How bank fees are squeezing your budget: Should you and your bank go on a break?
Key takeaways
- Monthly maintenance, out-of-network ATM and overdraft fees are among the most common bank charges, with costs typically ranging from $5 to $35 or more, depending on the fee.
- These fees often add up quickly, so it can pay to switch banks if yours charges fees that are hard to avoid.
- You’ll typically find lower fees — and higher yields — at online-only banks and credit unions than at large brick-and-mortar banks.
“Every penny counts” might be a cliché to many people, but it’s true when it comes to bank fees, where a few extra cents for each charge can accumulate quickly.
Fortunately, consumers have more ways than ever to avoid that drain. The growth of online-only banking shows that it’s possible to be more discerning about how and where you bank, and therefore how to avoid unnecessary fees.
However, even in this digital banking age, traditional bank fees can impose a weighty burden on many budgets. To become a more vigilant consumer, here’s what you should know about bank fees, how they’re changing and what that means for your wallet.
Bankrate banking fees and insufficient funds data
Bank fees aren’t static. Instead, they fluctuate based on economic conditions, regulatory changes and competitive pressures. Tracking the changes in bank fees over time can provide a lens into broader financial trends and highlight how our money is being redirected.
Here’s a breakdown of bank fee data and trends, from Bankrate’s Checking Account and ATM Fee Study:
- ATM fees are at a record high: The average total cost of using an out-of-network ATM is now $4.86. It consists of the average surcharge of $3.22 levied by ATM-operating banks, plus the average fee of $1.64 from one’s own bank for using an ATM outside its network.
- Overdraft fees are down ever-so-slightly: After increasing the previous year, the average overdraft fee eked down 1% in 2025 to $26.77. Meanwhile, the average nonsufficient funds (NSF) fee fell for the fourth straight year to a new record low of $16.82.
- For interest checking accounts, the average minimum balance required to avoid service fees has reached a record high: The average monthly fee for interest checking accounts is now $15.65, with the average minimum balance to avoid this fee being $10,705 — up nearly 5 percent over last year.
Bank fees can impact a consumer’s financial wellness. Yet some fees can easily be avoided, either by finding an account that charges lower or no fees, or by taking measures, such as sticking to in-network ATMs.
Why do banks charge fees?
Banks are for-profit businesses, and fees are one way they generate revenue. Yet consumers stay loyal: The average checking account holder has kept their brick-and-mortar account for 19 years, according to Bankrate’s Checking Account Survey. The top reasons cited are low or no fees (18.4%) and that it’s simply the account they’ve always had (18.2%).
Most people are able to avoid fees altogether — 68% of respondents report that they don’t pay any checking fees, including overdraft and ATM fees.
Still, sticking with the same account can mean leaving money on the table. Just as you’d shop around for insurance or household goods, comparing banks’ fee structures can pay off — a different account might carry fewer fees or easier ways to waive them.
Common fee-related terms to know include:
- ATM surcharge
- A fee that an ATM owner charges non-account holders. For instance, using an ATM from a bank where you don’t have an account can incur this fee.
- Out-of-network ATM fee
- A charge by your bank for utilizing an ATM outside of its network and partnered networks. It’s often combined with the ATM owner’s surcharge for a total ATM charge.
- Overdraft fee
- A fee levied when you make a transaction that exceeds the available balance in your account. Instead of declining the transaction, the bank temporarily covers the difference and charges a fee for the service.
- NSF fee
- Similar to an overdraft fee, but with a crucial distinction: NSF fees are imposed when a transaction is declined due to insufficient funds.
- Monthly service or maintenance fee
- A regularly occurring charge for having an account with the bank. Often, certain actions, such as maintaining a specific balance or setting up direct deposit, can get this fee waived.
- Average account balance
- This isn’t a fee but a term commonly seen in deposit account agreements. Having an average balance that falls below a set threshold could incur a monthly maintenance fee.
Keep in mind: If you believe you were charged a fee unjustly, reach out to your bank. You can dispute charges and, in many instances, negotiate with your bank to refund or lower them.
Alternatives to your current bank
By routinely paying fees to traditional banks, many consumers are inadvertently leaving free money on the table. It’s akin to giving away a portion of your hard-earned income.
Look into whether your current bank offers fee waivers under specific conditions, such as maintaining a certain balance or receiving a minimum amount in direct deposits each month. If fees are eating into your budget and can’t be waived, it might be time to consider switching banks — here’s a look at the alternatives.
| Bank type | Why choose this banking option? |
|---|---|
| Online banks | With no branch overhead, online banks often pass on savings through lower fees and higher rates — though they’re not ideal if you value in-person service. |
| Credit unions | Member-owned and not-for-profit, credit unions typically offer lower fees and strong member service, though branch availability, ATM access and membership requirements can be limiting. |
| Regional banks | Regional banks can provide a personal touch with more products and services than smaller banks, but often at higher fees than online banks or credit unions. |
| Community banks | Community banks focus on local, personalized service and may charge lower fees than big banks, but often lack the tech tools larger banks offer. |
| Neobanks | These online-only fintechs offer innovative features and low fees — just confirm FDIC coverage, which usually comes through a bank partner. |
Avoiding fees isn’t just about choosing the right bank — smart habits matter too. Monitor your account, understand your fee structure and take steps to prevent overdrafts. Opt for banks with large ATM networks or ATM fee reimbursements for out-of-network use.
Banking apps can help you track spending and set up balance alerts — an easy way to catch a low balance before it turns into an overdraft.
FAQs on banking fees
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Overdraft protection is a service offered by banks that prevents a purchase from being declined due to insufficient funds. You can often choose to opt in or out of this service. If you opt in, the bank will cover the transaction amount that exceeds your available balance, sometimes for a fee.
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Here are five simple steps you can take to avoid bank fees:
- Regularly monitor your account balance.
- Set up balance alerts.
- Use ATMs within your bank’s network.
- Maintain the required minimum balance or set up qualifying direct deposits to avoid a monthly service charge.
- Regularly review your account statements for any unexpected fees, and query them if needed.
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Many banks offer no-fee checking or savings accounts, which come without monthly maintenance fees, and in some cases may also waive ATM and overdraft fees. Examples include online accounts, like those at Ally Bank or Capital One, and certain accounts at credit unions or community banks.
Some larger banks also offer basic accounts with no or waivable fees, provided you meet specific criteria, such as maintaining a minimum balance.
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Can you get a bank fee refunded?
Sometimes. If you’re a longtime customer with a strong track record, it’s often worth calling your bank and asking to have a fee waived or refunded — such as a monthly maintenance fee, or an overdraft fee due to a one-time slip-up.
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