Bank Fees on the Rise

Don't expect budget relief from falling gas prices; your bank is standing in line to pick up the slack.

A tropical storm is playing out in the banking industry, sending out a series of ocean swells to crash on your finances. Those swells are taking shape as increased account fees that could cost you hundreds of dollars every year.

The FDIC is doubling the insurance premium it charges to U.S. banks and thrifts. The banks will likely pass that extra expense on to you. In fact, a recent study indicates that bank fees are already heading higher.

Nickel and diming you

According to the Bankrate 2008 Checking Study, fees for bounced checks, maintenance, and ATMs are rising. The average charge you'll pay for bouncing a check is $28.95, 2.5 percent higher than last year. And that's just for the first check. If several are presented on the same day, your bank is likely to process the biggest one first. That saps your deposited money, and allows the bank to charge you the bounced check fee on every check that follows-until you put more money in the account.

ATM fees have risen so high, that you may need to change your habits or create a new line item in your budget. The average surcharge is $1.97, more than 10 percent higher than it was last year, and more than double what it was 10 years ago. On top of that, you may get stung with an additional fee for using another company's ATM; this fee averages $1.46. Those figures don't count the extra fees you'll have to pay for printing a statement from the ATM.

You also need to keep an eye on your monthly maintenance expenses. Generally, checking accounts, both interest and non-interest bearing, charge a maintenance fee when your balance falls below the stated minimum. Surprisingly, the average required minimum for non-interest-bearing accounts went down this year, from $155.49 to $109.26. The opposite is true, however, for their interest-bearing counterparts. The minimum threshold here rose to $3,461.84 from $3,316.60 last year. And the average monthly cost associated with falling below that level has also increased, to $11.97 from $11.72.

Keeping the "free" in free checking

Because you didn't open that free checking account to pay bank charges, here are some tips to help you outsmart the bank:

• Have a system that keeps you from bouncing checks. You might deposit $500 extra in your account as a cushion, or start tracking your checks and debit purchases more meticulously.

• Know your required minimum balance and how it's calculated.

• Locate the fee-free ATMs near home and work.

• Keep an emergency cash fund, or remember to get cash back when you buy your groceries.

Alternatively, you could ignore your account balance and stop at the nearest ATM whenever you need cash. But then you'll have to worry about those bank charges rising up like a tsunami, and washing away all of your discretionary cash.