A bank fee is money your bank charges you for a service, a mistake, or falling below what they require
Banks make money partly from interest on loans, but also by charging you directly. A bank fee is a charge the bank adds to your account for specific reasons: maintaining an account, using certain services, making mistakes, or not keeping enough money on deposit. Unlike interest, which is what the bank pays you for saving money with them, fees are what you pay the bank.
The fee appears as a deduction from your balance. It might be a flat amount (like $12 per month) or tied to an action (like $3 each time you overdraw). Some fees are avoidable if you meet certain conditions—keeping a minimum balance, setting up direct deposit, or using only in-network ATMs. Others are automatic unless you dispute them.
Key Takeaways
- Monthly maintenance fees charge you for the right to hold an account, though many banks waive them if you maintain a minimum balance or receive direct deposits.
- Overdraft fees occur when you spend more than you have, and a single transaction can trigger multiple fees if several payments clear at once.
- ATM fees apply when you withdraw cash from a machine that does not belong to your bank's network, and out-of-network banks may charge you separately.
- Wire transfer fees, foreign transaction fees, and early withdrawal penalties on savings accounts are common charges for specific actions you take.
- You can avoid many fees by reading your account agreement, setting up alerts, and switching banks if your current one charges too much.
Monthly maintenance and account-keeping fees
A monthly maintenance fee (also called a service charge or account fee) is what the bank charges simply for you to have the account open. This fee typically ranges from $5 to $15 per month, though it varies by bank and account type. Checking accounts are more likely to have this fee than savings accounts.
Most banks waive the monthly fee if you meet one or more conditions. Common ways to avoid it include keeping a minimum balance (often $500 to $2,500, depending on the bank), setting up direct deposit of your paycheck, or maintaining a certain number of debit card transactions per month. Some banks waive the fee for customers over 65 or under 18. Read your account agreement or ask your bank directly which conditions apply to your account.
If you are charged a monthly fee and you meet the waiver conditions, contact the bank and ask them to remove it. If you do not meet any waiver condition and the fee is high, consider switching to a bank that does not charge one—many online banks and credit unions offer free checking.
Overdraft fees and insufficient funds charges
An overdraft fee is charged when you try to spend more money than you have in your account. If you write a check, use your debit card, or set up an automatic payment for an amount larger than your balance, the bank may allow the transaction to go through anyway—and then charge you a fee for covering the shortfall. This fee is typically $25 to $35 per transaction.
The danger is that overdraft fees can pile up quickly. If multiple transactions clear on the same day and your account does not have enough to cover all of them, you may be charged a separate overdraft fee for each one. A single day of overspending can result in $75 to $100 in fees. Some banks also charge a daily fee if your account stays negative for more than one day.
You can prevent overdraft fees by setting up account alerts (most banks let you receive a text or email when your balance drops below a certain amount), using your bank's mobile app to check your balance before spending, and linking a savings account or credit line to your checking account so transfers happen automatically if you overdraw. You can also ask your bank to turn off overdraft protection, which means transactions will be declined rather than allowed to go negative—you will not spend money you do not have, and you will not be charged a fee.
ATM fees for out-of-network withdrawals
An ATM fee is charged when you withdraw cash from an automated teller machine that does not belong to your bank's network. Your own bank's ATMs are free. Using another bank's ATM typically costs $2 to $3, charged by the ATM owner. Some banks also charge you an additional $1 to $2 for using an out-of-network machine, so a single withdrawal can cost $3 to $5 total.
The fee is deducted from your account immediately. Over time, frequent out-of-network withdrawals add up—using an out-of-network ATM twice a week can cost $200 to $500 per year. To avoid these fees, use your bank's ATM network (most banks have dozens or hundreds of locations), withdraw cash less often, or switch to a bank with a large ATM network or one that reimburses out-of-network fees. Some online banks and credit unions reimburse ATM fees up to a certain amount each month.
Wire transfer fees and foreign transaction charges
A wire transfer fee is charged when you send money to another person or account outside your bank, usually to a different bank or country. Domestic wire transfers (within the United States) typically cost $15 to $30. International wire transfers cost more—often $30 to $50—because they involve currency conversion and multiple banks. The fee is deducted from the amount you send or charged separately to your account, depending on the bank.
A foreign transaction fee applies when you use your debit or credit card to make a purchase in another country or in a foreign currency. The fee is usually 1% to 3% of the purchase amount. If you buy something for 100 euros and your bank charges 2%, you pay an extra $2 (or the equivalent in dollars). This fee covers the cost of currency conversion and the bank's processing of the international transaction.
To avoid these fees, use your bank's wire transfer service only when necessary, ask if the receiving bank can cover the cost, and use a credit card or debit card with no foreign transaction fees when traveling. Some banks and credit unions market themselves as having low or no foreign fees—compare before you travel internationally.
Savings account penalties and other service fees
A withdrawal penalty or early withdrawal fee applies to certain savings products, particularly certificates of deposit (CDs) and money market accounts. These accounts pay higher interest in exchange for keeping your money there for a set period. If you withdraw the money before that time is up, the bank charges a penalty—often equal to several months of interest. For example, a CD with a six-month penalty might cost you $50 to $100 if you withdraw early.
Other service fees include charges for stopping payment on a check ($25 to $35), requesting a copy of a cancelled check ($5 to $10), closing an account within a short time of opening it ($25 to $50), or having a teller handle a transaction that could be done online or at an ATM. Some banks charge a fee to speak with a human representative by phone, though this is less common.
Read your account agreement or call your bank to understand which fees apply to your specific account. Many of these fees can be negotiated or waived if you have been a customer for a long time or if you maintain a high balance.
How to find out what fees you are being charged
Your bank is required to disclose all fees in a document called the Deposit Account Agreement or Truth in Savings Act disclosure. You can request this document in person, online, or by phone. It lists every fee the bank charges, when it is applied, and the amount. Read it carefully when you open an account and again if you think you are being overcharged.
Check your monthly bank statement for fees. They appear as line items with descriptions like "Monthly Service Charge," "Overdraft Fee," or "ATM Surcharge." If you do not recognize a fee or think it was applied in error, contact your bank immediately. Banks sometimes reverse fees if you ask, especially if it is your first time being charged or if you have a good account history.
Set up account alerts through your bank's app or website so you receive notifications when your balance is low, when a large transaction occurs, or when a fee is charged. This helps you catch problems early and avoid cascading fees.
Frequently Asked Questions
Can a bank charge me a fee without telling me first?
No. Banks must disclose all fees in writing before you open an account, and they must provide a copy of the fee schedule on request. However, they do not need to warn you before charging a fee you have already agreed to. If a fee surprises you, check your account agreement to confirm it was disclosed, then contact the bank to dispute it if you believe it was applied incorrectly.
What should I do if I am charged a fee I did not expect?
Contact your bank as soon as possible. Explain the situation and ask them to reverse the fee. Many banks will do so once, especially if you have a good account history. If they refuse, ask to speak with a supervisor or file a complaint with your state's banking regulator or the Consumer Financial Protection Bureau (CFPB).
Are there banks that do not charge fees?
Yes. Many online banks and credit unions offer free checking accounts with no monthly maintenance fees, no overdraft fees (they simply decline transactions instead), and no ATM fees. In exchange, they may offer fewer physical locations or require you to use their app to manage your account. Compare banks in your area to find one that matches your needs.
If I switch banks, will I be charged a fee?
Most banks do not charge a fee to close an account, but some charge a fee if you close it within a short time of opening it (typically 90 to 180 days). Check the account agreement before you open an account. When you close an account, make sure all automatic payments and direct deposits are moved to your new bank first to avoid overdraft fees.
Can I get a refund for fees I paid in the past?
Banks are not required to refund old fees, but you can ask. If you believe fees were charged in error or if you were not properly informed about them, contact the bank and request a refund. If the bank refuses, you can file a complaint with the CFPB or your state banking regulator, though this does not may provide a refund.