Five banking fees that can catch you off guard

Overdraft fees

Overdraft fees arguably can be the most damaging to the health of your bank account. An overdraft fee occurs when a transaction is processed in your account, but you don’t have enough money to pay for it. Instead of declining the payment, banks will authorize it and then charge you an additional fee. Most major financial institutions charge about $35 per overdraft charge. If your account remains negative, banks may charge additional fees.

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To avoid overdraft fees, see if you can link an additional account, like a savings account, for overdraft protection. Then, if a transaction causes your account to drop below zero, funds will automatically transfer over from the linked account. This way, the transaction won’t bring your checking account into the red. However, be careful overusing overdraft protection. You can get charged additional fees for overdraft protection, typically $10 to $13 per transfer. This is better than getting hit with a $35 overdraft fee, but overdraft protection fees can quickly add up. If you are frequently getting hit with overdraft fees, pay closer attention to transactions, and track your balance.

Minimum account balance fees

Some banks require you to maintain a minimum account balance. If an account dips below a certain amount, then your bank will charge you a fee at the end of your monthly cycle. For banks that require a minimum balance, it can range from $300 to $500. Accounts that don’t maintain the monthly minimum can get hit with fees ranging from $4 to $25. If you want to avoid minimum account balance fees, many banks offer free accounts that do not require a minimum balance. Browse your banking options thoroughly to find the right match.

Out-of-network ATM fees

Out-of-network ATM withdrawals tack on additional fees. On average, they charge an additional $2.50 per transaction. If your bank isn’t accessible and you need quick cash, repeated visits can quickly siphon money out of your account. The next time you visit an out-of-network ATM consider taking more money than you need. You can avoid multiple fees by limiting the number transactions. You can also get cash back by using a debit card, after you check out at a register.

Wire transfer fees

Sending money to relatives and loved ones can be difficult and in many cases, you may resort to using a wire transfer. A wire transfer is a way to electronically transfer funds from one bank account to another bank account. You can use this to send money domestically and internationally. When you send money, be prepared for a hefty cost. Wire transfers can cost up to $50 per transfer. If a wire transfer is your only option, then you might have to accept this substantial cost. However, there are several money transfer applications that allow you to send money for a fraction of the cost. Check if applications like Zelle or Venmo will work before resorting to a wire transfer.

Early account closing fees

If you are dissatisfied with your new banking institution, review your bank’s policies before closing your account. Banks typically have an early account closing fee if your account is closed before a specific timeline. The timeline can range from 90 to 180 days and varies by institution. The early closure fee is usually between $5 to $50. This fee is easily avoidable if you can keep your account open until the timeline has elapsed.

If your bank account fees and other obligations have negatively impacted your financial health, learn how to recover from a financial setback. Stay on top of your financial health with more budgeting tips.