Common bank fees and how to avoid them
Without care, these fees can put a serious dent in your savings.
If you’ve ever drawn more money from your bank account than is available, you know the debilitating sting of a bank penalty fee. Sure, these are meant to be one-off penalties, but these fees can quickly add up, accrue interest and make it increasingly difficult to regain your financial footing. Here’s a definitive list of bank penalty fees you could encounter and how to avoid them.
What are some common bank fees?
The range of penalty fees that could apply to your bank accounts varies depending on your financial institution. But here’s a list of fees you may want to watch out for.
How to avoid bank fees
Here are some ways you can guard against being hit by bank penalty fees:
- Compare products. Compare banks to find one with the fewest fees or the lowest charges on those fees. You may have to do some digging, but some institutions offer fee-free accounts.
- Read the fine print. Go through your bank account’s Fee Schedule and Product Disclosure Statement to learn applicable fees and if you can reduce or avoid them.
- Contact your bank. Contact your bank to dispute charges you think are incorrect or unfair. Sometimes, all you need to do is explain your situation and ask the bank to reverse the charge.
- Know the state of your accounts. Know how your income stacks up against your expenditure and never assume money due has entered your account without checking first. Regularly review your account details so you’re aware of what’s going out and coming in for each account. This will allow you to budget accordingly and could help you avoid penalty fees as a result.
- Opt-out of overdraft protection. Avoid overdraft fees easily by simply not opting-in for the service. By opting out, charges that would bring your account balance below $0 are automatically declined. You can arrange this when opening your bank account.
- Set up alerts. Turn on email or text alerts and get notified when you have a low account balance, get a direct deposit, make a withdrawal, and more.
Compare bank accounts with no fees
Bank penalty fees can be a nasty surprise if you’re not aware of them. But understanding what these fees are, and when they may apply to your specific accounts, will help you avoid and reduce these costs. If you want to avoid common fees altogether, compare fee-free chequing accounts or fee-free savings accounts to see if there’s one that suits your needs.
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