If you have a bank account, (which the majority of UK adults do), it’s important to be aware of any fees that your bank can charge you.
Types of Banking Fees
Bank fees are charges that can be imposed on you for your account set-up, maintenance, and transaction services.
Common charges you may face are:
- Overdraft fees – when you make a transaction but don’t have enough money in your account so your bank lends you money to cover the purchase
- Insufficient funds fee – when you try to make a transaction but there is not enough money in your account, so the payment cannot be made. You face being charge this if you go over your arranged overdraft or use an unarranged overdraft. A transaction could include such a cheque you have written, a payment you have made, or a direct debit that you have set up
- ATM fees – your bank may charge a fee if you use an ATM that is not part of their network, such as one in another country or from a different bank
- Foreign transaction fees – to avoid this, you can look for a debit or credit card that doesn’t charge these fees before you go abroad
- Maintenance fees – a monthly charge for having a certain account with a financial institution. Your bank may agree to waive these fees if you meet certain requirements, such as depositing a certain amount of money each month or keeping a minimum daily balance in your account
- Same day bank transfer fees – a charge for transferring large sums from one account to another if you wish the recipient to receive the funds the same day
- Inactivity fees – a charge for accounts that don’t have any activity for a certain period of time
- Account closure fees – some banks charge you if you close a bank account with them, to cover their own administrative costs. These fees aren’t charged by all banks, and some will only charge them in particular circumstances, such as if you close an account with a large balance
- Stop payment fees – you may face this charge when you request to stop a cheque payment from going through. You can request that a payment to be stopped if it is still outstanding or has not been fully processed yet
Being Aware of Your Fees
Whatever fees a financial institution charges, they must be transparent about it. You should check your bank’s terms and conditions, your online banking or mobile banking app, and your bank statements, to see what fees your bank can charge you. MoneyHelper has a free online tool you can use to compare bank accounts and their different fees and charges.
For more information about bank accounts in general, reading your bank account, FSCS regulation, and overdrafts check out our FREE online mini-course!