When looking for a place to put the money they saved, many people chose savings accounts. The main thing most look for when choosing the ideal savings account for them are the interest rates. Yes, this is probably the most significant factor of this type of account, but there is another important thing to take into consideration: fees. Many savings accounts charge unnecessary fees, diverging from the end goal of this type of account, which is saving money. Nowadays, there are many options of savings accounts that have very low fees, if they have fees at all. In this article, you can learn about the most common fees some savings accounts charge and check some great options that have low to no fees.
A savings account is a type of bank account where you can deposit the money you are not spending. You deposit funds into this bank account, the bank lends the funds, and you later get a portion of the interest rate. This form of account is a great way to save money for unforeseen costs, personal objectives, or both. While checking accounts are intended for day-to-day banking, such as paying bills, savings accounts are solely for the purpose of saving money in a safe and, if possible, profitable manner.
Most, if not all, banks offer some sort of savings account, and most of them are very similar. It works like this: you deposit your money at the account, banks lend this money and later share the interest rate with you. There are many different types of savings accounts. The most well-known are the savings accounts offered by traditional banks. These tend to have lower interest rates and - as we will soon see – more fees. Then there are high-yielding, money market, and tailored savings accounts, which might charge fees too. Then, finally, there are digital and crypto-based savings accounts that usually have lower fees.
Examining the fee structure is a critical task that a customer should conduct before selecting a savings account. Banks will not necessarily be fully transparent on their fees, and you might need to obtain this information directly from them and through research. It's important that you do your due diligence to don't be caught off guard by any unexpected charges to your account.
A single fee might not seem significant, but a series of unanticipated charges over time can gradually eat away your savings. When picking your savings account, be sure you're not being charged fees that are far higher than the standard. In addition, there are many online and mobile savings accounts that barely charge fees - and some that don’t have any fees. Thus, if you are open to these new models of savings accounts, you can avoid these unnecessary costs.
There are some types of fees that are most commonly found in savings accounts. These fees are harder to be avoided and, sometimes, a bank will try to hide fees in the fine prints. So, keep an eye for these common fees found at savings accounts that you can often escape from:
The fees charged to pay the maintenance of an account are extremely common in more traditional savings accounts. Maintenance fees can vary dramatically depending on the bank, but typically there are around $6 a month. Often, these monthly fees can be waived if you meet a certain balance requirement. In other cases, a bank will keep charging them regardless of your balance.
The good news is that these fees are the easiest ones to avoid. Most online and crypto-based savings accounts don’t charge maintenance fees. This is possible because online financial institutions don’t have the expenses of branches, which means they have fewer costs to pass to their clients. Student savings accounts also tend to don’t charge these monthly fees.
When using your own bank’s ATMs, you will never be charged a fee. However, some banks have small charges for withdrawing money from other institutions’ ATMs. An ATM fee usually costs from $2.50 to $5. This, along with an extra fee charged by the other ATM for not being an account holder, may make withdrawing money from your savings account very pricey.
This fee is slightly harder to avoid, but some banks don’t charge customers non-native ATM fees. This means that account holders will only have to pay the fee on the same ATM they are using. National/international banks, as well as some credit unions, will occasionally have a monthly stipend in ATM fee reimbursements to customers with high savings accounts.
Online savings accounts rarely charge this fee. However, some of them don’t have many ATMs from which you can access your account – if they have any. Because of that, you might have to pay the actual ATM fees for not being an account holder more often if you have an online savings account. A way to go around that is to have a checking account in a bank or credit union with more ATM access, and then transfer funds to these accounts before using an ATM.
Many savings accounts limit the withdrawals and transfers you can make in a month. This decreases one of the most attractive features of savings accounts: liquidity. Some savings accounts, instead of limiting withdrawals and transfers, charged you a fee once you passed a certain number or amount. These are known as withdrawal and transfer fees.
It's very difficult to completely avoid these fees. Yet, there are some types of savings accounts that charge more of them than others. Money market accounts, for example, usually charge very high withdrawal and transfer fees. Traditional bank accounts also tend to charge this type of fee, as well as online savings accounts.
However, that doesn’t mean that there aren’t savings accounts without withdrawal and transfer fees. If you search well, you can find some specific accounts that don’t charge this type of fee. Crypto-based savings accounts, for example, rarely charge you these fees. That is because the volatile and fast-pacing culture of the cryptocurrency market made liquidity a must-have for its clients.
If a customer's withdrawal exceeds the account's available credit, overdraft fees apply. These are usually the costliest fees charged by a bank. Though the fee is usually between $35 and $36, some banks charge as little as $20. You will hardly avoid this type of fee in savings accounts, but as mentioned, some banks do charge lower values. If you are afraid of an overdraft, many savings accounts offer the option of not being able to withdraw more money than you have. This feature can be a way to make sure you don’t have to pay overdraft fees.
Now that you know what fees to look at before opening a savings account, you are ready to choose the best account for your financial needs. There are many other factors that one might take into consideration when picking a savings account. Interest rate, minimum balance, convenience, and so other factors can also influence this decision. So, make sure your chosen savings account offers everything you are looking for. Finally, to help you with this process, here are the best low fees savings accounts: