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Is Your Bank Charging You An Inactivity Fee?

Some consumers may have stashed away money for future emergencies. We actually advocate that individuals maintain an emergency fund in a highly liquid account to cover unexpected issues such as medical emergencies, unemployment, theft or casualties. This fund should cover at least six months worth of living expenses. If that’s the case, you’ve likely opened up a money market or savings account and haven’t looked back. Unfortunately, money held in inactive savings and money market accounts can be subject to fees by the bank. Learn how to avoid these inactivity fees.

avoid-bank-inactivity-feesThe inactivity fee
Not all banks are the same in how they may apply an inactivity fee to your account. Some may indicate in the terms of use that if you don’t use an account within a few months and maintain a minimum monthly balance, then they will assess a monthly fee. The fees may vary from a few dollars to as high as $10 to $20 each month. That can certainly add up to a couple hundred dollars a year in bank fees that can be avoided.

How can you avoid inactivity fees
You need to understand exactly how the bank defines inactivity. Is it no transactions at all or does it just relate to purchases? If inactivity is defined as no transactions at all, then the fix is simple. Transfer $1 from one bank account to another every month. To avoid the hassle, most online banking platforms allow you to schedule transfers in advance with frequency. However, be sure you will not be charged a fee for the transfer, which would negate the whole purpose of the exercise. If the bank requires that you make at least one purchase every month, call them to try to waive the fee if you maintain a certain minimum balance. You’d be surprised, but most customer service representatives are given a certain amount of authority when it comes to waiving fees.

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