Top 13 Hidden Banking Charges & How to Avoid Bank Fees

Having a bank account is crucial for sound financial management. Especially if you are a student living away from home, managing your finances well requires you to have a bank account. 

Among many policies of banks, their fee structure is one of the most important ones. The banks collect different kinds of bank account charges in exchange for their services. Some banks also tend to have hidden bank charges that may come as an unpleasant surprise to the customers. 

However, choosing the right banks with no monthly fees to open your bank account is essential since the bank's policies will directly affect you as an account holder. On the other hand, knowing the fees and how they work can help you understand how to avoid bank fees. Here are the top 13 hidden bank charges you should know about and tips on how to avoid bank fees like a pro! 

1. Account Maintenance Fee

One of the widespread hidden bank charges that banks charge from their customers is the account maintenance fee. This is a monthly fee that is deducted from the accounts every month. The charge amount is usually allocated towards funding the human and tech resources used to maintain the accounts. 

While normally, this fee is unavoidable; many banks do not charge maintenance fees for student accounts for up to 5 years while the academic practices continue. So, as a student wondering how to avoid bank fees, one way would be to find a bank that offers you a 0 maintenance account. For example, banks like Lorien Finance and Swadesh offer accounts to students that require no maintenance charges. You can check out more options that require no maintenance charges for student bank accounts.

2. Minimum Balance Fee

Another significant change you might learn about is the minimum balance fee. This is charged when the account balance exceeds the minimum required balance. The fee helps banks to maintain regulatory requirements. However, fortunately, only some banks charge this fee. So, if you are looking for banking options, keep an eye on this charge. An easy way how to avoid bank fees like minimum balance fees is by choosing one of the best student banks with no fees or even a bank alternative offering you an account with a 0 minimum required balance. 

3. Online Banking Fee 

Even with the world moving towards complete digitization, many banks still charge for their online banking or remote banking services as one of their bank account charges. Online banking isn’t something that can be avoided since it gives you the flexibility and convenience of accessing your account 24/7 from anywhere. Online banking facilities are especially important if you are a student, as they take away the hassle of visiting the bank for everything. When it comes to how to avoid bank fees like this, you can either find banks with no monthly fees for online banking facilities free of cost or find payment service providers like UniZest UK Money App as an alternative to traditional banks as a way of how to avoid bank fees like this. 

4. Overdraft Fee 

If you withdraw money from the account when there are insufficient funds for the transactions, your transaction is covered by an overdraft. However, you are charged a fee for every overdraft, which can become quite expensive for a student. Overdrafts are tricky but necessary if you are a student living away from home. 

Almost all banks charge overdraft fees, among other bank account charges, which is why finding banks with no overdraft fees maybe difficult. However, fortunately, many banks offer unique benefits to student bank accounts, including overdraft bonuses, incentives, and low overdraft fees. Other benefits, like 0-interest overdrafts, can also compensate for the fees. So, if you’re wondering how to avoid overdraft fees, check out the bank’s overdraft policies carefully while looking for banking options.

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5. Inactivity Fee

Not using your bank account for a stretched period of time can enable your bank to charge you an inactivity fee along with other bank account charges. Depending on your bank's policies, this idle period can be anywhere between 1 year to 5 years. For example, you open a bank account in UK but abandon it since you decided to go with a new bank account. However, you suddenly start using the account after three years of inactivity. In this scenario, the bank will charge fees for the inactivity period. If you have money in an inactive account, the bank will automatically deduct various bank account fees from your money.

So, how to avoid bank fees like inactivity fees? Just keep using the bank account. Make sure you are making transactions regularly, and you should be safe from one of the most common hidden bank charges! If not, it is better to pull your money out of the bank account or close the account if you plan on not using it anymore. This way, you can make sure the bank doesn’t charge you any bank account fees automatically.

6. Statement Fee

Checking your bank statement? You might get charged a small fee for it. The fee is justified by the cost of paper and the printing of your statement receipt. Fortunately, the answer to how to avoid bank fees like statement fees is quite easy. Since online banking options are popular and you can retrieve your bank statement digitally, the paper-printed statement fee is wholly eradicated. You can also use payment service provider apps to retrieve your bank statement digitally without any hassles or additional fees.

7. Debit card Fee

Usually, banks charge multiple types of fees for debit cards. If you don’t have a debit card and are applying for one, you will be charged for a new debit card. Similarly, if your debit card expires, you are charged a renewal fee for a new card. In case of loss or theft of the debit card, banks charge you a small fee for blocking your old card and then replacing it with a new one. Many banks also charge their customers annual or quarterly debit card fees, account service, and maintenance fees. There aren’t many answers to the question of how to avoid bank fees like this one.

8. ATM transaction Fee

Another one of bank account fees that banks may charge you is ATM transaction fees. Depending on your bank's policies, this is charged for every transaction or after a specific number of transactions. Banks might charge this fee for excessive transactions and transactions after you have crossed your transaction limit. This fee also includes the printing cost of the transaction receipt that you may take after your transaction. If you’re wondering how to avoid ATM fees, opt for paperless digital receipts to eradicate this small fraction of the transaction fee.

9. Wire Transfer Fee

When considering wire transfers, be aware of the associated fees ranging from $16 to $35. To avoid this hidden bank charge, limit wire transfers to significant transactions. Opt for online transfers or mobile apps to have the fee waived by some financial institutions potentially. For those seeking insight into how to avoid bank fees, alternative methods such as paper checks or payment apps like Venmo and Zelle can prove cost-effective. Stay informed, choose wisely, and ensure your money travels the digital realm without accumulating unnecessary fees!

10. Out-of-network ATM fees

Out-of-network ATM fees can silently drain your funds when withdrawing cash frequently. Brick-and-mortar giants slap an average $2.50 fee for non-network withdrawals. When it comes to how to avoid ATM fees, stick to in-network ATMs conveniently located on your bank's website or mobile app. In a pinch, withdraw a larger amount or get cash back at a register to minimize one-time fees. Some banks, like Synchrony, offer fee refunds, but be cautious—fees average $4.73, and even with a $5 refund, they add up fast. Understand your bank's network, avoid unnecessary fees, and keep your cash where it belongs!

11. Early account closing fee

Closing your bank account prematurely may result in unexpected fees, usually up to $25, depending on your bank's rules. Banks typically enforce a 90 to 180-day waiting period, during which closing your account might trigger an early account closing fee. This strategic move aims to retain customers and discourage impulsive account changes. To learn how to avoid bank fees associated with premature closures, ensure your chosen bank aligns with your long-term needs. If separation is necessary, waiting out the specified period will help sidestep unnecessary account-closure fees.

12. Insufficient funds fees

For those skipping overdraft protection, beware of insufficient fund fees. While the best banks with no fees charge no such fees on student accounts, some might charge up to $35 per transaction if your balance falls short. Stay in control by monitoring your account, topping up funds early, and avoiding bounced checks. Simplify with alerts via text or email. Though some may confuse them with overdraft fees, they're close relatives. To understand how to avoid bank fees tied to insufficient funds, track spending, set alerts, and consider overdraft protection. Keep your financial ship afloat and fees at bay!

13. Foreign transaction fees

For global travellers and online shoppers, be wary of foreign transaction fees, usually 1% to 4% of your purchase. Sidestep these hidden bank charges by choosing banks like Capital One or HSBC, renowned for waiving foreign transaction fees. To master how to avoid foreign transaction fees, consider opening a new account for fee-free adventures or check if your current bank has local partnerships. Wise spending also means understanding how to avoid bank fees – be vigilant, choose fee-friendly banks, and keep your finances free from unnecessary charges.

Advantages of Having a Student Bank Account 

Student bank accounts have some additional advantages compared to traditional bank accounts. Generally, banks give special privileges to student bank accounts, including low or no additional fees like maintenance fees, minimum balance fees, and ATM transaction fees. Student bank accounts also receive many incentives, bonuses, interest-free overdrafts, and freebies that can make up for any fees being charged. Thus, a student bank account is a better option than a regular one as it will help them avoid maximum hidden bank charges. 

The bank account fees and charges that you are charged depend on the bank you have in your account. The fee structure can change from bank to bank according to their individual policies. Thus, to avoid as many bank account charges as possible, it is important to ensure you choose the right bank. Knowing some of the most common banking fees that banks can charge from their account holders can enable you to ask the right questions and find the best bank that fits you! Before moving to a different country make sure you check our guide to international student bank account.