These bank charges can ruin your budget. What to avoid

If you are not careful with how you manage your money, you may incur huge bank fees that could otherwise be avoided.

Between overdrafts or insufficient funds fees, interest-bearing and non-interest-bearing checking account fees and ATM fees, a large chunk of your budget can be taken out, according to Bankrate.comLatest checking account and ATM fee study.

search From the Personal Finance website, he takes a look at how expensive these penalties can get and how to avoid them.

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Some of the most expensive penalties – overdraft fees – have fallen to their lowest level in 13 years for the average fee, which is now $29.80.

“Despite all the attention being received from a few banks adopting more consumer-friendly overdraft policies, 96% of accounts still charge overdraft fees,” said Greg McBride, chief financial analyst at

Overdraft and insufficient fund fees

The average overdraft fee of $29.80 is down 11% from a year ago, according to The overdraft fee is usually collected after the payment has been processed even though there are insufficient funds in the account.

Meanwhile, the average fee for insufficient funds is now $26.58, down 21% from last year. Insufficient funds are usually charged after payment is refused due to lack of funds in the account. has found how these fees vary by metropolitan area.

Pittsburgh had the highest average overdraft fee at $35.50, followed by Cleveland at $34.84 and Denver at $34.45. Meanwhile, Miami had the lowest average overdraft fee at $21.05, followed by Washington, DC at $22.95 and San Francisco at $23.76.

There are a few key ways to avoid these fees, according to McBride.

By keeping tabs on your available account balance before transactions begin, you may be able to avoid overdrafts if the check you deposited is still not credited, for example.

Plus, if you link your checking account to a small savings account with the same bank, that can act as a buffer, rather than relying on the bank’s money to cover any shortfall, McBride said.

Review account maintenance fees

Interest checking accounts now charge an average monthly fee of $16.19, down from $16.35 last year, both of which are record levels, according to

The average balance required to avoid monthly fees is now $9,658, down 2.4% from $9,897 last year.

However, the average required balance for the year is 28% higher than $7,550 in 2020, a record at the time, according to

Despite those high fees and balance requirements, interest checking accounts have a low average return of 0.03%.

Make sure you haven’t suddenly incurred charges or there was no credit requirement set.

Greg McBride

Chief Financial Analyst at

Most checking accounts with an interest rate of 75% come with some sort of balance requirement. However, 15% of these accounts will waive this fee for direct deposits, and 7% of these accounts are free.

Nearly half of the zero-interest checking accounts – 46% – are “free” and do not come without a monthly fee or balance requirement. For those who charge, the average monthly fee is now $5.44, up 7% from $5.08 last year. The average balance required to avoid these fees is $539.04, up 6.4% from $506.62 last year. found that more than half of the free accounts – 53% – will waive monthly fees based on direct deposits, account balances, or transaction activity, or a combination of direct deposit and transaction activity.

However, consumers may want to avoid fees by looking for a free checking account with no balance requirements or monthly fees, McBride said.

Even if the account has a monthly fee, he said, you might be able to get that waiver by setting up a direct deposit.

Also, be sure to review the exact details of all your bank statements and correspondence.

“Make sure you don’t suddenly incur fees or there was no credit requirement set in,” McBride said.

Off-network ATM fees

D3sign | moment | Getty Images

ATM surcharges, where non-customers make withdrawals and incur a fee charged by the ATM owner, is now a standard average of $3.14.

While every bank that owns an ATM charges non-customers for withdrawals, many banks do not charge their customers for out of their network.

The average fee among those banks that charge customers who exit their network is $1.52, up from $1.51 last year.

Combining both ATM fees, the average total cost for an out-of-network withdrawal is now $4.66.

These fees vary by metropolitan area, with Atlanta having the highest average ATM fee at $5.38. Followed by Detroit, $5.29, and Phoenix, $5.24.

Los Angeles had the lowest average ATM fee, at $4.21, followed by Seattle, at $4.23, and Minneapolis, at $4.24.

It is worth noting that these fees can be avoided.

“Plan ahead for where and when you’re pulling out and aim to do so within the network,” McBride said. “Don’t get in the habit of making out-of-network ATM withdrawals, because fees can add up quickly.”

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