What Are the Different Types of Bank Accounts and Their Fees?

Bank accounts are more than a place to stash cash—they determine how easily you can access money, how much interest you earn, and what fees you might pay. Below I map the major account types, typical fees to expect, who benefits from each, and specific steps you can take to reduce costs. These notes draw on two decades advising clients and current guidance from regulators.

Quick overview of account types

  • Checking accounts: Built for everyday transactions (deposits, bill pay, debit card use, direct deposit). They prioritize liquidity over interest.
  • Savings accounts: Designed to hold money for short‑ to medium‑term goals while earning interest; federal rules permit easy transfers and withdrawals (subject to account terms).
  • Money market accounts (MMAs): Hybrid accounts that may offer higher interest and check-writing or debit privileges, usually with higher minimum balances and tiered fees.
  • Certificates of deposit (CDs): Time deposits that lock funds for a set term in exchange for a fixed (or sometimes variable) rate. Early withdrawal often triggers penalties.

While account designs vary by bank, the tradeoffs are consistent: access vs return, and convenience vs cost.

Typical fees and when they apply

Most banks and credit unions charge a mix of the following fees. Banks must disclose fee schedules, so look for these line items in account agreements.

  • Monthly maintenance fee: Often waived if you meet a condition (minimum balance, direct deposit, student status). Negotiate or switch if the waiver is hard to meet.
  • ATM fees: Your bank may charge out‑of‑network ATM fees plus the ATM owner’s surcharge. Use in‑network ATMs or fee‑reimbursement accounts.
  • Overdraft and nonsufficient funds (NSF) fees: These can be some of the most expensive single fees for consumers. Opt into overdraft protection or link to a savings account or line of credit to reduce risk.
  • Excess transaction fees: Savings and MMAs sometimes limit debit transfers and charge if limits are exceeded (banks adjusted these rules after 2020; check your account terms).
  • Early withdrawal penalty (CDs): Penalties typically equal several months’ interest; read the penalty schedule before locking funds.
  • Paper statement and stop-payment fees: Small but avoidable by electing electronic statements and managing checks carefully.

Authoritative sources: Consumer Financial Protection Bureau (CFPB) explains many common banking fees and consumer protections (https://www.consumerfinance.gov). The FDIC provides information on deposit insurance (https://www.fdic.gov).

How to choose the right account (practical checklist)

  1. Identify your primary need: daily spending, short-term savings, emergency fund, or time‑locked savings.
  2. Compare effective annual yield (APY) after fees, not just headline rate. A small monthly fee can wipe out a low APY.
  3. Confirm minimum balance and fee-waiver conditions. Prefer accounts with reasonable or easily met waivers.
  4. Look for free or reimbursed ATM networks if you travel often.
  5. For businesses, choose accounts with merchant services and clear transaction pricing.

In my practice I’ve seen clients save $120–$200 a year by switching from a fee-bearing checking account to a no-fee alternative and another $300+ by moving emergency reserves into a higher-yield account while keeping a checking buffer.

Real-world examples (illustrative)

  • Young professional: Paid a $10 monthly maintenance fee and rarely met the $1,500 required minimum. Moving to a no-fee online checking account eliminated the fee and reduced temptation to keep idle cash in a low‑yield account.

  • Saver with emergency fund: Holding three months of expenses in a high‑yield savings or MMA (with easy transfers) produced better returns than a standard savings account while keeping liquidity intact.

  • Family planning CDs: Laddering CDs (staggered maturities) helped lock higher short‑term rates without losing full liquidity—maturing rungs became available for opportunities or emergencies.

Fees by account type (general guidance)

Account Type Common fee drivers Typical access When to use
Checking Monthly maintenance, ATM, overdraft Immediate (debit, checks) Everyday spending, payroll, bill pay
Savings Monthly fee if below min, excess transfer fee Limited transfers/withdrawals Short‑term goals, emergency fund
Money market Maintenance, tiered fee, ATM costs Check-writing and limited checks Higher balance savers who need limited access
CDs Early withdrawal penalty Locked until maturity When you won’t need the money for the term

Note: Fee levels and APYs vary widely between institutions and over time. Always read the fee schedule and disclosures provided when opening an account.

Who is affected / eligibility considerations

  • Students and seniors: Many banks offer student or senior accounts with reduced or waived fees.
  • Low‑balance customers: Look for community banks or credit unions that focus on low‑fee accounts.
  • Small businesses: Business accounts typically have different pricing structures and may include transaction limits and merchant service fees.

Most banks require basic ID, Social Security number (or ITIN), and a minimum opening deposit. Credit unions require membership criteria.

Mistakes I commonly see (and how to avoid them)

  1. Ignoring the total cost: People focus on APY without accounting for maintenance fees and ATM charges. Calculate net yield after fees.
  2. Storing emergency cash in illiquid CDs: Locking an emergency fund in long‑term CDs can force costly early withdrawals.
  3. Overdraft vulnerability: Not linking a backup account or declining overdraft services can lead to high NSF fees or declined transactions.
  4. Failing to ask for waivers: Many fees are negotiable—ask for fee waivers, especially if you have a relationship or bring direct deposit.

Practical strategies to reduce fees and improve returns

  • Bundle services: Some banks waive fees if you have multiple products (checking plus savings or mortgage).
  • Use online banks or credit unions for higher yields and lower fees; they often have larger ATM networks through partnerships.
  • Set up low‑balance alerts and automatic transfers to avoid maintenance fees and overdrawn accounts.
  • Consider a savings sweep or linked account for overdraft protection to reduce NSF fees.

For more on choosing checking and savings accounts and avoiding fees, see our guide “Banking 101: Checking, Savings, and Avoiding Fees” on FinHelp (internal link: “Banking 101: Checking, Savings, and Avoiding Fees”: https://finhelp.io/glossary/banking-101-checking-savings-and-avoiding-fees/). For coverage of deposit protection, see “Understanding FDIC and SIPC Protections for Your Accounts” (internal link: “Understanding FDIC and SIPC Protections for Your Accounts”: https://finhelp.io/glossary/understanding-fdic-and-sipc-protections-for-your-accounts/). If you want a side-by-side look at account options, also read “Banking Essentials: Choosing Checking and Savings Accounts” (https://finhelp.io/glossary/banking-essentials-choosing-checking-and-savings-accounts/).

Frequently asked questions (brief)

  • Is my money safe in a bank? If your bank is FDIC‑insured, deposits are protected up to at least $250,000 per depositor, per ownership category (FDIC) (https://www.fdic.gov).

  • Can fees be waived? Yes. Common waivers include direct deposit minimums, average daily balance thresholds, or linking multiple accounts.

  • Should I keep cash in a savings account or a CD? Use savings for emergency liquidity and short‑term goals; use CDs when you won’t need funds during the term and rates are attractive.

Professional disclaimer

This article is educational and reflects general information as of 2025. It is not personalized financial advice. For decisions that affect your taxes, business finances, or long‑term financial plan, consult a licensed financial advisor or tax professional.

Sources and further reading

Practical next steps: review your current account fee schedule, compare net APYs (after fees), and ask your bank for any fee waivers you believe you qualify for. Small changes—moving to a fee‑free checking account, linking a backup account for overdraft protection, or laddering CDs—can add up to meaningful savings over a year.