Your Team

You are leaving Breadbox.

Maecenas sed diam eget risus varius blandit sit amet non magna. Curabitur blandit tempus porttitor.

/

Banking Charges and Fees

woman at ATM machine

Banking Charges and Fees

Most banks charge fees, it's just how they operate. But no one wants to be surprised by an unexpected fee. Learn about some common banking charges and fees and how to minimize them, if not completely avoid them.

You Are Logged Out

Your progress won't be saved until you create an account.

What banking fees and charges should I be aware of?

Please rotate your device for the best experience.

Transcript

Banking Charges and Fees

Interactive Video

[A woman inserting her card into an ATM machine.]

Narrator: Banks charge all kinds of fees for one very simple reason, to make money. [Cash comes in from all sides and creates piles next to the bank.] Revenue from fees helps banks keep their operating costs low. [Cash goes into the bank.] After all, banks are businesses and need to cover the costs of the services they provide. [A gear with a dollar sign in the middle is shown with arrows circling it and is labeled “operating costs low.”]

[An advertisement from Bank Life: “Open a free checking account with Bank Life. Visit banklife.com/livefree to learn more.”]

Even if something is advertised as free, chances are fees are built into the account someplace to cover the bank’s costs. 

[A man with his hands on his face looking perplexed with a thought bubble that says, “bank fees…”]

But don’t be discouraged by fees. Remember: Financial institutions are a great way to protect and grow your money.

[A woman in thought with a finger on her chin.]

You just have some choices to make. You need to ask yourself: What services do I want? What am I willing to pay for? And what are some ways to avoid fees?

[A computer screen shows an online bank account. The prompt on the computer says, “What type of bank account do you want to open?”]

Some fees are built into the account you select; [a cursor selects “Account Types” and then “Checking” on the laptop screen] they are normally charged monthly, and money is deducted directly from your account. [Coins move from the word “Checking” to an image of a bank with a calendar.]

[The words “bank fees” appear on screen.]

These fees can be charged if you don’t maintain a minimum balance or if you close an account too soon after opening it. A bank may even charge a dormancy fee if you don’t use your account for a long time. 

[Picture of a woman inserting her card into an ATM machine.]

A bank also may charge a fee for services you request. The fees are charged when you do something such as use an ATM outside the bank’s network. Some banks even charge a fee if you visit the teller in a bank branch instead of using an ATM, because they want you to use the self-service options they provide. [A woman using a self-service ATM machine outside of the bank appears labeled “no fees.” A woman inside the bank getting cash from a bank teller appears labeled “fees.” 

[A man holding a laptop with one hand and typing with the other.]

Researching fees is one part of selecting the right bank account for your needs. Think about your money goals and priorities—they can help  you diminish banking expenses. 

[Picture of a couple sitting on the couch looking at papers and working in a notebook.]

Read all the documentation you can find about the account types you’re interested in. Your goal is to find a bank that charges the fewest fees at the lowest amounts, with little to no balance or transaction minimums and the most no-cost convenience factors such as free ATM or point-of sale (POS) use. [The list appears: few fees, low fees; little to no minimums; most no-cost convenience factors.]

[Onscreen Text]: Be on the lookout for accounts with these types of fess. Select each card.

Card 1: a required minimum balance (unless you get a better interest rate)

Card 2: a maximum number of transactions in a month

Card 3: debit or credit card, point-of-sale transactions

Card 4: monthly maintenance—essentially a charge for keeping the account open

Card 5: closing an account or not using an account for several months

[A woman working on her computer.]

Don’t kid yourself, though. It’s rare to find a bank that doesn’t have some fees. 

[The outside of a bank.]

Fees are usually charged for: 

  • Using an ATM outside the bank’s network [An ATM machine appears with the label “outside network fee.”]
  • Having insufficient funds in an account to pay a check or other debit (also called an overdraft fee) [A declined payment appears with the label “overdraft fee.”]
  • Replacing a lost debit, credit, or ATM card, or [Three credit cards appear with the label “lost card fee.”]
  • Canceling a check [A check with a “no” symbol over it appears with the label “canceled check fee.”]

Online banks and credit unions tend to charge the fewest and lowest fees.

Glossary

Automated Teller Machine (ATM)

machine that allows bank customers to deposit or withdraw money without a teller’s assistance

balance

the current amount of money in an account or owed to a credit account

compound interest

when the interest on an account is added back into the loan or deposit, making the original amount larger—causing the amount in the account to grow faster each time interest is added

dormancy fee

a charge to a bank account for six months or more of inactivity; designed to motivate customers to keep accounts active and avoid forfeiture of money on inactive accounts

insufficient funds

when an account lacks the money needed to cover transactions

interest

a fee received (when money is saved) or paid (when money is borrowed) for the use of money

overdraft

a negative balance in a bank account caused by spending more money than is available

point-of-sale fee (POS)

an additional charge added to a bill for using a non-cash payment option, such as a debit card

revenue

money earned from sales