Common Banking Fees and How to Avoid Them 

Feb 12, 2026

Bank fees are charges that financial institutions may apply to customers for services like account maintenance or certain transactions. These fees can be one-time or recurring and are a common part of managing finances.

Understanding why these fees are applied to your bank account and how to avoid them can help you better manage your money. Let’s walk through some common banking fees and strategies for avoiding them.  

Monthly maintenance fees

Some banks charge a monthly maintenance fee, also called a monthly service fee, to keep a checking or savings account in service. However, many banks may waive this fee if you meet specific criteria, like maintaining a minimum balance amount or enrolling in direct deposit. Check your bank’s requirements to see how you can avoid paying a monthly maintenance fee.

Overdraft fees

Overdraft fees may occur when you spend more than your account balance. For debit card and ATM transactions, you must opt-in to allow the bank to let you overdraw your account and charge an overdraft fee. The bank can’t charge you overdraft fees if you don’t opt into an overdraft feature. However, your bank may then refuse your transaction if it will overdraw your account. Typically, you can only overdraw for debit card and ATM transactions, so you won’t run into overdraft fees for other forms of payment, like paper checks and electronic transfers; For these types of transactions the bank would decline the transaction and  you could be charged a non-sufficient funds (NSF) fee.

To avoid overdraft fees, consider:

  • Setting up low-balance alerts: When you're aware of your balance, you may be able to take steps to avoid overdrafts.
  • Linking your checking and savings accounts: Some financial institutions may let you link your checking and savings accounts, so if your checking balance doesn’t cover your transaction, your savings account balance can help fill the gap.
  • Opting out of overdraft coverage: If you don't want to risk fees, you can opt out of overdraft coverage to prevent ATM and debit card transactions from going through when funds are insufficient.

ATM fees

Using out-of-network ATMs could result in fees from both your bank and the ATM owner. To minimize ATM fees, you could:.

  • Stick to in-network machines.
  • Look for banks that reimburse out-of-network ATM fees.
  • Withdraw larger amounts, and less frequently to reduce the number of transactions.

Stop payment fees

This type of fee occurs when you ask your bank to stop payment on a check before it clears. It can also happen when you stop an electronic transfer or a recurring payment (for example, a monthly utility bill payment) before it’s processed.

Keeping close track of your payments and transactions can help you avoid having to stop payments. Double-check all details when you write a check or authorize a payment.

Inactivity fee

Some financial institutions may charge an inactivity fee due to lack of activity for a certain period. Before charging an inactivity fee, sometimes called a dormancy fee, the bank may notify you that the account is inactive.

To avoid inactivity fees, use your account regularly to make transactions. Setting up an automatic monthly transfer or having part of your paycheck directly deposited into the account can keep it from becoming dormant.

Non-sufficient funds fee

You may be charged an NSF fee when you don’t have enough funds in your account to cover a payment, usually in the form of a check or electronic transfer.  This fee is charged when the bank declines the transaction.

You can avoid NSF fees by setting up account balance alerts, so you receive a notification when your balance gets below a certain amount. You can also check your bank account often to make sure your balance covers any pending checks or electronic transfers.

Check fees

Banks can charge a few different fees for checks. You may be charged a fee for ordering and printing new checkbooks. Certain types of checks, like certified or cashier’s checks, can come with a fee.

To avoid check fees, consider paying your bills and sending money electronically when possible.

What to do if you’re charged a bank fee

It's important to understand all the fees related to an account before opening one. Sometimes, if it’s the first time you’ve noticed a charged fee, it may be worth contacting your bank. Some banks may be willing to waive some fees as a courtesy.

If paying fees becomes a recurring issue, it may be time to switch to a different account or bank. Research your options and find an account that better aligns with your financial needs.

Avoiding bank fees to improve your financial well-being

Bank fees can be a real inconvenience but knowing how and why they’re charged can help you take the right measures to prevent them. Whether that means maintaining a high enough balance to avoid maintenance fees, overdraft fees or an NSF fee, or going out of your way to use an in-network ATM to withdraw cash, you may be able to minimize fees if you know your bank's requirements. If you're unsure about your financial institution’s policies, reach out to a representative for more clarity.

Disclosure: This article is for general educational purposes. It is not intended to provide financial advice. It also is not intended to completely describe any Citi product or service. You should refer to the terms and conditions financial institutions provide for various products.

Additional Resources

  • Citi Financial Pathways

     

    Utilize these resources to help you assess your current finances & plan for the future.

  • FICO® Score

     

    Learn how FICO® Scores are determined, why they matter and more.

  • Glossary

     

    Review financial terms & definitions to help you better understand credit & finances.

Important Information