call us by phone today to speak directly to a banking professional: https://somervillebank.net/locations/