Savings Account Fees: What They Are and How Much They Cost

Savings Account Fees: What They Are and How Much They Cost

Bank of America monthly maintenance fee

Why is my bank charging me a service charge?

What is a service charge? A service charge is a fee charged to customers for something specific, such as a bank charging a fee for using an ATM that’s not part of its network or a vendor charging a fee for making a payment with a credit card. It also may be called a customer service fee or maintenance fee.

Online banks also tend to offer higher rates of interest on your savings balance. Banks also waive the fee if you set up repeating automatic deposits of a certain amount from your checking to your savings, which most people opt to do anyway.

Note that some of these banks only waive or reimburse ATM fees if you open special accounts or deposit large balances. We also took a look at some of the higher-yield savings account options provided by major banks. These have variable APY rates that go up according to how much money you keep in your account and whether or not you own a qualifying checking account at the same bank. Most also have higher monthly fees than standard savings accounts, as well as much higher minimum balance requirements for their waiver options. By law, if several leaseholders must contribute to the same costs under the terms of their leases, the money they pay must be held in trust and ideally in one or more accounts.

What is a debit service charge?

A monthly maintenance fee is a fee charged by a financial institution to a customer if certain requirements aren’t met. For example, some banks may charge a monthly maintenance fee if your account balance is under a certain threshold.

Capital One 360 is the online avatar of Capital One Bank, but the two have many differences, particularly in the fee category. Most notably, Capital One 360 doesn’t charge fees for any international ATM transactions. This is in addition to the free use of over 39,000 Capital One or Allpoint ATMs in the U.S.

Incidental fees, which are charged for specific services, often hide in the fine print of fee schedules, which not all banks make readily available. Bank fees may vary from monthly service fees of around $5 to stop payment and insufficient fund fees of as high as $35.

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Avoiding fees on your savings account is important if you wish to maximize the interest your money earns, especially with today’s low interest rates. Even a small deduction from your principal can become a significant loss over time. In recent years banks have expanded their checking account services to include online and mobile banking. With checking accounts, there’s no limit to how often you can access your money.

Some banks waive the fee for infrequent offenders, and others simply decline the transaction. But rather than opting into overdraft protection, see if you can link another account, such as a savings account to your checking account so funds can be automatically transferred as needed. Or inquire about an overdraft line of credit with a low interest rate if one is available. Ally Bank is well-known for its diverse, low-cost product line, from no-fee checking and savings account to itshigh-yield CDs, home and auto loans and investment services, which include commission-free ETFs.

Almost all of these banks charge monthly maintenance fees for checking accounts, but in most cases, these fees can be waived if certain conditions are met. These conditions typically require a minimum daily or average balance or a monthly direct deposit of a specific amount.

Finally, the minimum daily balance requirement, which starts at $300 for standard accounts at the largest banks, creates an incentive for you to maintain some amount of money in the savings account. Banks charge monthly checking account maintenance fees that vary, from as little as $6 to as much as $15 per month, to account holders who don’t meet minimum balance or monthly deposit requirements. We looked at the fees charged by 10 banks across 16 no interest checking accounts and 15 high yield checking accounts.

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This combination of fee waivers — along with its basic, no-fee checking and savings accounts for balances of just $25 or more — make TIAA Bank a strong contender. Since all of the banks on this list charge no domestic ATM fees, rankings were based on supplemental factors. Other considerations included the overall fee structure of checking and savings accounts at the bank, the APY paid on checking and savings accounts and the level of additional banking features and benefits the bank provides. With few or no physical branch locations to pay for, online-only options for savings accounts generally require no maintenance fees or minimum balance, though they do charge excessive withdrawal fees similar to traditional banks.

bank service charge definition

  • When you open a checking or savings account with a bank, the bank charges a monthly fee known as a maintenance fee.
  • Banks also charge service charges for using the ATM of a competing bank, or when initiating a wire transfer.
  • The banking industry charges a number of different services charges, which are typically set at a flat, standard rate.

The banking industry charges a number of different services charges, which are typically set at a flat, standard rate. When you open a checking or savings account with a bank, the bank charges a monthly fee known as a maintenance fee. Banks also charge service charges for using the ATM of a competing bank, or when initiating a wire transfer. Needham Bank may not be a household name, but it offers one of the best checking accounts in our listings.

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bank service charge definition

Unlike savings accounts, you can withdraw, transfer, write checks, and make debit card charges as often as you’d like. Bankrate’s recent survey found that 41 percent of non-interest bearing accounts don’t charge monthly service fees and impose no balance requirements. The majority of non-interest accounts will waive fees under certain conditions, such as direct deposit.

Banks provide this service to cover purchases that you can’t pay for due to a too-low account balance. Sure, you won’t have to pay a NSF fee and the bank will cover the funds, sparing you the embarrassment of watching your debit card be declined.

Service charge

Helping the bank rank on this list is the fact that its checking account has no minimum opening deposit, no minimum balance requirement and no monthly fees. TIAA Bank has an 80,000-strong domestic ATM network that is entirely free of charge for customers. Additionally, the bank will rebate up to $15 per month in out-of-network ATM fees. Those willing and able to carry at least a $5,000 average daily balance qualify for unlimited ATM fee reimbursement.

Service charge example

This helps make Capital One 360 one of the best overall banks for those seeking a fee-free experience, as the bank also offers no-fee, no-minimum checking and savings accounts. Rounding out our list of banks that provide easy access to fee-free domestic ATMs is State Farm Bank.

bank service charge definition

How do I avoid monthly maintenance fees?

The NB Checking account charges no monthly fees, has no minimum balance requirements, pays interest and offers unlimited ATM fee reimbursement anywhere in the world. Combined with complimentary checks, mobile and online servicing and person-to-person transfer capability, the NB Checking account is a great option for international travelers. Typical savings accounts come with a monthly maintenance fee and an excessive withdrawal fee; both can be avoided if you meet certain conditions in using your account.

This bank doesn’t charge any ATM fees and will rebate up to $10 per statement cycle in both foreign and domestic ATM fees levied by third-party operators. If you make a single direct deposit to your account in any given month, the bank offers unlimited ATM fee rebates.

However, just 8 percent of checking accounts that pay interest have no minimum balance requirements and impose no monthly fee. To clear checks and transfer funds, banks use Automated Clearinghouse Services, or ACS, a nationwide network operated by the two national ACH operators – the Reserve Banks and the Electronic Payments Network. However, they tend to have lower rates than savings and money market accounts — if they pay interest at all. The list is by no means comprehensive, but it includes some of the most well-known financial services providers.

Savings Account Fees: What They Are and How Much They Cost

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