Bank Fees You Want To Avoid

Signing a document

Military families have access to a ton of great banking products, but we still sometimes find ourself paying unnecessary fees for services that we don’t need or that maybe should just be free.  According to, a fee-free banking platform, 61% of bank revenue from US consumer checking accounts comes from overdraft and insufficient funds fees.  Wow – that’s a lot!

If you are comparing bank accounts and looking for to see what fees you might be charged, here is a list of things you need to consider (with many thanks to for the post inspiration and suggesting these fees):

Monthly Maintenance Fees

Thankfully, military members have access to a wide variety of accounts that don’t offer any sort of monthly maintenance fees or minimum balance for free accounts.  Keep your eyes open, though – you never know when your account terms will change and, if you are like most people, you don’t read every notice that comes through your inbox.

ATM Fees

There are two common automated teller machine (ATM) fees:  the out-of-network ATM fee, and the foreign ATM fee.  The out-of-network ATM fee is the fee that your bank charges for using an ATM that is not in your banks network.  Many great bank accounts waive this fee.  You may still be charge a fee by the ATM owner, so be sure to look for ATMs that advertise that they are free to use.

The foreign ATM fee is for using an ATM outside the United States.  This cost does make some sense, because those transactions do cost the bank money.  Depending on your travel and living situation, this fee may or may not be important to you.  We’ve lived outside the US for 7 of the last 16 years, so foreign ATM fees are important to me.  If you rarely leave the US, a high foreign ATM fee might not matter to you.

Inactivity Fees

This one really makes me mad!  I have had two different accounts stripped of their balances and closed due to the implementation of inactivity fees, typically about $5 per month.  This makes no sense to me.  If the bank isn’t sending out paper statements, there is almost no cost to having $5 or $50 or $5 million dollars just sitting there, improving the bank’s balance sheet.

Over the Counter Transaction Fees

Some bank accounts that are otherwise good values make up for their low fees by charging you to talk to an actual teller or bank employee.  That’s fine if you never, ever, ever have to talk to a teller.  But what happens when you get a check made out to you and your Dad and you don’t know how to deposit it, or you need to take out a lot of cash for vacation and it exceeds the ATM daily limit?

Stop Payment Fees

On rare occasion, you may write a check that gets lost or stolen or you discover that the transaction was fraudulent.  When that happens, you can stop payment on a check.  It’s simple and fast for the bank, and it typically has a hefty fee attached.

There are many other sneaky little fees that banks can charge, and you can ask your bank for a copy of their fee schedule or find it somewhere in your online account access.  When choosing your bank account, be sure to balance the fees that you are likely to incur to find the least expensive bank account for your situation.

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.
  • John

    I use a credit union and have no problems. They pay me a rebate on interest paid ( like home mortrage) and inst. you earn.

  • John Willcockson

    Another issue: over-the-limit fees or over-draft protection. Over-draft protection can take several forms, with different fees. If you have a bank checking account with a linked check-card, you will often be offered over-draft protection as a convenience to “avoid the embarrassment” of having your card-swipe declined at a store. The cost of this convenience (which the bank calls “protection”) can be over $30 per instance. I would rather have my card-swipe declined by the Wal-Mart cashier (and have to come up with alternate payment) than to pay $30 a pop for this convenience. Some banks and credit unions will charge you $2 or $3 every time your card is declined, which is cheaper than overdraft protection at $30 each instance, so just be careful not to re-swipe the card after being declined.
    However, if I write a check for more than I have in my account, not only will the bank charge me for the overdraft, but the merchant to whom I gave the check may tack on their own “bounced check” fee of $25 or so. If you primarily write checks (rather than swipe a check card) overdraft protection could make more sense. Also, some banks and credit unions will provide over-draft protection by linking your savings account balance to your checking account: if you overdraft your checking account they simply move money from savings to checking to cover your goof. A few still provide this service at low or no fee. So as Mrs. Kate points out read the fine print on your account fees and/or your credit union’s rate & fee schedule. Good Luck