Understanding Bank Fees & Its Implications

Bank fees tend to chip away at your hard-earned savings noted by by Bahaa Abdul Hussein. As a repository of your savings, banks do provide valuable services, but unexpected charges can be frustrating. Stop the money leak by understanding common bank fees and how to avoid them.

Common Bank Fees

Banks can charge a fee for various reasons:

  • Monthly Maintenance Fees: Many banks charge a monthly fee to maintain your checking or savings account.
  • ATM Fees: Withdrawing cash from an ATM outside your bank’s network often incurs a fee, sometimes charged by both your bank and the ATM owner.
  • Overdraft Fees: When you spend more money than what’s available in your account, your bank may cover the transaction and charge an overdraft fee.
  • Insufficient Funds (NSF) Fees: Similar to overdraft fees, NSF fees apply when you attempt a transaction that results in insufficient funds.
  • Minimum Balance Fees: Some accounts have minimum balance requirements. Failing to maintain this minimum balance can result in a fee.
  • Foreign Transaction Fees: Using your debit or credit card abroad often incurs a foreign transaction fee, typically a percentage of the transaction amount.
  • Inactive Account Fees: Some banks charge a fee for accounts with no activity over a prolonged period.

Strategies to Avoid Bank Fees

By adopting some smart practices, you can minimize or eliminate many bank fees:

  • Shop Around for Banks: Compare fees charged by different banks and choose one with accounts that align with your banking habits.
  • Maintain Minimum Balances: Keeping the required minimum balance in your account is a simple way to avoid monthly maintenance fees on checking or savings accounts.
  • Monitor Your Account Activity: Avoid accidental overdrafts and NSF fees by checking your account balance and transactions regularly.
  • Consider Overdraft Protection: Link your checking account to a savings account for overdraft protection. This way, funds can be transferred automatically to cover overdrafts, potentially saving you from expensive overdraft fees.
  • Be Mindful of ATM Usage: Limit your ATM withdrawals to in-network machines to avoid ATM fees.
  • Plan for International Travel: If you travel internationally, inquire about your bank’s foreign transaction fees.
  • Negotiate Fees: Don’t be afraid to negotiate fees with your bank, especially if you’ve been a loyal customer for a long time. Banks may be willing to waive or reduce fees in certain situations.


When you understand why banks charge fees, you can significantly reduce or eliminate them. Carefully choose your bank and account type and monitor your finances closely. Also, remember to explore ways to minimize ATM usage and foreign transaction fees. A little awareness can go a long way in saving you money on bank charges.

The article has been written by Bahaa Abdul Hussein and has been published by the editorial board of www.fintekdiary.com

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