Understanding your bank’s additional service fees

Banks are a business, so they need to make money. They do this by charging their clients for their services, like using an ATM, doing foreign transactions, or getting paper statements.

Here are some of the bank account fees you may wind up paying depending on the type of account you have.

ATM Fees: These fees are charged when you withdraw money from an ATM outside your bank’s network. They may also be charged if you exceed the free withdrawals in your bank account plan.

Electronic Transfer Fee (or Interac e-Transfer Fee): This fee is paid for Interac e-Transfer transactions. Depending on your account, you may have a few free Interac e-Transfer transactions included each month, but once you go over that amount, you’ll pay a fee.

Foreign transaction fees: Some banks charge a fee for every foreign transaction on your account, such as purchasing  US dollars. Typically, that fee is around 2.5% – 3% of the transaction amount.

Minimum Balance Fee: This fee is charged if your account drops below a certain balance.

Monthly Fee (sometimes Monthly Maintenance or Account Maintenance Fee): This is a bank fee for keeping your bank account open and usually includes a certain number of transactions. Sometimes, you might be able to get this feewaived if you maintain a certain minimum balance.

NSF (Non-Sufficient Funds) Fee: This bank fee is charged when you) attempt a transaction like a pre-authorized payment that requires more money than you have in your account. Overdraft protection may protect you from an NSF fee in such cases.

Overdraft Fee: You’ll pay this fee when your bank account goes below the $0 balance. Many banks charge a fee (and interest) for every day your account has less than a $0 balance. Having Overdraft protection may help you avoid the overdraft fee.

Statement Fee: If you require a paper statement, you may be charged a statement fee. This bank fee can be avoided if you enable  email statements or view your statement online.

Transaction Fee: A fee for transactions involving your accounts, such as debit payments, withdrawals, and money transfers. Your account may allow a certain number of free transactions in a month, but once you go above that amount, you’ll pay a fee per transaction.

How to avoid bank fees

If you’re worried about bank fees, make sure you read the terms and conditions of your banking agreement. If you have any questions or don’t understand the fees, talk to someone at your local branch, who can explain the fees to you.

Make sure you pay attention to your bank balance. This helps you avoid NSF and overdraft fees and helps you ensure you maintain the minimum balance if your account requires one. If possible, set up your banking transactions, so you pay fewer transaction fees. If you use ATMs, use those in your network.

You can also set up text or email alerts to let you know when specific circumstances arise. For example, you can be alerted when your bank account falls below a certain balance or when an automatic payment will be taken out. This will help you avoid fees and alert you to suspicious transactions. Finally, switching from paper statements to e-statements can save you valuable dollars.

If possible, consider bundling your services. Some banks offer a discount if you have multiple products or accounts with them.

By paying attention to your bank account and planning how you spend your money, you can save on the amount you pay in bank fees.