Many retirees watch big expenses carefully, but small bank fees quietly drain money month after month.
These three bank fees likely won’t make or break your finances, but a few hundred dollars per year in additional costs can sting. Conducting a brief audit of your bank accounts helps you avoid fees—go back through the past three months of statements to see which fees show up. Then create a plan to avoid each one and call the bank with any questions. Here are three common bank fees retirees encounter that are easy to avoid with simple planning.
Monthly maintenance fees on checking and savings accounts
Many bank accounts have monthly maintenance fees you can waive by making a certain amount of monthly deposits or maintaining a sufficient balance. However, retirees don’t have regular paychecks to fulfill direct deposit requirements, and spending on various living costs can drop them below minimum balance thresholds.
Social Security and pension deposits might count as direct deposits, but you should reach out to your bank to confirm. You can also switch from an older account to a no-fee account with fewer features that protects you from monthly maintenance fees.
Overdraft and nonsufficient funds fees
A single overdraft fee can exceed $30, depending on your bank. These fees show up when you overdraw your bank account. Nonsufficient funds fees work similarly.
Automatic bills, medical copays, subscriptions, and delayed deposits can lead to timing issues that trigger overdraft and nonsufficient funds fees. Even a careful budgeter can incur this fee when income arrives on a fixed schedule but expenses are scattered throughout the month.
Some banks have reduced or eliminated overdraft and nonsufficient funds fees. Switching to a bank that has done away with these fees often saves money in retirement.
ATM and paper statement fees
Out-of-network ATM withdrawals often result in extra fees, and you may also face a monthly fee if you want paper statements. These convenience fees add up over a year and are easy to avoid.
E-statements are generally free, and switching over is easy—you can download and print e-statements to ensure physical copies without the monthly fee. ATM fees are also easy to avoid if you only use your bank’s ATM locator.
Some accounts have out-of-network ATM fee reimbursements. Check with your bank to see if it reimburses some out-of-network fees and if it has a vast ATM network. Some banks have more than 60,000 ATMs in their networks, making it much easier to avoid out-of-network fees in the first place.