You’ve probably spent a significant amount of time and effort trying to avoid paying banking fees. Unfortunately, these fees are extremely difficult to avoid and they really add up. Last year, the Los Angeles Times reported that fees alone made up more than a third of banks’ total revenue. Worse yet, these fees often far exceed any interest your bank is paying you, meaning your banking relationship is eroding your wealth – not building it. Paying $100 in banking fees annually (which is not at all outside the realm of possibility) would cost you $1,000 every decade, and that’s before you factor in the interest you could otherwise earn on that sum.
At Wealthfront, it’s no secret we don’t like fees. Fees are essentially negative earnings, and they can destroy your return. It’s important to be aware of any banking fees you’re paying, especially in combination with the interest your bank pays you on your deposits. To get the most out of your banking relationship, you’ll want a competitive interest rate and no fees. Unfortunately, most banks won’t give you that option.
Below we describe some common kinds of fees banks charge to shed some light on how banks typically operate. Some of these fees are for checking accounts, some are for savings accounts – and all of them have the potential to eat into your hard-earned cash.