How to Avoid Bank Fees

Nowadays, many banks charge fees for having a bank account or using their services. Here are some tips and tricks on how to avoid bank fees.

1. Maintain a (slightly above) minimum balance

Because banks charge fees even if you dip below the minimum balance for a day, it’s best to always have a balance that’s slightly above the minimum threshold. Although you may lose some interest since you could store the cash somewhere else, it could give you peace of mind. It will also make it less likely for you to get charged for insufficient funds.

I recommend that you check your bank account periodically to ensure that you always have enough cash left in the account to meet the minimum balance requirements.

2. Get the account that meets but doesn’t exceed your needs

These days, banks typically offer a wide variety of accounts. These accounts differ by things like the number of transactions permitted a month, the level of in-person service offered, the minimum balance above which your monthly fee can be waived, etc.

Of course, the more services offered, the higher the monthly bank fees.

Most of us do not need the highest level, which typically gives you unlimited access to everything.

To determine what level of services you will need, go through your past bank statements and check how many transactions you do every month. You can also think about whether you need a lot of in-person support, a little, or none at all. Once you understand your typical banking needs, you can then figure out what level of service is sufficient for you. Most likely, you can save some money by switching from your unlimited account to one with some limits that still meet your needs.

3. Take advantage of your special status if possible

Many banks offer special rates for groups of individuals, such as youths, students, veterans, or even professionals belonging to a particular governing body (such as CPA). When you are looking for a bank account, make sure that you shop around, get one that you are comfortable with, and ideally get a discount.

4. Use an online bank if you feel comfortable

Compared to a traditional bank that has a significant amount of overhead (e.g., office rental, cleaning staff, utilities, etc.), online banks can save a lot of money by having a minimal physical presence. Therefore, they can pass down some of the cost savings onto the consumers. As such, you can find many online banks that do not charge your typical monthly fees.

5. Sign up for overdraft coverage or protection

Overdrawing your bank account could be an easy accident, especially these days when many of us have signed up for recurring monthly payments out of convenience. Some banks may simply decline the transaction and give you a Non-Sufficient Funds (NSF) charge, while others may allow you to overdraw at the moment, but charge you a hefty overdraft fee later.

To prevent this from happening, you may want to sign up for overdraft coverage or protection. This way, the bank will cover you by taking the funds from your linked secondary account such as a second chequing account or your savings account.

I recommend that you sign up for a pay-as-you-go overdraft protection plan to give yourself peace of mind.

6. Use no-fee ATMs

When you withdraw cash from an out-of-network ATM, chances are your bank will charge you a bank fee for using the machine. I recommend that you locate your nearest ATM that’s in your bank’s network.

If you are in a rush and are unable to find an in-network ATM, you may want to take out a large sum at once because ATM charges are a one-time fee.

7. Ask for refunds

Don’t be ashamed to ask for a refund even if it is technically your fault. Most banks are willing to waive a penalty or a fee if they feel you are a customer worth keeping.

Next time when you get charged a bank fee for some small mistake (e.g., your account dips below minimum balance for a day or two), give your bank a call.


There you have it, some of my best strategies on how to not waste money on unnecessary bank expenses. I hope you find the tips above useful in helping you navigate the issue of how to avoid bank fees.


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