If you’re not careful, the fees that come with using a checking account can add up quickly.
Getting cash from an out-of-network ATM costs more than ever. Average total ATM fees, including both the charge from your own bank as well as from the ATM’s operator, are at a record high of $4.86, according to a recent Bankrate survey.
The average minimum balance required to avoid a monthly maintenance fee on an interest-bearing checking account has reached an all-time high, too. Customers have to keep $10,705 in their accounts to sidestep a fee of $15.65, on average.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more – straight to your e-mail.
Profit and prosper with the best of expert advice – straight to your e-mail.
Overdraft fees have dropped slightly from 2024, but they’re still steep, averaging $26.77.
The good news is that you can steer clear of all these fees, especially if you choose your account wisely. Use these tips to keep them at bay.
Beat ATM surcharges
Before you withdraw cash at an ATM, make sure the ATM is in your bank’s network. Some institutions are members of large networks, such as Allpoint or MoneyPass, that allow customers to withdraw money fee-free from tens of thousands of ATMs around the country.
And members of credit unions that are part of the CO-OP network can access more than 30,000 surcharge-free ATMs nationwide.
Another idea: When you use your debit card to make purchases at participating retailers, such as some grocery stores and pharmacies, you may be able to get cash back as part of the transaction (but check first whether the merchant charges a fee for this service).
Keep in mind that retailers often impose lower limits than ATMs on how much cash you can get.
Some banks reimburse customers for out-of-network ATM surcharges. Ally Bank, for example, refunds up to $10 monthly in ATM fees for those who use its checking account or money market deposit account.
Charles Schwab Bank reimburses all ATM surcharges, both in the U.S. and abroad, with its Investor Checking and Investor Savings accounts.
The Cash Management Account from Fidelity Investments includes unlimited reimbursement of ATM fees worldwide, too.
Dodge other fees
You can still find free, no-strings checking accounts. The above-mentioned accounts from Ally Bank, Charles Schwab Bank and Fidelity don’t charge a monthly fee, and other internet banks offer no-fee checking, too, including Axos Bank, Capital One 360, Discover Bank and EverBank.
Even checking accounts that charge a monthly fee usually offer at least one way to avoid it. You may be able to skip the fee if you set up direct deposit, for example.
And plenty of accounts that include a minimum-balance requirement as a qualification have a threshold of less than $10,000. TD Bank, for instance, lets you skip the $15 monthly fee on its Beyond Checking account if you meet one of three requirements, and one of them is maintaining a daily balance of $2,500 in the account.
If you’re enrolled in overdraft coverage, your bank will cover for you if you spend more money than you have in your checking account, but it’ll charge you an overdraft fee.
You can opt out of overdraft coverage; in that case, your debit card may be declined in a transaction if you have inadequate funds in your account.
Alternatively, many banks let you link your checking account to a backup source, such as a savings account, and have money automatically transferred if you overdraw your checking account.
Some institutions charge a fee for this service, but it’s typically less than what you’d pay for overdraft coverage. Other banks offer overdraft transfers at no extra charge.
Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.