Savings accounts can be a great way to set cash aside for future purchases, travel, or an emergency fund while earning interest in the process. If your goal is to maximize your savings efforts, though, avoiding unnecessary bank fees and expenses is key.

Bank account fees are common but can often be avoided with the right strategy, particularly when it comes to savings accounts. Here’s a look at the bank account fees you might encounter, why financial institutions charge them, and how to avoid them.

What are bank account fees?

Bank account fees are added costs charged to a number of different financial accounts, including checking accounts, savings accounts, and money market accounts. Banks say that they charge these fees to help cover administrative costs for special or optional services, support daily operations, and boost the bank’s earnings along the way. (OK, they don’t usually say that last part out loud, but let’s be honest here.)

A bank account fee is usually charged directly to the account in question and debited from its balance. Some fees, such as those for insufficient funds or card replacement, are only charged when applicable. Others, like a monthly account maintenance fee, may be ongoing and charged on a monthly basis unless waived.

Why banks charge fees

Put simply: Fees serve as added revenue for banks. If a bank charges a fee for monthly maintenance or an optional service, the institution can put those funds toward operational expenses and even generate additional income…all at the customer’s expense. After all, a bank is a business, and a business’s goal is to earn money.

Recent data shows that banks have become increasingly dependent on fees over the years, especially those charged for overdrafts and non-sufficient funds (NSF). In fact, according to the Consumer Finance Protection Bureau (CFPB), NSF and overdraft fees account for about two-thirds of a typical bank’s fee-based revenue.

In its 2021 annual report, for instance, JPMorgan Chase reported that it received more than $3.8 billion in lending- and deposit-related fees from its community and consumer banking clients. That same year, Wells Fargo took in more than $5.47 billion in service fees from its consumer banking customers, or just under 7% of the banking giant’s total revenue. And at Bank of America, deposit account fees of over $6.2 billion represented a little over 7% of the bank’s total revenue in 2021.

So what does this mean for consumers? Well, even though consumer watchdog groups and the CFPB are keeping a close eye on certain bank fees, it means that these added costs probably aren’t going to disappear anytime soon. You can often find ways to avoid these fees altogether based on the accounts you choose and how you manage them (more on that in a minute).

How do I know which fees my bank charges?

Financial institutions are required by federal law to explicitly disclose any fees that are charged on depository or transactional accounts, such as your checking or savings account. These fees are typically outlined in an account disclosure, which you’ll receive — and perhaps even sign — when opening your account. You can also request a list of fees from the institution at any time.

If these listed fees (or policies surrounding those fees) change in the future, the bank is required to send an updated disclosure outlining the new changes and how they may affect you.

Which fees do banks charge on savings accounts?

Some of the major fees that can apply to all types of bank accounts include:

• Monthly account maintenance: Billed each statement cycle, this fee is your cost for owning the account.

• ATM transactions: If you use an out-of-network ATM to check your balance or withdraw cash, your bank may charge you a fee (in addition to any fees paid to the machine’s owner).

• Overdrafts: Your bank may approve transactions that exceed your current account balance, but will charge an overdraft fee for the service.

• Wire transfers: Compared to an ACH transfer, incoming and outgoing wires to or from other financial institutions will often incur a fee.

• Debit card replacement: Lose or damage your debit card? Your bank may charge you to replace it.

• In-person teller services: If your bank has a local branch, you can use tellers to manage your account. Some banks may charge a fee for doing so, though.

• Special services, like money orders or cashier’s checks: If you request optional products or services from your bank, such as cutting a cashier’s check or stopping a payment, you may incur added fees.

You are unlikely to encounter all of these with a depository account, though. For savings accounts, the most common fees are usually recurring and related to monthly maintenance or a minimum balance requirement. That’s because savings accounts aren’t intended to be transactional in nature and don’t usually offer ATM/debit cards or offer overdraft protection.

How to avoid savings account fees

Here’s a look at the most common savings account fees and how to avoid them.

These fees may apply whether you have a traditional savings account or a high-yield savings account (HYSA). The difference is that HYSAs are frequently offered by online-only banking institutions, meaning that you won’t have as many options for in-person services. To make up for a lack of brick-and-mortar branches, online banks may provide additional services or online tools for HYSA account holders, such as easy bank-to-bank transfers or no monthly fees.

How to avoid checking account fees

Since checking accounts are transactional — meaning they are designed to act as an every day, on-demand account that sees frequent withdrawals and deposits — you won’t have to worry about maximum monthly withdrawal limits. However, many institutions allow for overdraft protection on checking accounts and ATM access, so these are two types of fees you may encounter.

The less your bank charges you in fees on your savings (and even checking) account, the more of your own money you’ll keep in your pocket. Avoiding fees may mean shopping around for the right banking institution and account, maintaining a minimum monthly balance, meeting certain transaction limits, or watching your cash flow throughout the month. If those aren’t good options for you, consider a no-fee savings account.