The fees banks charge on checking accounts

Banks make money partly from the interest they earn on your deposits, but they also charge fees for services and for accounts that don't meet certain conditions. The most common fees are a monthly maintenance fee (charged just for having the account open), an overdraft fee (charged when you spend more than you have), and an ATM fee (charged when you use an ATM that doesn't belong to your bank). Other fees exist for things like wire transfers, stopping a check, or replacing a lost debit card, but you only pay those if you use those services.

The amount of each fee varies widely by bank. A monthly maintenance fee might be $5 to $15, or zero. An overdraft fee might be $25 to $35 per transaction. ATM fees from out-of-network machines are often $2 to $3 per withdrawal. Some banks charge nothing for any of these; others charge for all of them. The key is knowing what your specific bank charges before you open an account, because fees add up fast if you're not watching.

Key Takeaways

  • Monthly maintenance fees are charged just for having the account open, but many banks waive them if you keep a minimum balance or set up direct deposit.
  • Overdraft fees are charged each time you spend more money than you have in your account, and a single purchase can trigger multiple fees if several transactions post at once.
  • ATM fees explore when you withdraw cash from a machine that doesn't belong to your bank, so using your bank's ATM network keeps this cost at zero.
  • You can find the full fee schedule on a bank's website or by asking a banker in person before you open an account.

Monthly maintenance fees and how to avoid them

A monthly maintenance fee is a charge just for keeping the account open, whether you use it or not. It's the most straightforward fee because it happens automatically every month. Banks charge this because they have to maintain the account, process statements, and provide customer service.

Most banks will waive this fee if you meet one of a few conditions. The most common is keeping a minimum balance — usually $500 to $1,500, depending on the bank — in your checking account at all times. Another common way to avoid it is setting up direct deposit, which means your paycheck or benefits payment goes straight into your account electronically. Some banks waive the fee if you maintain a certain balance in a savings account with them, or if you have a credit card with them. A few banks charge no monthly fee at all, regardless of balance or direct deposit.

Before opening an account, ask the banker or check the bank's website for the exact conditions. If you're living paycheck to paycheck, a bank with no monthly fee or one that waives it for direct deposit is a better fit than one that requires you to keep $1,500 sitting in the account at all times.

Overdraft fees: what happens when you spend more than you have

An overdraft happens when you spend more money than is in your account. An overdraft fee is charged each time this occurs. If you have $100 in your account and you make a purchase for $120, you've overdrawn by $20, and the bank charges you a fee — typically $25 to $35 — on top of the $20 you already owe.

The tricky part is that overdraft fees can pile up quickly. If you overdraw your account and then make three more purchases before the bank processes them all, you might be charged four separate overdraft fees in a single day, even though you only overspent once. This happens because banks process transactions in batches, often at the end of the day, so multiple purchases can all trigger fees at the same time.

Some banks offer overdraft protection, which links your checking account to a savings account or credit line. If you overdraw, the bank automatically transfers money from the linked account instead of charging a fee. This costs nothing if you use it, but you have to set it up in advance. Other banks let you turn off overdraft protection entirely, which means transactions will straightforward be declined if you don't have enough money — no fee, but also no purchase.

ATM fees and out-of-network withdrawals

An ATM fee is charged when you withdraw cash from an automated teller machine that doesn't belong to your bank. If your bank is Wells Fargo and you use a Bank of America ATM, Bank of America charges you a fee (usually $2 to $3), and sometimes Wells Fargo charges you a fee too. Using your own bank's ATM is always free.

The easiest way to avoid ATM fees is to use only your bank's machines. Before opening an account, check how many ATMs your bank has in your area. If you live in a small town and your bank only has one branch, you might pay a lot in ATM fees. Some banks belong to a shared branching network or ATM network, which means you can use machines from partner banks for free. Credit unions often have access to large networks of free ATMs through CO-OP or Allpoint, even if the credit union itself is small.

If you know you'll need cash often, ask about this before opening an account. A bank with a large ATM network or a credit union with network access might save you money even if it charges a higher monthly maintenance fee.

Less common fees you might encounter

Beyond the three main fees, banks charge for specific services. A wire transfer fee (usually $15 to $30) is charged when you send money electronically to another bank. A stop payment fee (usually $25 to $35) is charged when you ask the bank to cancel a check you've written. A replacement card fee (usually $5 to $15) is charged if you lose your debit card and need a new one. A foreign transaction fee (usually 1% to 3% of the amount) is charged when you use your debit card in another country.

You only pay these fees if you use these services, so they don't affect most people. But if you know you'll need to wire money regularly, or if you travel internationally, ask about these fees when choosing a bank. Some banks waive wire transfer fees for certain account types or if you maintain a high balance.

How to find out what your bank charges

Every bank is required to provide a document called a fee schedule or pricing guide that lists all the fees it charges. You can usually find this on the bank's website by searching for "fee schedule" or "pricing." You can also ask a banker in person or call the customer service number on the back of your debit card.

When you're comparing banks, write down the fees from each one and add them up based on how you think you'll use the account. If you plan to use direct deposit and never overdraw, monthly maintenance fees and overdraft fees don't matter — focus on ATM fees and whether the bank has machines near you. If you're worried about overdrafting, ask whether the bank offers overdraft protection and what it costs.

Some banks advertise "no fee" checking, which usually means no monthly maintenance fee and no overdraft fees (though you still pay for wire transfers and other services). These accounts are worth considering if you're trying to keep costs down, but read the fine print to see what conditions explore.

Frequently Asked Questions

Can a bank charge me multiple overdraft fees in one day?

Yes. If you overdraw your account and then make several purchases before the bank processes them all, you can be charged a separate overdraft fee for each transaction. Some banks have started limiting this to one fee per day, so ask your bank what its policy is.

What's the difference between an overdraft fee and a non-sufficient funds fee?

They're often the same thing — both refer to the fee charged when you don't have enough money in your account. Some banks use the term "overdraft fee" and others use "NSF fee," but they mean the same charge.

Do I have to pay overdraft fees if I turn off overdraft protection?

No. If you turn off overdraft protection, transactions will be declined if you don't have enough money, and you won't be charged a fee. You also won't be able to complete the purchase, so you need to make sure you have enough money before you swipe your card.

Are there banks that don't charge any fees at all?

Some banks and credit unions offer checking accounts with no monthly maintenance fee, no overdraft fees, and no ATM fees (at least within their network). These are less common than they used to be, but they do exist. Online banks are more likely to offer no-fee accounts than traditional brick-and-mortar banks.

If I use an ATM from another bank, who charges me the fee?

Usually both banks charge you a fee — the bank that owns the ATM charges one fee, and your own bank charges another. Some banks don't charge their own customers for out-of-network ATM use, so ask before opening an account.