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. 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. Incidental fees, which are charged for specific services, often hide in the fine print of fee schedules, which not all banks make readily available.
- Monthly Fees for Standard Savings Accounts
- Monthly Fees for High-Yield Savings Accounts
- Online Savings Account Fees
- Withdrawal Fees for Savings Accounts
- Other Incidental Savings Account Fees
The most common type of savings account is the standard, no-frills version offered by each major bank, and the most common fee on a standard savings account is the $4 or $5 monthly maintenance fee, which covers the cost of maintaining branch locations and in-person services. Fortunately, you have multiple ways of avoiding that fee.
|Name||Min to Open||Monthly Fee||Monthly Fee Waivers|
|Bank of America Regular Savings||$25||$5|
|PNC Regular Savings||$25||$5|
|TD Simple Savings||$0||$5|
|US Bank Standard Savings||$25||$4|
|Wells Fargo Way2Save Savings||$25||$5|
The easiest waiver option is to maintain a checking account at the same bank as your savings account, although if you plan to open a new checking account just to waive your savings fee, you should remember that checking accounts come with their own fees. 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. 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.
Because these requirements align with the way most people expect to use savings accounts, waiving the monthly fee isn't usually a big challenge. However, you should still be careful to avoid monthly fees. The low APY of standard savings accounts means that even an expense of $4 to $5 cuts deeply into the interest earned on your balance. Assuming no deposits or withdrawals, a savings balance of $10,000 held at today's typical APY of 0.01% and compounded daily would take 10 years to earn $5, enough to cover just 1 month of maintenance fees.
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.
|Name||Min to Open||Monthly Fee||Monthly Fee Waivers|
|Chase Plus Savings||$100||$20|
|Citibank Savings Plus||$100||$4.50|
|TD Select Savings||$0||$15|
|Wells Fargo Platinum Savings||$50||$12|
Unlike standard savings accounts, not all high-yield savings accounts allow you to avoid their monthly fee just by maintaining a corresponding checking account; instead, they may offer no other waiver option other than to meet the minimum balance.
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. Online banks also tend to offer higher rates of interest on your savings balance.
|Name||Min to Open||Excess Withdrawal Fee||Outgoing Wire Fee|
|Ally Online Savings||$0||$10||$20|
|Barclays Online Savings||$0||$5||-|
|Capital One 360 Savings||$0||-||$30|
|CIT Bank High Yield Savings||$100||-||$0|
|MySavingsDirect High Interest Savings||$0||-||$30|
|Salem Five Direct eOne Savings||$100||$10||$20|
|Synchrony High Yield Savings||$0||$20||$25|
However, the lack of physical branch locations, combined with a reliance on third-party ATM networks, means that some online bank accounts do not allow cash deposits. Your deposit options in such cases are limited to direct deposit, wire transfer, linked account transfer and mobile or mailed check deposit, while withdrawal will require an ATM or online transfer to another account.
Most online banks do not charge for any of these processes, but when comparing fees for online and traditional banks, you should be aware that you will be more dependent on such deposit services with an online account, and so any increases in their fees will have greater impact.
Withdrawing money has its own set of fees. While you are legally allowed up to 6 outgoing transfers per month, some banks will allow you to make more withdrawals for a fee. For those online savings accounts that permit wire transfers, incoming wires are generally free while outgoing wires can cost anywhere from $20 to $30 at certain banks.
Federal regulations allow no more than 6 withdrawals each month from savings accounts, excluding withdrawals made in person, at ATMs or by mail. Banks typically impose their own limits, allowing fewer than 6 transactions and charging $5 to $15 per extra withdrawal up to 6. A few institutions like Capital One and Citibank will not charge a fee but simply deny all extra withdrawals. Some institutions may even respond to 7 or more withdrawals from savings accounts by closing them or converting them into checking accounts.
You can sometimes have withdrawal fees waived if you meet a minimum daily balance set by the institution. These tend to be much higher than the daily minimum needed to avoid monthly fees; for example, Bank of America’s Regular Savings Account requires a minimum daily balance of $300 to waive the monthly maintenance fee and $2,500 to waive the excessive withdrawal fee.
The fee schedules published by most banks list dozens of other incidental fees, which are mostly consistent for all types of accounts. Many of the fees are intended to discourage certain customer behaviors, and you can avoid paying them with conscious management of your banking habits.
|Bank Name||Overdraft Fee||Stop Payment Fee||Returned Item Fee||Paper Statement Fee|
|Bank of America||$35||$30||$12||$0|
In general, online-only banks charge smaller amounts for each of these fees than traditional banks, and in some categories they charge no fee at all. We looked at some of the fees most common among banks and most likely to show up on your savings account statement. Check here for a rundown of the best options for savings accounts.
Most major banks charge you $35 per overdrawn or NSF item, while online banks can charge as low as $5 per item. Overdraft fees are incurred when a bank accepts a charge on your account that is larger than your remaining available balance; if the bank chooses to refuse the charge instead, you will be billed an NSF fee.
Such situations are more common with checking accounts, but savings accounts can also be overdrawn. Avoiding this fee will depend on how carefully and frequently you keep track of your account balance as your expenses roll in. In general, you will want to use a checking account for all your expenses, so that your savings account balance can grow and accumulate interest without interruption.
A stop payment is a request you can make to prevent a specific transaction or personal check you have issued from being paid out. Most banks charge $30 for this service, while online banks usually charge $15 to $30. While such situations may sometimes be unavoidable and unpredictable, you should do your best to make sure that you intend to back every transaction you authorize.
Any check or deposit that is returned or "bounced" will result in a fee of $12 to $15 for you, the recipient, as well as an overdraft or NSF fee for the person who wrote the check. This is the fee you will have the least control over, since it depends on the person sending the money to make sure that his or her account balance is sufficient to cover the transaction.
Some brick-and-mortar banks charge you $1 to $5 for mailing printed statements every month, though most of these banks let you opt out and receive free email statements instead. Online banks, of course, offer more sophisticated online banking options, and rarely mail statements to begin with. You can dodge statement fees by requesting paperless statements and accessing them online if you need to print hard copies.
Annual fees are maintenance fees assessed every 12 months, and inactivity or “dormancy” fees are charged after a certain amount of time goes by with no deposit or withdrawal activity from the account. As these fees are increasingly rare, you should not expect to run into them as a typical consumer, but you should always read the terms of your savings account closely to see if your bank is one of the few institutions that retains these fees.