Are you paying too much in ATM, bank fees? Probably, study finds

ATM fees and overdraft fees are at all time highs, according to a new study, and the trend may just be getting started. How can bank customers reduce their costs?

Marcelo Del Pozo/Reuters/File
A customer with a dog uses a La Caixa automatic teller machine (ATM) in the Andalusian capital of Seville, southern Spain August 28, 2015.

With bank fees across the spectrum at all time highs, customers may soon need their savings account to afford their checking.

Ok, not quite. But a new study by, a personal finance website, shows that 63 percent of non-interest checking accounts have monthly or periodic fees. The number of completely free checking accounts (37 percent) is at an all-time low since Bankrate started their annual checking survey in 1998. Other banking fees are also increasing at an accelerated rate.

The average fee for using out-of-network ATMs stands out as one of the most egregious. Fees for out-of-network ATMs have risen four percent over the last year to $4.52 per transaction, according to the survey. That includes both the average fee charged by the ATM provider ($2.88) and the average fee charged by the financial institution ($1.62).

The four percent increase for ATM transactions is a continuation of a long-term trend. Over the past five years, out-of-network ATM fees have risen over 21 percent.

Overdraft fees have also seen an uptick, increasing nine percent since 2010. Currently at $33.07 on average, those fees are at record highs.

Why the increases? For banks, it's an easy way to make money. "ATM transactions, maintenance fees, and overdraft fees] are low hanging fruit for banks increasing fee revenue," chief financial analyst Greg McBride says in a phone interview. 

The actual fees bank customers will pay depend on the city. Atlanta ($5.15) and New York ($5.03) have the highest average ATM fees in the country, while Milwaukee ($34.79) and Atlanta ($34.57) have the highest average overdraft fees.

San Francisco and Cincinnati have both the lowest average ATM fees and the lowest average overdraft fees on the list. San Francisco has an average ATM fee of $3.85 and overdraft fee of $30.35. Cincinnati comes in just above with ATM fees of $3.86 and overdraft fees of $30.44.

But you don't have to relocate to access more affordable ATM, checking account, and overdraft fees; there are few simple tricks to help you get them lower. Opting out of “overdraft protection” means a payment that is too big for the current balance on a debit card will result in a declined card, not a $33.00 charge. There are also ways to waive maintenance fees on checking accounts by using direct deposit or maintaining a specific balance.

Mr. McBride advises a proactive approach. “The most important thing for consumers to know is that all of these fees are completely avoidable. Shop around for a bank or credit union that fits your lifestyle so that you can keep more of your hard-earned cash, “ Mr. McBride stated in the e-mailed press release.

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