It is difficult to operate in today’s world without a bank account, yet the fees charged by many banks may make customers wonder if they would be better off stashing cash in their mattresses.  The best defense against bank fees is knowing what they are and how to avoid them.  Here are ten of the most common:

1. Minimum Balance Fee

Some banks require accounts to have a minimum balance.You may be charged a fee if you don’t meet this requirement.  In some cases, your account may even be closed if you leave it underfunded and unattended. To avoid this, call your bank, ask exactly how much money you need to have in your account, and keep your balance above that minimum.

2. Account Closing Fee

You might be charged a small fee for closing your account at certain banks.  You should ask about account closing fees before you open an account.  If the fees are unreasonable, choose another bank.  Another strategy to avoid this fee is to withdraw all funds from an account, but leave it open. You can open an account elsewhere and treat this one as “closed”. The bank will likely close it on its own after some time at a zero balance. Be sure that your bank doesn’t charge an inactivity fee if you use this option.

3. Inactivity Fee

This is relatively uncommon, but a bank might assess a fee to an account that has been inactive for some time. If this applies to your account, make sure to “check in” at least once a month with a transaction or two. This can be as simple as grabbing $20 from the ATM, or as automatic as getting direct deposit for your paychecks.

4. Lost Debit Card Fee

If you misplace your debit card, many banks will charge you to replace it. This fee is usually worth paying, to give you the convenience of easy on-the go account access and peace of mind knowing that your lost card can’t be used by someone who finds it. Some banks may offer a temporary card at the local branch, foregoing the cost of rush delivery of the replacement. Nothing, however, beats due diligence in keeping track of your card so you don’t lose it in the first place.

5. Foreign Transaction Fee

Most banks will charge a fee for withdrawing cash in another country. There is little you can do to get around this, but you might be able to find a more favorable fee by exchanging your cash elsewhere. Consider visiting a currency exchange institution before your trip to compare the conversion fees. Some banks don’t charge for foreign transactions; if you are a frequent international traveler,  find these banks and do business with them.

6. Paper Statement Fee

It’s 2013, and almost every bank wants to avoid mailing you a paper statement if they can, and they may charge you a fee as an incentive to go paperless.  If you’re a tech-savvy individual, you probably don’t want a paper statement anyway. So, opt out. Every major bank offers this option. Instead of a paper statement, you will receive electronic statements via the bank’s online portal or by email. You’re also doing the environment a favor!

7. Online Bill Pay Fee

Some banks will charge you to use their online bill-paying service. If this is the case, investigate other bill-paying portals or find a bank that offers this service without a charge. You will find that most of your bills can be paid online for free via the billing party’s own website.  Use your debit card and the funds will come directly out of your checking account with no fee.

8. Overdraft Fee

Almost every bank will charge you for an overdraft. Obviously, you should avoid this fee by not spending more than you have. To avoid accidental overdrafts, call and ask your bank to decline transactions on your debit card when the funds are not available. It is possible to set up automatic transfers from savings to cover overdrafts, and many banks offer overdraft protection that is less expensive than the fees for insufficient funds. If you do accidentally overdraw, you may be able to ask your bank for forgiveness once or twice, especially if you have a good banking history with few overdrafts.

9. Insufficient Funds Fee

There is a subtle difference between and overdraft fee and an insufficient funds fee. Both are caused by initiating a transaction for more money than you have in your account.  In the case of an overdraft, the bank pays the item and charges you a fee, leaving your account balance in the negative.  If the bank returns the item (usually a check) without paying it, this activates an insufficient funds fee.  The amount may or may not be the same as for an overdraft, and often there will be an additional returned check fee imposed by the company that had the unpaid check returned.

10. Service Fee

These are small, usually inconsequential fees for various services the bank may offer upon request.  Some fee-based services include statement printouts, stop-payment charges, and checking account reconciliation or research. Some of these fees can be avoided by careful record keeping.  You may also be able to get around these fees by researching online options, such as downloadable statement PDFs. Ask your bank what they will and will not charge you for, and plan accordingly.

11. Returned Deposit Fee

When a check that you have deposited bounces or there is some questionable or missing element on said check, you will likely be assessed a returned deposit fee. Double-check all deposits to be sure that they are properly filled out and signed, and only take checks from people or institutions that you trust.

Keep in mind that there are exceptions to everything on this list.  Any reputable institution will offer you a fee schedule, including the exact details of how fees are charged and how to avoid them.  Take  responsibility for being informed, and you will save your hard-earned cash.

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Featured photo credit: Wall Street sign in lower Manhattan New Yorkvia Shutterstock

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