How to avoid bank fees: overdraft, monthly and ATM fees

Start with your statement

Look at your last two or three statements and list every fee. Banks must disclose their fees, so ask for your account’s fee schedule if you don’t have it (FDIC). Once you know what you’re paying, you can work out which fixes below apply to you.

Overdraft and NSF fees

• Debit and ATM overdrafts need your OK. Under federal rules, a bank or credit union can’t charge an overdraft fee on an ATM withdrawal or one-time debit card purchase unless you affirmatively opted in (12 CFR 1005.17).
• You can opt out any time. Contact your bank to cancel the opt-in. It stops future fees on those transactions, though the bank doesn’t have to refund fees already charged (HelpWithMyBank.gov, CFPB).
• Checks and automatic payments are different. Banks can still charge overdraft fees for checks and recurring electronic payments even if you didn’t opt in. If the bank declines one instead, you may pay a non-sufficient funds (NSF) fee, often the same amount, and the merchant may add a returned-payment fee (CFPB).
• Link a backup account. Many banks let you link savings to checking so money moves over automatically if you overdraw. There’s usually a transfer fee, but it’s generally less than an overdraft fee (CFPB).
• Set low-balance alerts so you know before you run short. Ask your bank whether it offers them (FDIC).

Monthly maintenance fees

• Many banks and credit unions skip the monthly fee if you keep a minimum balance or have your paycheck or benefits directly deposited (CFPB).
• Ask about senior, student or basic checking accounts with low minimums (CFPB). Paperless statements may also help waive some fees (FDIC).
• A bank must show you its fees when you open the account and must notify you in writing before it changes them (CFPB). Read those notices.
• An account called “free” can’t charge a monthly service fee or a minimum-balance fee, but it can still charge for things like ATM use, overdrafts and stop payments (CFPB).

ATM fees

Most banks and credit unions don’t charge you to use their own ATMs. When you use another bank’s machine, both the ATM owner and your bank usually charge a fee. Ask which ATMs you can use for free and whether your bank rebates out-of-network ATM fees (CFPB).

Ask for a refund

The FDIC suggests calling your bank to ask whether it will waive fees you’ve been charged, especially if you haven’t had many in the past. If it won’t, ask whether it has an account without the fees you keep paying (FDIC). If you believe you were charged a debit overdraft fee you never agreed to, you can file a complaint with the CFPB (CFPB, submit a complaint).

Switch to a lower-fee account

• No-overdraft accounts. Some banks offer low-fee accounts with no overdraft or NSF fees, such as Bank On certified accounts. “Checkless” debit-card accounts may let you avoid overdraft charges completely (FDIC, FDIC). See the list of Bank On certified accounts.
• Compare credit unions. Use the NCUA locator to find a federally insured credit union near you.
• Check the insurance. Deposits are insured to at least $250,000 at each FDIC-insured bank (FDIC). Federally insured credit unions carry NCUA share insurance, generally up to $250,000 per member in each ownership category (MyCreditUnion.gov).
• Ask the right questions before you open an account: Is there a monthly fee and how do I avoid it? Will I be charged if I spend more than I have? What do ATMs, tellers and alerts cost? Can I pay bills online for free (FDIC)?

Moving accounts? Open the new one first, move direct deposits and automatic payments, then close the old one.

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