Here Come the Fees part 2
by Sheyna Steiner
Bank account services
Account maintenance service fee
Account closed early
Inactive account
Credit card overdraft
Abandoned account
Account reconciliation/research
Account maintenance service fee
What it is: For interest-bearing and noninterest-bearing accounts, banks charge this fee in exchange for keeping money with them and for the privilege of using bank services.
Fee range: In an exclusive survey done in May 2007 of the top 10 banks in the top 10 markets in the country, Bankrate researchers found that the fee for account maintenance ranges from $0 to $25 monthly. The median fee is $8.50.
How to avoid: Some banks waive the maintenance fee with the establishment of direct deposit to the account or by meeting a certain balance requirement. Another option is to keep shopping until you find an account that suits your needs and your budget. Check the Bankrate.com rate tables to compare checking accounts across the country.
Account closed early
What it is: Generally, if you close a bank account within 90 to 180 days of when it was opened, you will be charged a fee.
Fee range: In an exclusive survey done in May 2007 of the top 10 banks in the top 10 markets in the country, Bankrate researchers found that the fee for closing a bank account too soon ranges from $0 to $50. The median fee is $20.
How to avoid: Read the disclosure on fees before signing up for an account, or ask how long an account must be opened before it can be closed without a fee. If you absolutely can’t wait to break off your banking relationship and there’s no maintenance fee or requirements to avoid it, leave a small amount of money, around $50, in the account and take your business elsewhere. Unfortunately, that will only work if there are no fees to siphon money out of your account and put the balance into the negative.
Inactive account
What it is: The standards for this fee differ among institutions. In some cases, a fee is charged if a quarter passes with no deposits or withdrawals, others wait an entire year before charging a fee, or not at all.
Fee range: In an exclusive survey done in May 2007 of the top 10 banks in the top 10 markets in the country, Bankrate researchers found that the fee for an inactive account ranges from $0 to $12 per month. The median fee is $0.
How to avoid: Depending on the bank, you may be able to avoid this fee by keeping a balance above a certain level. Check out the fee schedule and plan to update your account before the dormancy triggers a fee.
Credit card overdraft
What it is: Signing up for a credit card from your bank and linking it to your checking account can be an easy way to avoid steep overdraft fees or the even steeper nonsufficient funds fee. There might still be a fee, though. Some institutions charge a flat fee for each transaction, and others use a staggered fee structure that varies with the amount overdrawn. Additionally, the charge may not be added to the balance but instead pulled out as a cash advance and deposited to the account. Cash advances almost always carry a higher interest rate that starts piling up as soon as the money is withdrawn.
Fee range: A Bankrate story in 2006 found that fees for using a credit card for overdraft protection can vary from $0 to $20 per transaction.
How to avoid: Keep close tabs on your bank account balance and try to leave a hefty cushion of money untouched to guard against mistakes. For fee-free overdraft protection, link your checking account to a savings account instead of a credit card.
Abandoned account
What it is: It’s hard to believe, but people sometimes forget about bank accounts. They move or simply lose track of a savings account and the money eventually gets handed over to the government. State laws decree how much time has to pass before the accounts are officially declared abandoned, though it’s usually three to five years. Before forking over the money, some banks help themselves to a fee for their troubles.
Fee range: In an exclusive survey done in May 2007 of the top 10 banks in the top 10 markets in the country, Bankrate researchers found that the fee for an abandoned account ranges between $0 and $12 per month. The median fee is $0.
How to avoid: Stay organized. Keep a spreadsheet on your computer or create a list of your accounts and put it in a safe place.
Account reconciliation/research
What it is: When your records and the bank’s differ, your bank may charge a per-hour fee to your account, with a minimum of one hour for helping you reconcile your records.
Fee range: In an exclusive survey done in May 2007 of the top 10 banks in the top 10 markets in the country, Bankrate researchers found that the fee charged for reconciliation of records or to research inaccuracies on a customer’s behalf, is between $0 to $50 per hour. The median fee is $25 per hour.
How to avoid: Keep scrupulous records and pay close attention to your accounts. In some instances, such as a deposit error, customers have only a small window of time to correct the mistake, even if it is the bank’s fault. The fee should be waived when the bank makes mistakes. If the bank won’t waive the fee. it may be time to complain to the government agency that oversees banks. The Office of the Comptroller of the Currency supervises national banks and the Federal Reserve keeps an eye on state-chartered banks; both have customer service representatives who work to resolve disputes between customers and their banks.
