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How to Avoid Common Savings Account Fees

Managing your savings account effectively is crucial for maintaining financial health. However, various fees can eat into your hard-earned money if you’re not careful. At O1ne Mortgage, we believe in empowering our clients with the knowledge they need to make informed financial decisions. In this article, we’ll explore seven common savings account fees and provide actionable tips on how to avoid them.

1. Monthly Maintenance Fee

Monthly maintenance fees are charges that banks or credit unions may impose to keep your savings account active. These fees can range from $5 to $25 per month, depending on the type of account and the financial institution.

How to Avoid It

• Maintain a minimum account balance.
• Link your savings account to a checking account at the same bank.
• Set up automatic monthly transfers from a linked account.

2. Stop Payment Fee

If you need to cancel a scheduled payment from your savings account, you may incur a stop payment fee, typically around $30.

How to Avoid It

Ensure you have sufficient funds in your savings account to cover upcoming transfers. Using a checking account for bill payments can also help you avoid these fees.

3. Returned Item Fee

If a check deposited into your savings account bounces, you may be charged a returned item fee, which can range from $5 to $19.

How to Avoid It

Only accept checks and ACH transfers from trusted sources to minimize the risk of returned items.

4. Wire Transfer Fee

Wire transfers are a convenient way to move large sums of money, but they can be costly, with fees ranging from $0 to $50.

How to Avoid It

Consider using free money transfer platforms like Zelle, Venmo, or PayPal for smaller amounts. For larger sums, a certified check can be a cost-effective alternative.

5. Inactivity Fee

If your savings account remains inactive for an extended period, you may be charged an inactivity fee, usually between $5 and $20.

How to Avoid It

• Set up automatic transfers to your savings account each month.
• Use your savings account to pay a recurring monthly bill.

6. Overdraft Fee

Initiating a transfer without sufficient funds can result in an overdraft fee, typically around $30 per transaction.

How to Avoid It

Maintain a budget to ensure you have enough money in your account. Consider setting up overdraft protection, which can automatically pull funds from a linked account if you’re short on money.

7. Nonsufficient Funds Fee

If a transaction is canceled due to insufficient funds, you may be charged a nonsufficient funds fee, averaging $34.

How to Avoid It

Regularly monitor your account balance and ensure it is adequately funded, especially if you’re using it to cover essential payments like your mortgage.

How to Avoid Savings Account Fees

Every savings account is different, but here are some general tips to help you avoid fees:

• Choose a savings account that doesn’t have certain fees. Online savings accounts, for example, might not charge maintenance fees.
• Maintain a sufficient balance to avoid fees related to stopped payments, returned items, overdrafts, and nonsufficient funds.
• Meet your bank’s monthly requirements, such as maintaining a minimum balance or having a linked checking account.

The Bottom Line

Savings account fees can be a drain on your finances, but understanding how they work can help you avoid them. Maintaining a strong savings account is a key part of financial wellness. At O1ne Mortgage, we are committed to helping you achieve your financial goals. For expert mortgage services, call us at 213-732-3074. Let us help you navigate your financial journey with confidence.

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