Whether you’re new to banking or just want to learn more about checking account fees and charges, it can be confusing to know what’s normal and what isn’t. You may have heard the term “maintenance fee” thrown around in conversations about bank accounts, but are you confused about what it means? Don’t worry – they’ve got your back!
In this article, you will explore maintenance fees and how they work so that you can make sure your checking account doesn’t charge one. They also cover other hidden charges that might be lurking on your statement. With all this information in hand, you’ll be able to take steps toward minimizing your out-of-pocket financial costs while still having access to everything you need from a bank account.
What is the maintenance fee?
A maintenance fee is a charge that banks charge to maintain your account. This fee is charged when you use the services of your bank or any other financial institution. A service charge is also known as an administrative cost or a service charge. Banks charge this fee to credit unions and other financial institutions to cover the costs of running their operations, including accounting, IT systems and other expenses incurred for maintaining customer accounts.
Choose a checking account that doesn’t charge a monthly fee
Ask about their checking account options and find out how much their monthly fees are. It’s also worth asking whether there are any restrictions on what kinds of transactions can be made from your account. You can opt for banks with no fee banking too. “Banking with SoFi has no service charges and no account fees.”
For example, many banks charge extra if you make fewer withdrawals or use ATMs outside of their network. You may also be charged for using checks instead of debit cards or having an insufficient balance in your account at the end of each month (an “insufficient funds fee”).
Set up direct deposit
If you’re the kind of person who likes to keep track of their money and not have it just drain away with fees, then this is for you. You can set up automatic bill payments so that your bills are automatically deducted from your account on a certain day each month. This is helpful if, say, you get paid bi-weekly and want to make sure there’s enough in your account at the end of every pay period to cover all those expenses that come due every month (like rent).
Maintain a minimum balance
While there are many theories and opinions on the minimum balance required, most people agree that keeping a cash buffer in your account is a good idea.
Some banks charge maintenance fees if your account falls below that threshold. However, all banks have different rules regarding how much money you need to maintain. The minimum balance required may differ for each bank, for each type of account, or even for different accounts within the same bank. For example, suppose you change banks or open a new checking account with them (for example). In that case, their minimum maintenance fee requirements could differ entirely from those of your previous institution or other accounts you might have opened.
The key point here is to make sure that you understand what the maintenance fee means before signing up for any account that charges this extra cost because it can be very expensive in the long run if you don’t take care of things properly.