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Ask the expert: Fees on savings accounts and money market accounts

October 25, 2010

By Richard Barrington | MoneyRates.com Senior Financial Analyst, CFA

Q: I'm reading a lot about banks doing away with free checking, and charging a monthly fee for those accounts now. I also know there are a bunch of other potential fees on checking accounts: overdraft fees, ATM fees, and even fees for things like paper statements and visiting a teller. My question is this: are checking accounts the only type of bank accounts where I have to worry about fees, or are their fees on things like savings and money market accounts too?

A: When it comes to bank fees, the best advice is look before you leap -- that is, find out about all potential fees before you open an account. As for where to look for those fees, checking accounts are the most likely place you'll find them, but don't assume that savings accounts and money market accounts are free of fees. Charges on those types of accounts may be a little more obscure, but they can exist.

For example, savings and money market accounts may be subject to an inactivity fee. This is a monthly fee that is assessed once you've gone a long time (such as three years) without any activity in the account. The irony is this: a withdrawal would count as activity, so basically the bank is indicating that they would rather have you take your money away from them than leave it alone. In any event, be aware of any inactivity fees that may apply to your accounts, and if you haven't made any withdrawals or deposits in the normal course of things, consider putting in or taking out a token amount just to steer clear of inactivity fees.

Also, be aware that if you sign up for a savings account or money market account that offers a special interest rate if you keep a certain minimum balance, a fee may apply if you drop below that balance.

Got a financial question about saving, investing, or banking? MoneyRates.com invites you to submit your questions to our "Ask the Expert" feature. Just go to our home page and look for the "Ask the Expert" box on the bottom left.

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