Personal Finance

Avoid ATM, Checking Account Fees with These Simple Tips

The online checking account might be the panacea to avoiding fees. Many of them are interest bearing, have no monthly maintenance fees and advertise low rates for other fees. For customers not needing brick-and-mortar branches or hard-copy checks, it’s quite the solution. For the rest of us, the quandary remains: how to avoid fees on our account, whether they occur when getting cash, using a debit card or moving money around another way.

Almost all banks charge monthly maintenance fees for checking accounts, but these hidden costs can be avoided in some cases. Maintaining a minimum daily or average balance or setting up a monthly direct deposit of a specific amount can help. Here are other ways to avoid other kinds of fees that we all see from time to time.

ATM Fees – What They Are and How to Avoid Them

Each of the following words has something in common: overdraft, incoming wire transfer, outgoing write transfer, card replacement and ATM. You can tack the word “fee” onto any one of them. In fact, to our chagrin, banks do all the time. Of these common fees, those occurring at the so-called cash machine can be the hardest to avoid. At times, we all find ourselves needing to make a withdrawal, a deposit or even a balance inquiry when an in-network ATM is nowhere to be found.

Customers can be charged by at least two -- and as many as three -- types of ATM fees for one transaction. First of all, the ATM operator will charge you between $1.50 and $3.50 (if it’s a unaffiliated bank) to as much as $10 (if it’s a non-bank ATM operator). Secondly, there will be a $1.50-$3.50 surcharge from your own bank by transacting at an unaffiliated ATM. Thirdly, your bank will charge a flat fee, anywhere from $2 to $7 plus a percentage (typically three) of the amount withdrawn.

There are many ways to avoid these three fees. Most simply, asking your bank for a one-time (or occasional) refund will usually be granted if your account history is near spotless. More seriously, upgrade your checking account into a high-yield checking account or sign on with a brokerage firm instead. As long as you meet a minimum deposit threshold, the bank will often waive surcharges and even reimburse you for fees incurred from another ATM network.

As for avoiding international fees, ask your bank about its relationships with other countries before going on vacation. Bank of America, for example, is a part of the Global ATM Alliance, which would allow customers to grab British Pounds from Barclays without paying either bank for the transaction (while a 3% would remain in place to cover the currency exchange).

Depending on the bank, it may waive its own surcharges as well as reimburse you for fees charged by another ATM network. The one disadvantage is that high-yield accounts often come with monthly service charges unless you meet a minimum deposit requirement, which may be difficult for some consumers to meet. Here is one example that pay dividends at the ATM:

Aside from opening up more accounts, there are also simple tips to stop incurring fees. Be diligent about: making withdrawals from your bank’s ATMs; employ the cash-back option when checking out from some merchants, such as grocery stores; withdraw larger amounts of money from your account on a less frequent basis and store some extra cash at home for that rainy day.

High-yield and No-interest Checking Account Fees

While there are some advantages to opening a high-yield checking account (as described here), consider that there are minimums to open, monthly maintenance fees and APYs offered. Monthly maintenance fees range could reach as high ads $35, and 80% of these accounts had minimums to open of $25 or more. Interest-bearing checking accounts make sense for those of us with high-average balances wanting to access to brick-and-mortar branches.

Overall, the APYs on these interest-bearing checking accounts are fairly low. For example, an APY of 0.01% will only yield $1 a year on a checking account with a $10,000 balance. For better returns, consider opening a high-yield savings account or investing your money with a brokerage.

Checking accounts with the lowest monthly fees or minimums to waive monthly fees do not usually earn interest. Monthly account fees for no-interest checking accounts could be free or cost as much as $15 without the ability to waive them. These accounts are ideal for customers looking for a simple banking experience and like the convenience of a physical location.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.