Curse You Bank Fees! How To Never Pay Sneaky Bank Fees Again

What the duck!
What the duck!

First Republic is one of four banks I do business with. They are a boutique bank known for their quality of service. When you go into one of their branches you don't stand in line and wait for a teller to serve you behind a bullet proof window. Instead, you actually sit at a bank officer's desk to deposit a check, open up a CD, or pay your mortgage. It's quite an intimate experience. The fresh baked all you can eat cookies are a nice touch too.

Back in 2009, First Republic ran a 5-year CD special at 4.15%. With extra cash on hand, I locked in a good chunk of change in order to protect my money from further risk. In retrospect, I should have dumped everything in the stock markets. But I've been following my system of allocating 30% of all savings in long duration CDs since 1999 and it's worked out well through the previous downturns so there was no desire to change.

In addition to opening up a couple CDs I also opened up a savings account given their savings account interest rate was also higher than the competition. Over the next year I ended up drawing down my savings account to the point where there was only $33.25 left. I had multiple accounts open with four banks and wanted to simplify my financial life. Carrying around four ATM cards (I hate ATM fees) and keeping track of more than five money market savings accounts was a big pain so I stopped using First Republic for anything other than a CD depository.


I've known about my residual $33.25 savings account for the past couple of years given I get monthly statements. However, I've been ignoring most of the paper statements because who cares about $33.25? I check my CD accounts online once every quarter when interest is paid and that's about it. Boutique banks shine on service but suffer on ubiquity. Hence, I've always put off withdrawing the $33.25 because there isn't a convenient First Republic branch close by.

The beginning of the year is always a good time to make adjustments to our finances so I decided to finally close my First Republic savings account and withdraw my money. When I opened up my January 2013 statement I was shocked to see that there was only $8.25 left! What the duck? Where'd my $33.25 go?

It turns out I was debited a $25 “monthly service fee,” which accounts for 75% of my entire balance. Apparently as of January 2013, First Republic instituted a monthly $25 service fee for savings and money market accounts with balances below $5,000. News to me.

Here's the kicker. I logged into my Personal Capital account which tracks all my accounts real-time and the balance for this particular account showed $0.00. How could I have zero when at least my paper statement showed $8.25? Perhaps something was wrong with the software at the moment.

I finally drove over to the nearest First Republic Bank branch to ask the teller to explain what was going on. The simple answer was that First Republic debited my account another $25 in February, bringing my latest $8.25 January balance to a negative $16.75 as of March 1! I wasn't mad, I was laughing inside. If you open up a $1,000 savings account one day, you would end up with a $0 balance in just 3 years and 4 months thanks to the monthly service fee.

Bank Fees

I politely asked the bank rep to reverse the fees and he obliged as I knew he would. Clearly First Republic is spring cleaning as well and wants to focus on wealthier clientele.


I admit that paying this bank fee was my fault since I threw away most of the statements into the recycling bin. There were heads up notifications in fine print apparently, but I failed to look closely enough. I just assumed no bank would impose such an expensive fee given all the uproar Bank Of America had when it tried to institute a $5 monthly debit card usage fee last year.

Some thoughts and tips to never pay bank fees:

* Banks will sneak in fees where they can. Banks are in business to make money. If you don't have a lot of money, they can't make a lot of money off you. As a result, the only way they can make money is through service fees such as a wire transfer fee, debit card fee, ATM fee, account maintenance fee, dormant account fee, overdraft fee, excess transfer fee, and many more. It's up to you to be aware of the fees and proceed accordingly.

* Ask for a refund as soon as possible. Banks are surprisingly lenient on such fees because they know they are pretty egregious. They don't want to lose you as a customer, no matter how small your account, nor do they want to have negative publicity. Just like how it's relatively easy to get a credit card late fee waived, you should also be able to waive a random fee if you ask early enough. Even if you catch the fee months down the road, you should be able to get your account credited.

* Banks are counting on you to not notice. Let's say a bank has 1 million customers who get a six month warning that a $25 monthly service fee will begin. Chances are high that at least 10% will not even bother to move their money. That's a nice $2,500,000 in incremental fees right there. Let's say half of the 10% dispute the fee. There's still an extra $1,250,000 in incremental revenue a bank gets to pocket. Read your monthly statements and ask for a refund. Retailers also count on you to lose or forget to use your gift cards too, so don't forget to use them!

* Track your accounts online. Because I have around 30 financial accounts, I only focus on the larger accounts and those accounts which have constant transactions such as checking and money markets. Just looking at the “$0.00” on the consolidated account list of my Personal Capital homepage told me something was wrong. As a result, I got my $33.25 back and a couple chocolate chip cookies to boot.


The more money you have, the more money a bank will want to suck away from you. We take it for a granted that our money will always be there so long as we have it deposited in a FDIC insured financial institution. We also think financial institutions will always provide the lowest cost solutions for our banking needs. That's not always the case as I found out after running my 401k through the 401k Fee Analyzer and discovering $1,700+ a year in portfolio fees I had no idea I was paying. There are money leaks everywhere. Time to start plugging the holes and sign up with Personal Capital!

Planning for retirement when paying for private grade school
Personal Capital sample retirement planner calculator. Are you on track? Click to find out.

Updated for 2018 and beyond. Always look out for bank fees, especially if you bank at Wells Fargo where they've been secretly charging millions of their customers for years!

27 thoughts on “Curse You Bank Fees! How To Never Pay Sneaky Bank Fees Again”

  1. As far as tips I would also add create a personal relationship with someone at the bank if its as simple as “hello” every once in a while. It makes it much easier to take advantage of the lenient policies that most banks have.

  2. Here’s what I would think would be an odd one.
    I once had a checking account (which didn’t pay interest) at a big name bank. I only opened it to keep my money separate from money on an investment property. Well, as time went on (and A LOT of work on the house … good for another story one of these days), because the account went below $100 they began charging fees.
    To make a long story short, not only did they charge fees for several months, when I happened to catch it, it was actually -$12 or so. Surprise, surprise!
    Well, I walked into the local branch that I had opened the account and they reversed all of the charges bringing me back to +$30 or so. Once I saw that, I went in and closed the account out, because I didn’t want to get hit with those fees again.

    PS: Sam, you should delete the previous post since I was just trying to bump up the font size. :-)

  3. Mysterious Guy

    Banks have always been hitting accounts with low balance with fees. When I bought my house and reorg my finances, I had a money market that dipped lower than their threshold, so I got hit with a fee. I called them to reserve the fee, and kept the amount slightly higher than what they wanted.

    Strangely enough, I check my credit card to make sure there wasn’t any fraudulent purchases on a regular basis. One time, I saw a 10 cent charge which I couldn’t figure out where it came from. When I called the credit card company, they immediately reversed it and apologized. This was a lot different than a similar situation where I card info was stolen and someone charged a small amount of online merchandise: the credit card issued me a new card and everything.

  4. great info Sam! It’s always better to be very vigilant and trust only yourself when it comes to your finances. I always make it a point to do my own accounting and check out the fine print to avoid this kind of problem, but there will always be a first and it’s good to have this kind of warning.

  5. This is why I switched to a credit union. Citibank wanted to start charging me an $8/month service charge on my “free” checking account. Simple enough to switch to the local credit union with truly free checking, actual interest paid on my savings account, and no ATM fees at almost any other credit union nation-wide.

  6. Or you could just join a credit union and not have to worry about fees, and get 3% interest on your checking account.

  7. Kim@Eyesonthedollar

    I think local banks are more willing to work with you on fees. Bank of America is the worst, in my opinion, and I won’t do business with them because they have refused to waive fees in the past.

  8. I only do business with 2 banks. More than that and it would be a pain to keep track of. I haven’t been charged in a while. I hate it when they sneak those fees in.

  9. A contrarian view, for those willing to entertain it…

    A bank doesn’t make money on accounts with less than $1,000. If somebody has $150 in a checking account, issues monthly statements (the cost is about 75 cents to maintain the hardware, software, produce and mail the statement) it is silly. There are millions of accounts like this, that cost the bank $10/yr to keep an account that returns $1.50 a year.

    The bank has an obligation to make money for the stockholders. It does not have an obligation to babysit people who can’t handle their cash (you have all seen the irate customer who got a $20 NSF fee arguing about it with the manager, somehow refusing to take responsiblity for writing a check when there was no money in the account.)

    And when you “shut down your account” or “take your business elsewhere” the banks are glad about it. You are another unprofitable customer gone. Good riddance.

    Bottom line: handle your cash right, work it through Personal Capital if you can’t do the math, and stop treating financial institutions like they owe you anything.

  10. I’ve had a similar experience Sam. I went to the bank, got my refund, and shut down the account very quickly. Banks are very quick to jump all over the free money and snag fees whenever they can! Most people are incredibly oblivious and won’t ever notice!

  11. Avoiding these sorts of things is certainly one benefit of my obsessive need to track data on a daily basis. I’m in my accounts at least twice a day so it would be hard for a fee to sneak in there without me noticing.

    When I had someone steal my credit card number and start charging once, I had it sniffed out within minutes!

  12. I’d move my money out in a jiffy as well. It is so easy to move money online, banks should really think hard about fees if they want to retain their prized customers where they can cross sell.

    Banks probably impose fees and want some customers to leave as well though. This is the way they can perhaps make money, clean their accounts, and cherry pick who to keep.

  13. I do most of my banking with BBT. I left First Union>Wachovia>Wells Fargo years ago, Even though I kept a balance better than $6000 in checking I was still paying over $30 a month in fees. BBT will occasionally hit me with a fee (very rarely) and when they do, I stop by the branch or call and they sheepishly apologize and reverse it. I can deal with that!

  14. Do you not have all of your accounts integrated through Mint, Sam? In our experience when Mint sees a bank fee in your list of transactions it’s the equivalent of flashing lights and sirens to them. “You were charged a FEE! Here is a list of banks that don’t charge fees!”

    1. All my accounts are set up with Personal Capital, which as I write in the article was what really alerted me to the fact that I must be paying a huge bank fee at First Republic b/c I don’t have accounts open with $0.00 balances. PC is pretty good for investing and budgeting. Try it sometime.

  15. I uncovered some really small fees/interest on my line of credit a couple months ago. I called and found that there was a software change that allowed online banking to automatically default to my line of credit. So when I paid a bill, it charged my line vs. my checking account although I had plenty of money in my account. I not only had the interest reversed, I had them change my bank account to stop the possibility of it happening again.

    I have the bank pay for fees before they are incurred! The bank (branch) gives me a free safe deposit box and pays for my checks (printing). I hate fees and I like more services, particularly for free.

      1. It is interest! It is based on using your line of credit and some of the accounts defaulted to my line of credit. When I talked to them about it, they told me it was a software bug and they would refund the interest. It only amounted to a few dollars.

  16. The First Million is the Hardest

    This happened to me as well, I had an old checking account I was no longer using and neglected to check the statements for. When I finally checked my statement one month I noticed they had begun taking a $5 monthly service fee from my account over the 4 prior months.

    I didn’t dispute or try to get the fees reversed, I simply made a trip down to the bank and closed out my account for the $27 that was remaining in it.

    1. I’d have gotten that $20 in bank fees paid over 4 months back. There’s no way I would have let them take my money like that. But also, I have a sizable amount in CDs at First Republic, so I could not imagine them not removing my $25 bank fee.

  17. Another guy

    Yes, all four items are good advice. Be alert.

    Although I usually keep enough in WF to avoid fees, sometimes my checking slips below the minimum line. When that happens I write a polite email to the bank saying how disappointed I am to be assessed the fee. Wouldn’t you know it, every time the fee has been refunded.

    Of course I am willing to move my business elsewhere if they dont refund the fees.

  18. Oh man. Good thing you checked! Nice job getting those fees taken off. I had to recently call my credit card company to get some charges dropped. Sometimes it takes asking more than once, but I agree it’s usually not too hard to get fees dropped. These credit card companies and banks are just counting on people either not checking or not bothering to call in and ask for the fees to be removed.

    1. If you’re in good standing, they will drop your fee. They don’t want to lose a good customer. I let my renter slide too if it’s only a day or two late.

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