Bank fees are charges your bank takes from your account for services, account maintenance, or when you break an agreement with them
A bank fee is money the bank removes from your account. It happens when you use certain services, maintain an account that costs the bank money to run, or violate the terms you agreed to when you opened the account. Some fees are one-time charges. Others repeat monthly. Some you can avoid entirely by meeting certain conditions—like keeping a minimum balance or setting up direct deposit.
Banks charge fees because they are businesses. They make money by lending out deposits and charging interest, but they also have costs: staff, buildings, technology, fraud prevention, and regulatory compliance. Fees are how they recover some of those costs from customers, or how they profit from specific services.
The fees you pay depend on the type of account you have, how you use it, and which bank you choose. A checking account at one bank might cost nothing. The same account type at another bank might charge $12 a month. Understanding what fees exist and which ones explore to you is the first step to reducing them.
Key Takeaways
- Monthly maintenance fees, overdraft fees, and ATM fees are the most common charges, but they vary widely between banks and account types.
- Many banks waive monthly fees if you meet conditions like maintaining a minimum balance, receiving direct deposit, or keeping a linked savings account.
- Overdraft fees occur when you spend more than you have, and a single transaction can trigger multiple fees if several charges hit your account at once.
- You can reduce fees by choosing a bank with low or no fees, switching to an online bank, or meeting the conditions your bank sets to waive them.
- Fees are negotiable in some cases—if you have been a customer for years with a good history, your bank may remove or reduce a fee if you ask.
The most common types of bank fees
Monthly maintenance fees (also called account fees or service charges) are the most straightforward. Your bank charges you a flat amount—typically $5 to $15—each month just to keep the account open. Not all banks charge this. Many waive it if you maintain a minimum balance, set up direct deposit, or keep a certain amount in a linked savings account.
Overdraft fees happen when you spend more money than you have in your account. If you write a check for $50 but only have $30, the bank covers the $20 shortfall and charges you a fee—usually $25 to $35 per overdraft. The problem compounds quickly: if three checks clear on the same day and all overdraft your account, you may be charged three separate fees. Some banks also charge a daily fee for staying overdrawn.
ATM fees occur when you withdraw cash from an ATM that does not belong to your bank's network. Your bank charges you $2 to $3 per withdrawal. The ATM operator may charge an additional fee. If you use out-of-network ATMs frequently, these fees add up fast.
Insufficient funds fees (NSF fees) are similar to overdraft fees but explore when a transaction is declined because you do not have enough money. Some banks charge this fee even though the transaction did not go through.
Other fees include wire transfer fees ($15 to $50), foreign transaction fees (1% to 3% of the amount), account closure fees (if you close an account within a certain period), and inactivity fees (if you do not use the account for months).
Why banks charge different fees
Banks set fees based on their business model and target customer. A large national bank with thousands of branches and millions of customers may charge monthly maintenance fees because they have high overhead costs. An online-only bank with no physical branches has lower costs and often charges no monthly fee at all.
Account type matters too. A basic checking account may have no monthly fee, while a premium checking account with extra features (like higher interest rates or travel insurance) may charge $25 or more per month. Savings accounts usually have lower or no fees. Money market accounts and certificates of deposit (CDs) have different fee structures.
Your behavior also determines fees. If you overdraft frequently, you pay overdraft fees. If you use out-of-network ATMs, you pay ATM fees. If you let your account sit unused, you may pay an inactivity fee. Banks use fees to discourage behavior that costs them money or to reward behavior that benefits them (like direct deposit, which brings in stable deposits).
How to find out what fees your bank charges
Your bank is required by law to disclose all fees in writing. You can find this information in several places. The fee schedule is a document your bank must provide when you open an account and upon request. It lists every fee the bank charges, the amount, and the condition that triggers it. Ask for it in person, call the bank, or look for it on the bank's website—usually under "Pricing," "Fees," or "Account Terms."
Your account agreement (also called the terms and conditions) contains fee information but is usually longer and harder to navigate. The fee schedule is shorter and designed specifically to show you costs.
Your monthly statement also shows fees you were actually charged that month. If you see a charge you do not recognize, call the bank and ask what triggered it. This is how you discover fees you did not know existed.
Before you open an account, compare fee schedules from at least two or three banks. A bank with no monthly fee but high overdraft fees might cost you more than a bank with a $5 monthly fee but lower overdraft charges—it depends on how you use the account.
How to reduce or avoid fees
The easiest way to avoid fees is to choose a bank that does not charge them. Many online banks and credit unions offer checking accounts with no monthly maintenance fee, no overdraft fees, and no ATM fees (or they reimburse out-of-network ATM charges). The trade-off is usually fewer physical locations and less in-person service.
If you prefer a traditional bank, you can meet the conditions they set to waive fees. Most banks waive monthly maintenance fees if you maintain a minimum balance—often $500 to $1,500. Some waive fees if you set up direct deposit, keep a linked savings account with a minimum balance, or maintain a certain number of debit card transactions per month. Read your fee schedule to see what your bank offers.
To avoid overdraft fees, keep a buffer in your account—do not spend down to zero. Many banks offer overdraft protection, which links your checking account to a savings account or credit line. If you overdraft, the bank transfers money from the linked account instead of charging a fee. This costs less than an overdraft fee, though the transfer itself may have a small charge.
To avoid ATM fees, use your bank's ATM network. If your bank has few locations near you, choose a bank that is part of a large ATM network or that reimburses out-of-network fees. Some banks reimburse up to $10 or $15 per month in ATM fees.
If you have been charged a fee and believe it was a mistake, or if you have been a customer for years and have a good history, call your bank and ask them to remove or reduce the fee. Banks sometimes waive fees as a courtesy to long-term customers, especially if you have never asked before.
The difference between banks on fees
| Fee Type | Traditional Bank Range | Online Bank Range | Credit Union Range |
|---|---|---|---|
| Monthly maintenance | $0–$15 | $0 | $0–$5 |
| Overdraft | $25–$35 | $0–$15 | $20–$30 |
| Out-of-network ATM | $2–$3 | $0 (reimbursed) | $1–$2 |
| Wire transfer (domestic) | $15–$30 | $0–$15 | $10–$20 |
Online banks typically charge fewer and lower fees because they have lower operating costs. They do not maintain physical branches, so they pass savings to customers. Traditional banks charge more because they maintain buildings and staff. Credit unions often fall between the two, though they vary widely depending on the union's size and membership.
This does not mean online banks are always cheaper. If you need in-person service, a traditional bank may be worth the fees. If you rarely visit a branch and want to minimize costs, an online bank usually wins.
What happens if you cannot pay a fee
If your account balance is low and a fee is charged, you may overdraft as a result. For example, if you have $10 in your account and a $12 monthly maintenance fee is charged, you now have a negative balance. This triggers an overdraft fee on top of the maintenance fee. One fee can cascade into multiple fees, which is why accounts can spiral quickly.
If you cannot pay fees and your account stays negative, the bank may close your account and report you to ChexSystems, a banking history database. This makes it harder to open a new account at another bank. Some banks will not open accounts for people with recent ChexSystems reports.
If this happens to you, you have options. You can dispute the fees with your bank in writing and ask them to remove them. You can contact your state's banking regulator (usually the Department of Financial Services or similar) and file a complaint. Some banks will remove fees if you dispute them, especially if you have a good history or if the fees were triggered by a bank error.
Frequently Asked Questions
Can a bank charge me a fee without telling me first?
No. Banks must disclose all fees in the fee schedule and account agreement before you open an account. However, they can change fees with notice—usually 30 days. Check your statements regularly so you catch new fees when they appear.
What is the difference between an overdraft fee and an NSF fee?
An overdraft fee is charged when the bank covers a transaction that exceeds your balance. An NSF (insufficient funds) fee is charged when the bank declines a transaction because you do not have enough money. Some banks charge both; others charge only one. Check your fee schedule to see which applies to you.
Can I get a fee removed if I call the bank?
Sometimes. If the fee was a mistake, the bank should remove it. If you have been a customer for years with no prior fees, the bank may remove one as a courtesy. If you overdraft regularly, the bank is less likely to remove the fee. It never hurts to ask politely, but do not expect removal if the fee was legitimate.
Are credit unions cheaper than banks?
Often, but not always. Credit unions are member-owned and typically charge lower fees than large national banks. However, some credit unions charge fees comparable to traditional banks. Compare fee schedules before you join. Also note that credit unions may have membership requirements or limited branch networks.
What bank has no fees at all?
Many online banks and some credit unions offer checking accounts with no monthly maintenance fee, no overdraft fees, and no ATM fees. Examples include Ally Bank, Charles Schwab Bank, and various online credit unions, though offerings change. Search for "no-fee checking" and compare current options, as banks update their fee structures regularly.