Common Fees Associated with a Savings Account

Even though the purpose of a savings account is to save money, there are a few fees that you may be charged.

Banks may charge a monthly fee. Sometimes financial institutions will waive this monthly charge if the account holder arranges for direct deposit or a scheduled transfer of funds from a checking account. Maintaining a given account balance may also waive this monthly fee.

Some fees are related to your savings account balance. For example, an account that requires $100 minimum balance might charge a small fee, usually around $5, if your balance falls below that amount. Other accounts that require higher balances, such as $1000, may also charge a penalty if your balance falls below the specified amount.

Withdrawals from such an account can also trigger fees. There is often a flat fee associated with any withdrawals. In addition, if an account holder takes money out of their account, the compounded interest is affected. Interest accumulated on savings will only increase as the money is left in the account over an extended period of time. Even if the withdrawn money is redeposited, the rate of interest will be lower than it would be if the money was left alone. Early withdrawal from a long-term account, such as a Certificate of Deposit, will result in a loss of all accumulated interest.

 

blog comments powered by Disqus