Common Banking Fees and How to Avoid Them 

Overdraft fees

Overdraft fees may occur when you spend more than your account balance. You must agree to allow the bank to let you overdraw your account with debit card and ATM transactions and charge an overdraft fee. The bank can’t charge you overdraft fees if you don't opt into this. This option is only available for debit card and ATM transactions. It is not available for other forms of payment, like paper checks and electronic transfers.

To avoid overdraft fees, consider:

• Setting up low-balance alerts
• Enrolling in overdraft protection – this won’t necessarily eliminate fees but can help you reduce or avoid them
• Opting 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 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 banks 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 your paycheck directly deposited into the account can keep it from becoming dormant.

Nonsufficient funds fee

Also known as an NSF fee, you may be charged this 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. If the bank covers the payment, they may charge an NSF fee.

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 checks or electronic transfers.

Check fees

Banks can charge a few different fees for checks. They may charge a fee if you write more than a specified number of checks in a month. They may also charge you for ordering and printing checks. 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 online when possible.

What to do if you’re charged a bank fee

It is important to understand all the fees related to an account before opening the account. Sometimes, if it is 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.

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.