Beware of Banking Fees

ngpf.org Last Updated: 11/11/26

High School Personal Finance: Semester Course

Learning Objectives

Students will be able to…

Identify common checking and saving account fees and how to avoid them

Explain how overdraft protection works and the impact of overdraft fees

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Intro

How much are the average overdraft, service, and out-of-network ATM fees?

ngpf.org 10/31/25

Q:

BANKING

QUESTION OF THE DAY

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BANKING

Overdraft: $26.77

Monthly service fee: $15.65

Out-of-network ATM: $4.86

A:

QUESTION OF THE DAY

Source: Bankrate

FOLLOW-UP QUESTIONS

1. Do these average fees seem reasonable to you? Why or why not?
2. Why do you think banks charge a fee to use their ATM for users who don’t have an account at their bank?
3. What steps can you take to avoid banking fees and penalties?

Learn It

Common Banking Fees and How to Avoid Them

Banks make money in a lot of ways, and one of them is charging you fees. The good news? Most bank fees are avoidable if you know what to look for.

Seven common bank fees:

• Monthly maintenance fee: A flat charge just for having the account. Many banks waive it if you set up direct deposit or keep a minimum balance. Almost a third of checking accounts charge nothing at all.
• Out-of-network ATM fees: Using an ATM that isn't part of your bank's network costs around $5 per withdrawal on average. Your bank charges one fee, and the ATM owner charges another. These fees apply regardless of whether you withdraw from your checking or savings account.
• Excessive transaction fees: Some banks limit how many withdrawals or transfers you can make from a savings account each month, usually six. Going over can cost $3 to $25 per transaction.

Common Banking Fees and How to Avoid Them

• Overdraft fees: If you spend more than you have and your bank covers the difference, the average fee is about $27 per transaction. Several banks have stopped charging this fee entirely.
• Insufficient funds (NSF) fees: If your bank declines a payment because you don't have the money, you can be charged up to $35.
• Wire transfer fees: Sending money by wire can cost $16 to $35. Free apps like Zelle and Venmo handle most everyday transfers between people in the U.S.
• Check ordering fees: A box of 200 paper checks runs $20 to $60 from most banks. A few accounts include free checks.

Common Banking Fees and How to Avoid Them

How to avoid fees:

• Compare accounts before signing up. Look for "no monthly fee" or accounts that waive the fee with direct deposit.
• Use only your bank's ATMs, ask for cash back at the register when paying with your debit card, or pick a bank that reimburses fees from other networks.
• Set up low-balance alerts on your phone so you don't accidentally overdraw your account.
• Use peer-to-peer apps instead of wire transfers when possible.

Free checking isn't a hidden secret. The trick is knowing the fees exist and shopping around before you open an account.

Avoiding Bank Fees

How can you avoid a monthly maintenance fee?

Sentence Starter: To avoid a monthly maintenance fee, I could...

Out-of-Network ATM Fees

What is the average fee for using an out-of-network ATM?

Sentence Starter: The average fee for using an out-of-network ATM is...

Excessive Transactions Fee

What is an excessive transactions fee?

Sentence Starter: An excessive transactions fee is charged when...

Comprehending and Avoiding Bank Fees

Which fee on this list will be the most challenging for you to avoid?

Sentence Starter: The fee that I might find most challenging to avoid is...

Understanding Overdraft Fees and Protection

One of the fees that can show up on your checking account statement is the overdraft fee.

Watch this video to learn more about this fee.

Video: FinCap Friday: Is it Protection or Deception?

Comprehending Overdraft Fees and Protection

True or False: Overdraft protection is a required feature of most checking accounts with no ability to opt out.

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Drawbacks of Overdraft Protection

Why do so many people still sign up for overdraft protection when it is not always beneficial for them to do so?

Sentence Starter: People might still sign up for overdraft protection despite its drawbacks because...

Do It

Activity: Analyze Overdraft Fees

Now that you know what an overdraft fee is, let’s look at how your account would be affected when you overdraw your account using different overdraft options offered by a bank.

Follow the directions on the worksheet to complete this activity.

Activity: ANALYZE: Overdraft Fees

Exit Ticket

Exit Ticket 1: Overdraft Fees

Which of the following statements is TRUE about overdraft fees?

1. You are legally required to have overdraft protection for your account
2. They are charged if you fail to meet the minimum balance requirement
3. You are charged when more money is withdrawn from your account than it has available
4. They are a one-time payment made by the bank to the account holder

Exit Ticket 2: Avoiding Monthly Maintenance Fees

All of the following are ways that you could potentially avoid a monthly maintenance fee on your account EXCEPT…

1. Meeting a monthly minimum balance requirement
2. Avoiding out-of-network ATMs when you need cash
3. Setting up direct deposit for your paycheck
4. Finding a bank that offers accounts with no monthly maintenance fee

Exit Ticket 3: Avoiding ATM Fees

All of the following are ways to avoid ATM fees EXCEPT…

1. Avoiding out-of-network ATMs
2. Finding a bank that reimburses you for ATM fees
3. Asking for cash back when you make a purchase in a store
4. Withdrawing money from your savings account instead of your checking account