Avoiding common bank charges

While sticking your cash in an account at your nearest bank may seem like a no-brainer, be careful. That move can cost you money if you aren't careful.

Banks are businesses, after all, and one of the primary ways they make money is by charging fees. And most banks have lots and lots of them -- some you probably don't even know about.

These various fees can bleed your savings if you're not attentive to them. Here are three of the most common savings and checking account fees you'll encounter -- and the ways you can beat those fees:

Making the minimum

Minimum balance fees have always been around, but the current banking environment has made them even more common. Worse yet, the required minimums have been rising steadily in recent months -- same goes for the fees you'll pay if you don't meet those requirements.

How to beat these fees. Find out if your account requires a minimum balance and how your bank determines if you've met that requirement. If you can't keep enough cash in the account to cover the minimum, it's time to save somewhere else. Consider saving some place other than a conventional bank too. Many online banks now offer very competitive terms when compared with their brick-and-mortar counterparts.

Overturning the overdrafts

The good news now that the government is keeping a close eye on how banks charge fees when you overdraft your checking account. But don't get too excited. These new regulations won't eliminate overdraft fees, so you still need to watch out for them.

In the past, banks often provided customers with a sort of automatic overdraft protection -- whether they knew it or not. When a customer overdrew, the bank would often cover the cost and then charge the customer a fee, about $27 on average, according to the FDIC. Then, if the customer remained overdrawn, the bank would continue charging fees for each subsequent transaction.

The problem, of course, was that those fees could turn a small financial error into a very costly experience.

How to beat these fees. Today, banks must give you the opportunity to opt-in to automatic overdraft protection. But consider your options before you automatically opt-in to the standard type of protection.

Typically banks will provide you with other choices such as tying two accounts together, with one acting as overdraft protection. Choose this instead, then put $250 in your "overdraft account" and don't touch it. But be forewarned: Even though it's your own money, using this feature will still likely come with a transaction fee.

Using the ATM wisely

As the government tightens its reins on how and when banks charge overdraft fees, banks are getting more creative with various ATM fees to replace those lost funds. Frequently, banks are hiking fees for non-customer use of their ATMs. So the next time you use an out-of-network ATM, you might fork over $5 or more to the owner of that ATM (not to mention the $5 your bank may charge you for the privilege).

Other common ATM fees include transactions fees, balance-inquiry fees, reloading fees (if you carry a prepaid ATM card) and even denial charges, which you might find on your account if you attempt a transaction after reaching your daily cash limit.

How to beat these fees. Carry cash. Most people use ATM cards as cash. But paying for a $2 coffee with plastic isn't necessary -- and it can even be harmful if you're not keeping track of what you're spending. Carrying cash keeps you on budget and never gives the bank a chance to charge you. It can also teach you to plan ahead, so you'll know where free ATMs are if you need them.

Like it or not, bank fees are a part of today's financial world. But if you read the fine print and watch your checkbook, they shouldn't ever pose a threat to your finances.

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