{"id":2810,"date":"2025-09-14T09:53:56","date_gmt":"2025-09-14T09:53:56","guid":{"rendered":"https:\/\/ft365.org\/index.php\/2025\/09\/14\/how-bank-fees-are-squeezing-your-budget-should-you-and-your-bank-go-on-a-break-bankrate\/"},"modified":"2025-09-14T09:53:56","modified_gmt":"2025-09-14T09:53:56","slug":"how-bank-fees-are-squeezing-your-budget-should-you-and-your-bank-go-on-a-break-bankrate","status":"publish","type":"post","link":"http:\/\/ft365.org\/index.php\/2025\/09\/14\/how-bank-fees-are-squeezing-your-budget-should-you-and-your-bank-go-on-a-break-bankrate\/","title":{"rendered":"How Bank Fees Are Squeezing Your Budget: Should You And Your Bank Go On A Break? | Bankrate"},"content":{"rendered":"
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Key takeaways<\/span> <\/span> <\/h2>\n
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  • Overdraft fees are down slightly after increasing the previous year. The average fee is now $26.77, down 1 percent from the previous year. <\/li>\n
  • If you regularly incur high monthly maintenance fees, ATM fees and receive low interest rates on deposits, it may be time to switch bank accounts and save the money lost to fees. <\/li>\n
  • Online-only banks, credit unions and neobanks often offer lower fees compared with traditional, national banks, though there may be ways to waive fees at traditional banks. <\/li>\n<\/ul><\/div>\n

    \u201cEvery penny counts\u201d might be a clich\u00e9 to many people, but it\u2019s true when it comes to bank fees, where a few extra cents for each charge can accumulate quickly.<\/p>\n

    The growth of online-only banking shows that it\u2019s possible to be more discerning about how and where you bank, and therefore how to avoid unnecessary fees.\u00a0<\/p>\n

    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\u2019s what you should know about bank fees, how they\u2019re changing and what that means for your wallet.<\/p>\n

    Bankrate banking fees and insufficient funds data<\/h2>\n

    Bank fees aren\u2019t 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.<\/p>\n

    Here\u2019s a breakdown of bank fee data and trends, from Bankrate\u2019s 2025 Checking Account and ATM Fee Study:<\/p>\n

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    Trend Up Icon<\/title> <\/svg> <\/p>\n
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    • ATM fees are at a record high<\/strong>: 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\u2019s own bank for using an ATM outside its network.<\/li>\n
    • Overdraft fees are down ever-so-slightly<\/strong>: After increasing the previous year, the average overdraft fee has dipped 1 percent this year to $26.77. Meanwhile, the average nonsufficient funds (NSF) fee has fallen for the fourth straight year to a new record low of $16.82.<\/li>\n
    • For interest checking accounts, the average minimum balance required to avoid service fees has reached a record high<\/strong>: The average monthly fee for interest checking accounts is now $15.65, with the average minimum balance to avoid this fee being $10,705 \u2014 up nearly 5 percent over last year.<\/li>\n<\/ul><\/div>\n<\/p><\/div>\n

      Bank fees can impact a consumer\u2019s 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.<\/p>\n

      Why do banks charge fees?<\/h2>\n

      At the end of the day, banks are businesses. While they cater to important financial needs, they\u2019re still for-profit institutions, and fees are one way they can add to their revenue.<\/p>\n

      But with all those fees, consumers are still committed to their banks, keeping a checking account at a brick-and-mortar financial institution for an average of 19 years, according to Bankrate\u2019s latest Checking Account Survey.<\/p>\n

      The top two reasons survey respondents keep their checking account are for no\/low fees (18.4 percent) and because it\u2019s the account that they\u2019ve always had (18.2 percent).<\/p>\n

      Most people, more than two-thirds (68 percent) of respondents, don\u2019t pay fees. This lines up with past Consumer Financial Protection Bureau (CFPB) data that nine percent of consumer bank accounts paid 80 percent of banks\u2019 overdraft revenue.<\/p>\n

      Almost one-third (32 percent) of Americans pay monthly fees for their checking account, according to the Bankrate checking account survey.<\/p>\n

      For 19 percent of those who have stuck with the same checking account, satisfaction with customer service is the main reason. Another 18 percent said it\u2019s about familiarity \u2014 they stick with what they know. Comparatively, 18 percent cited low or no fees.<\/p>\n

      By sticking to the same account, you could potentially be leaving money on the table. Just as you would shop around for the best deals on household goods or car insurance, reviewing and comparing different banks\u2019 fee structures can be financially beneficial. A new banking product might offer fewer fees or easier ways to waive those fees.<\/p>\n

      It\u2019s important to understand what different types of fees are, so you\u2019re not caught off-guard by them. Here are common terms you might see related to bank fees:<\/p>\n

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      ATM surcharge<\/dt>\n
      A fee that an ATM owner charges non-account holders. For instance, using an ATM from a bank where you don\u2019t have an account can incur this fee.<\/dd>\n<\/p>\n

      Out-of-network ATM fee<\/dt>\n
      A charge by your bank for utilizing an ATM outside of its network and partnered networks. It\u2019s often combined with the ATM owner\u2019s surcharge for a total ATM charge.<\/dd>\n<\/p>\n

      Overdraft fee<\/dt>\n
      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.<\/dd>\n<\/p>\n

      NSF fee<\/dt>\n
      Similar to an overdraft fee, but with a crucial distinction: NSF fees are imposed when a transaction is declined due to insufficient funds.<\/dd>\n<\/p>\n

      Monthly service\/maintenance fee<\/dt>\n
      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.<\/dd>\n<\/p>\n

      Monthly average balance (MAB)<\/dt>\n
      This isn\u2019t a fee but a term that refers to the average amount you\u2019re required to maintain in your account over a month. If your balance falls below the MAB, you might incur additional fees, like the monthly service fee.<\/dd>\n<\/p>\n<\/dl><\/div>\n
      Star Icon<\/title> <\/svg> <\/p>\n

      Keep in mind: <\/strong> 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. <\/p>\n<\/p><\/div>\n

      Alternatives to your current bank<\/h2>\n

      By routinely paying fees to traditional banks, many consumers are inadvertently leaving free money on the table. It\u2019s akin to giving away a portion of your hard-earned income.<\/p>\n

      Look into whether your current bank offers fee waivers under specific conditions, such as if you maintain a certain balance or receive a minimum amount in direct deposits each month. If fees are eating into your budget, and they can\u2019t be waived, it might be time to consider switching banks.<\/p>\n

      Here are some alternative banking options to check out.<\/p>\n

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      Bank type<\/th>\nWhy choose this banking option?<\/th>\n<\/tr>\n<\/thead>\n
      Online banks<\/td>\nWith no brick-and-mortar overhead costs, online banks often pass on their savings to customers through reduced fees and\/or higher interest rates. However, they may not be suited for those who value in-person services.<\/td>\n<\/tr>\n
      Credit unions<\/td>\nMember-owned and not-for-profit, credit unions often offer lower fees on their products and prioritize member service. Note that they may have limited branch and ATM networks, as well as certain requirements to join.<\/td>\n<\/tr>\n
      Regional banks<\/td>\nRegional banks can provide a personal touch with more product offerings and services than small banks, but they might still have higher fees than online banks or credit unions.<\/td>\n<\/tr>\n
      Community banks<\/td>\nCommunity banks prioritize local interests and personalized service. Their fees may be lower than big, national banks, but they could lack the technological tools larger banks boast.<\/td>\n<\/tr>\n
      Neobanks<\/td>\nNeobanks are fintech firms that operate exclusively online. They often offer innovative features and low fees, but might not have the same level of protection as traditional banks. Many come with FDIC insurance through bank partnerships, but it\u2019s a good idea to check that this insurance is available.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

      Avoiding bank fees isn\u2019t just about choosing the right bank, but also about smart banking habits. By regularly monitoring your account, understanding your bank account\u2019s fee structure and preventing overdrafts, you can steer clear of many common fees. Opt for banks that have large ATM networks or reimburse ATM fees for out-of-network usage.<\/p>\n

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      Did you know? <\/p>\n

      You don\u2019t have to pay overdraft fees in 2025. Some banks have cut overdraft fees in the past few years. This is another reason why it\u2019s smart to shop around and see what other banks are offering.<\/p>\n<\/p><\/div>\n

      Finally, embrace technology: Many banks offer apps that help track spending and account balances, which can be a fruitful tool to stay on top of your finances and avoid unwanted surprises. You may also be able to set up mobile banking alerts, such as those that warn you of a low balance, which can stop you from overdrawing.<\/p>\n

      FAQs on banking fees<\/h2>\n