Personal Finance / Unit 3: Banking
3.4 Bank Fees and Choosing an Account
Notes
Fees can quietly drain an account. Compare costs before you open one.
- Common fees: monthly maintenance fee, out-of-network ATM fee, overdraft fee, minimum-balance fee.
- Many banks waive the monthly fee if you keep a minimum balance or have direct deposit.
- Compare fees, interest rates (APY), convenience, and whether the institution is insured.
- Example: a $8 monthly fee costs $8 \times 12 = 96$, so $96 per year.
- Example: an ATM fee of $3 charged by the ATM owner plus $2 charged by your bank is $5 per withdrawal. Four withdrawals cost $20.
Practice
An account charges a $5 monthly fee. What is the cost for one year?
$5 \times 12 = 60$.
Which choice is most likely to help you avoid a monthly maintenance fee?
Many banks waive the fee when you meet their requirements.
Sam uses an out-of-network ATM 3 times a month. Each use costs $3 from the ATM owner and $2 from his bank. What does this cost per month?
Each use costs $5, and $5 \times 3 = 15$.
Ready for more? Take the Unit 3 test.