Banks are on the hunt for new sources of profits.
Their revenues have shrunk thanks to developments such as new consumer protection rules, low interest rates and the end of the mortgage refinance boom.
Service and account fees are becoming stealthier and harder for consumers to escape.
For example, free checking accounts are increasingly hard to find. In addition, it is likely that you now have to maintain a higher minimum balance to get account fees waived.
In recent years, there have been increases in many types of fees, including:
- Monthly maintenance fees for checking accounts.
- Overdraft fees.
- ATM fees banks charge their own customers for using an out-of-network ATM.
- ATM fees a bank charges noncustomers for using the bank’s ATMs.
Still, you can find ways to avoid being gouged. Following are 14 ways to sidestep or manage bank fees:
1. Avoid big banks
“The largest banks tend to have the highest fee levels,” MoneyRates.com says in its August 2015 update on bank fees:
Monthly fees at large banks average $15.15, compared with $11.50 at medium-sized banks and $11.51 at smaller banks. This means large bank customers are paying an average of $181.80 in maintenance fees annually.
So, if low fees are your most important consideration, shop around for a smaller bank.
2. Shop for an online bank
You are less likely to run into fees at online banks, and, when you do, fees are usually lower.
For example, MoneyRates found that 48.48 percent of online accounts surveyed have no monthly maintenance fees, compared with 22.32 percent of traditional banks.
However, MoneyRates notes that online banks do not offer as great an advantage as previously:
Just six months ago, 63.16 percent of online checking accounts had no monthly fees. This rapid fall to 48.48 percent suggests that fewer banks feel they have to convince their customers to try online banking. Increasingly, consumers are viewing online banking as a convenience they will pay to have.
Here’s how to find a secure, trustworthy online bank.
3. Shop for a credit union
Some people are not comfortable with online banking. No problem: Credit unions offer another lower-cost option. Many credit unions offer free checking without requiring a minimum balance.
But do not assume all credit unions have low fees or free checking. Compare costs at credit unions versus banks, because their fees and policies can vary greatly. The larger credit unions often have lower fees and better rates, says Consumer Reports.
4. Shop for a community bank
Fees also can be lower at community banks, Consumer Reports says.
Community banks pride themselves on customer service so they often will keep fees lower. But, again, it all depends on the bank you choose, so shop around.
5. Use electronic features
“Banks save when you serve yourself, just like gas stations do when you pump your own,” Consumer Reports says.
Here are two ways to save using electronic features:
- Opt out of paper statements. Receive online statements if your bank charges customers for paper statements. It is a win for the bank (reducing its printing and mailing costs) and for the environment.
- Switch to online bill pay. You can stop buying envelopes and stamps for paying bills, and automate your payments so you will never again incur a late fee for forgetting to pay a bill.
6. Sign up for direct deposit
Some banks and credit unions offer free checking for customers who sign up to have paychecks and certain other regular deposits electronically deposited into the account.
7. Look for a volume discount
Some banks waive fees or give a discount when you maintain multiple accounts.
8. Maintain a minimum balance
Banks often waive the monthly checking account fee if you keep a minimum balance in the account.
Keeping a balance also helps you leave a buffer for mistakes or miscalculations. But much depends on the size of the balance required. You may have better uses for a large amount of money.
Before signing on, read the rules for each type of account. Are you required to keep a minimum average balance each month? Or is your balance never allowed to dip below the minimum amount?