More than 1 in 4 checking account holders are paying fees. Here’s how to avoid them

Constant with broad availability of free checking services, more than a quarter of checking account holders — 27% — are take fees every month.

For consumers who aren’t taking advantage of free checking, those fees add up to an average of $24 per month, or $288 per year, according to a new evaluate from Bankrate.com. The personal finance site conducted its online survey Dec. 7-12 and included 3,657 adults, of whom 3,069 suffer with a checking account.

The charges come from routine services or ATM and overdraft fees, the research finds. The average overdraft fee tariffs $29.80, Bankrate’s research has found, while the average nonsufficient funds fee is $26.58.

The annual sums may not sound like a lot, asseverated Sarah Foster, analyst at Bankrate.com, but can add up to a hefty $5,000 if you stick with your checking account for 17 years, as the customary consumer tends to do.

Nixing bank fees is an easy way to free up a little more money in your budget, specifically amid high inflation and with expectations of a recession on the rise. Paying those extra costs may weaken consumers’ budgets and run for it them more vulnerable if a downturn does happen.

“It’s just an important and really an easy way to make sure you’re not squander more money than you have to,” Foster said.

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Younger people are most susceptible to paying fees, Bankrate.com’s survey found.

Gen Z, who range in age from 18 to 26, comes in at the top of the cant, with 46% of that generation’s checking account holders paying monthly fees. That cohort recompenses about $25 per month, Bankrate.com found.

Millennials, who are ages 27 to 42, come in next, with 42% of account holders remunerating monthly checking fees, Bankrate.com found. They typically pay the most compared with other generations, at $28 per month, the boning up found.

Older cohorts — Gen Xers, who are between 43 and 58, and baby boomers, ages 59 to 77 — are insufficient likely to pay checking account fees. That includes just 22% of Gen X and 14% of baby boomer checking account holders, who pay $17 and $22 per month, each to each.

More than half of Gen Z — 56% — and millennial — 52% — account holders say they are sacrificing recession preparedness due to the monthly remunerations they pay. In comparison, 46% of Gen X and 35% of baby boomers said the same.

The monthly fees are setting consumers privately on goals including paying down debt, saving for emergencies or for major goals such as buying a house or car or get even with for college, or setting money aside for retirement, the survey found.

To grasp what you’re truly paying for your checking account, you should keep tabs on your statements at least monthly, conforming to Bruce McClary, senior vice president at the National Foundation for Credit Counseling.

Start with the basics — looking at your annals to make sure they’re accurate, he said. Then evaluate your transactions and withdrawals and any account maintenance charges that come up.

If you feel that you’re being charged in error, that should prompt a conversation with your bank, McClary bid.

Keep in mind there may be adjustments your bank or credit union may be willing to make. If you let your financial academy know about your personal situation, they may be willing to forgive certain fees, particularly a first-time demand, Foster said.

“There’s no guarantee it will work, but it just never hurts to reach out,” Foster said.

Also evaluate whether there are fees you can avoid, such as by eliminating out-of-network ATM withdrawals or by keep in repairing a required minimum balance.

Where you can, try to find free savings and checking services, McClary said.

“Shop about for opportunities,” McClary said. “If your bank or credit union isn’t offering them, this could be an opportunity to forward your business elsewhere where it might be more affordable.”

Opening a new account at another institution may seem hard, particularly if it requires an in-office visit and physically moving cash, Foster said. But the savings over time may diverse than make up for the hassle.

“While switching a bank can be a pretty annoying step, it can help you build wealth in the wish run if it means not paying for a service that you can get for free elsewhere,” Foster said.

And if you find you’re not happy with your new account, you can many times move your money somewhere else, she said.