what account fees should you avoid with savings accounts

Opening a savings account is a fantastic step towards your financial goals, but it’s meant to grow your money, not shrink it. Unfortunately, some fees can quietly eat away at your hard-earned savings. Knowing what account fees should you avoid with savings accounts is the key to ensuring your money works for you.

Steer Clear of Monthly Maintenance Fees

One of the most common culprits is the monthly maintenance fee. Many banks charge a flat fee just for having the account open. The good news is that these are often avoidable. Look for accounts that waive the fee if you maintain a minimum daily balance or link it to another account, like a checking account, at the same bank. If your current bank charges this fee and you don’t qualify for a waiver, it might be time to shop around.

What Account Fees Should You Avoid with Savings Accounts

Beyond monthly fees, several other charges can sneak up on you. Be particularly mindful of excessive transaction fees. Federal Regulation D typically limits certain types of withdrawals or transfers from savings accounts to six per month. Exceeding this limit can result in a fee for each additional transaction, and if it happens consistently, the bank could even convert your account to a checking account. Always track your withdrawals to stay within the limit.

Don’t Let Low Balances Cost You

Some accounts have a minimum balance fee that kicks in if your savings dip below a certain amount. This fee can be especially frustrating when you’re just starting to build your savings. When choosing an account, look for one with a low or no minimum balance requirement to avoid this penalty. This makes it easier for your savings to grow from the ground up without any pressure.

Other Fees to Watch Out For

Keep an eye out for less common, but still costly, fees. These can include charges for paper statements, using an out-of-network ATM, or even for closing your account shortly after opening it. While these might seem small, they add up over time. Opting for electronic statements and using your bank’s ATM network are simple ways to avoid them.

By being aware of these potential fees, you can make an informed choice and select a savings account that truly helps your money flourish. A little research upfront can save you a significant amount over the long run, putting you firmly on the path to reaching your financial dreams.