4 Easy Ways to Avoid Paying Bank Fees

If you're like most other Americans, bank fees are one thing you could definitely live without. Fortunately, a lot of bank fees are avoidable. We asked four of our analysts how to get out of paying bank fees. Here's what they had to say.

Source: 401kcalculator.org via Flickr.

Patrick Morris: One simple and easy way to avoid paying monthly fees on your savings or checking account is to use a bank that doesn't charge them. And one of the easiest places to find one is to look for a bank without branches, and bank with your Internet browser instead.

For example, the Cashback Checking account from Discover Financial Services (DFS 0.87%) has no monthly fee and offers free access to 60,000 ATMs across the country, along with a variety of other benefits. There are no bank branches, but with mobile check deposit technology and other services, it's likely you may never need to visit a branch anyway.

Discover isn't alone. Ally Financial (ALLY 0.88%) also offers its no-strings-attached Interest Checking Account, with many of the same features as the Discover account -- except that, as of writing, Ally provides a lower interest rate on deposits.

And those two are just a small sample of the truly free checking accounts offered by banks that are able to do so because they don't have the expenses associated with bank branches.

If you feel as though you can do your banking without ever visiting a branch, then an online banking account may be just the thing to help you avoid paying those pesky bank fees each and every month.

Dan Dzombak: Most banks will waive all fees, including fees for using other banks' ATMs, if you maintain a certain minimum balance. The best way to avoid paying bank fees is to know what minimum balance you have to keep, or switch to a bank that has such a program if your bank doesn't.

Many Americans got used to free checking before the financial crisis. However, banks need to earn money to pay for their services. They make money by earning interest on the balance in your account and paying out to you less than they earn, but with interest rates basically at zero, some banks have started to charge a monthly fee. By having a large minimum balance in your account, your bank can essentially pay for providing banking services to you from the interest earned on your deposits.

Other banks have continued to pursue free checking, which is worthwhile to banks because it draws lower-income consumers. And lower-income consumers are worth attracting because the banks make money charging massive fees to those who overdraw their accounts. Matt has more on that...

Matt Frankel: Far too many American consumers pay one bank fee that is 100% avoidable: overdraft fees. And these can get expensive, too, ranging from $10 to $38 per offense, according to one recent study.

There are two main ways to avoid an overdraft fee, and the first way is to always know how much money is in your checking account. Balancing a checkbook is unfortunately becoming a thing of the past -- fewer than one-third of people do it. And while I'm not necessarily advocating the use of a paper checkbook for banking, you do need some way of knowing how much is in your account. With the mobile apps and online banking software available today, there's no excuse for not knowing roughly how much money is in your account.

The second way is to link another account (like a savings account) for overdraft protection. Basically, if you try to use more money from your checking account than you have available, the money is transferred from your other account to cover the cost. This still costs money, but a $10 transfer fee is better than a $30 overdraft.

Finally, if you're prone to overdrafts and just can't seem to get the problem under control, you may want to try an account that makes overdrawing impossible, like Bank of America's (BAC 3.35%) SafeBalance account. If you try to spend more than you have, the transaction is simply declined.

Whichever way you use to prevent them, overdrafts are one bank fee you should never pay.

Leo Sun: Many banks waive monthly fees if you keep your balance high enough or sign up for more services.

Wells Fargo (WFC 2.74%) waives its fee on everyday checking accounts for customers who simply sign up for direct deposits. Citibank waives its monthly fee for customers who exceed a combined average balance across several accounts. Therefore, if you're looking to invest in stocks, funds, and bonds, it might be wiser to do so within a single financial institution.

Meanwhile, JPMorgan Chase (JPM 2.51%) waives its fee for Chase customers who set up at least one automatic monthly transfer of at least $25 to their savings accounts -- which can passively boost savings while eliminating fees.

According to a recent survey from the American Bankers Association, 62% of 1,000 respondents paid no banking fees at all in 2014. Twelve percent said they paid $3 or less per month, while only 7% paid over $10. Therefore, if you're paying too much, it may be time to raise your overall balance, sign up for more services, or simply take your business elsewhere. Lastly, don't be afraid to dispute unfair fees -- Credit.com reported that 44% of 1,000 survey respondents have successfully persuaded a financial institution to erase fees.