May 29, 2017, 1:23 pm

10 Most Common Hidden Costs and Fees at Banks

by: The Financial Blogger    Category: Banks and You
email this postEmail This Post Print This PostPrint This Post Post a CommentPost a Comment

It’s no secret that traditional brick-and-mortar banks are notorious for hidden and not-so-hidden costs and fees associated with their accounts and services. As a consumer, the best thing you can do is to remain knowledgeable about what these fees are and how you can avoid them. Here, we’ve collected a brief list of some of the most common costs and fees that account holders are faced with. Keep it handy the next time you’re looking to open a bank account or navigate the current fees you may be dealing with.

  1. Foreign Exchange Fees

While people are aware that there are fees associated with international wire transfers, they are seldom aware that most banks charge a fee or markup with every foreign exchange you make. These fees may be hidden under terminology like “service fees,” but ultimately, they’re just a markup that the bank is passing along to their customers.

  1. Foreign Transaction Fees

Often, credit and debit cards through traditional banking institutions have foreign transaction fees built into their setup. This fee applies every time you use your card, which makes a small foreign transaction fee, traditionally around 3%, really add up.

  1. Account Closure Fees

A lot of traditional banks require that you keep your account with them open for a certain period before closing it down. If you should choose to close your account early, you may be subject to an account closure fee. For example, Citibank charges $25 for an early account closure within 90 days of opening a new account with their institution.

  1. Maintenance Fees

Some banks have a monthly or annual maintenance fee that they charge depending on your account balance. In some cases, this fee is waived if a certain amount of direct deposits has been made into that account over a given time. Otherwise, this fee exists solely for the purpose of keeping your account open. This may seem unreasonable, especially when there are many banking options, both traditional and online-only, that don’t charge you for merely having an account with them.

  1. Returned Deposit Fees

In some cases, when you receive a check that bounces, your bank will charge you a fee. This can be frustrating, especially since you’re already dealing with receiving a bounced check. The most common returned deposit fees usually range between $12-$19, depending on the institution.

  1. Paper Statement Fees

Many banks, to save money and switch to a more environmentally-friendly format, have been encouraging their account-holders to change their statements to be received in an online only platform or portal. Some institutions charge around $2/month for account-holders who prefer to continue receiving paper statements (or those who just have forgotten to log in to their account and make the online-only statement selection).

  1. Human Teller Fees

In an effort to keep up with online-only banks, some traditional banks are now offering “virtual only” bank accounts with better benefits and more money-saving services for their account holders. However, these accounts often come with a catch. Should the bank’s website or mobile app be down, they charge the account holder for performing a transaction in-person at the bank with a teller.

  1. Wire Transfer Fees

People often associate wire transfer fees with international transfers, but few realize that the cost of transferring money domestically is still very high. In fact, in many cases, banks charge upwards of $30/transfer for domestic wire transfers. If you use wire transfers for bill pay or to transfer money between accounts, this is hardly an effective use of your funds.

These fees can be even higher when talking about international money transfers. You can avoid it by using a currency provider instead of a bank. Currency transfer companies have:

  • No wire fees
  • Lower rate and margins than a traditional bank
  • Foreign exchange hedging tools
  • Online system with access to a professional trader
  1. Stop Payment Fees

Should you need to stop a payment, either made by wire transfer or check, the bank will charge you an additional fee for cancelling the payment. This fee is usually approximately $30.

  1. ATM Fees

Finally, we would be remiss if we didn’t mention ATM fees. In many cases, if you don’t use an ATM that is associated with your specific bank, there is an ATM fee that your bank charges you (usually a few dollars) and there’s a fee that the ATM charges you, as well. It may not seem fair that you’re getting hit twice with fees just for needing to access your funds quickly, but that tends to be the case.

Closing Remarks

You may have heard of some of these fees, but likely you were surprised by others. Being aware of them is often the first step in protecting yourself against them. Additionally, if you happen to be shopping around for a new bank, you can keep an eye out for these fees in their contracts and choose the account that offers the best options as far as fees go. In many cases, you may find that non-traditional banks, such as pure-online banks (ex: Tangerine or Ally), offer the best options.

 

Image source

You Want More? Sign-up! ->
TFB VIP Newsletter


If you liked this articles, you might want to sign for my FULL RSS FEEDS. If you prefer to receive the posts in your email, subscribe CLICK HERE


Comments