Fact or Fiction: Hidden Bank Fees

Even if you have an overdraft protection account, the bank might still charge you a fee for transferring the funds from that account to cover the difference in your checking account.

In 2010, Congress and the Federal Reserve enacted new regulations that included banning inactivity fees.

The Truth in Savings Act, enacted in 1991, requires each federally-insured banks disclose the rules and fees you're agreeing to you when you open an account.

Aside from requiring banks to disclose their rules and fees when customers open new accounts, the Truth in Savings Act requires that banks inform them of any changes at least 30 days in advance.

Credit unions do require certain fees or rules for membership, but they are typically less than all of the fees you might pay for an account at other banks. Plus, the membership requirement may be a small one-time deposit you maintain in a savings account rather than a fee you pay each year.

ATM services are an expense for banks, as is linking the networks that connect different banks around the world. ATM fees are one way a bank can recover those operational costs.

The bank will probably keep your account records for a few years after you close the account. This makes it easier for the bank to comply with audits and IRS summons.

The rate used for the conversion is more likely to be the exchange rate at the time the transaction is processed, regardless of when the purchase was made.

Banks must convert purchases made with another currency to U.S. dollars. The bank may charge you a fee for converting each transaction, typically some percentage of the amount of the transaction.

Account closing fees help banks cover the costs of handling any outstanding transactions and for keeping your account records.

A returned deposit fee is the price you might have to pay if you accept a check and it bounces. If you don't want to take that chance with a person who's paying you, consider asking for cash or a money order instead.

The bank can set its own rules on what order it processes a day's transactions. For example, it might process payments in order from the largest to the smallest and then credit deposits, or it might credit deposits first and then process payments in the order they came in to the bank. Check with your bank to learn its procedure for processing transactions.

While some banks did this automatically in the past, regulations enacted in 2010 now require banks ask whether customers want to use these overdraft protection services because the banks charge a fee each time they cover an overdraft transaction.

The bank can charge a fee for using the overdraft protection service each time it transfers money from your savings account to cover transactions in your checking account.

Banks have been raising and creating fees to make up for lost revenue from tougher regulations. Fortunately, they're also creating new types of accounts with lower fees for those who go paperless or only bank online and at ATMs.

Many banks offer certain types of accounts that waive monthly fees provided there's a regularly scheduled direct deposit to the account. The direct deposit is electronically transferred from the payer to your bank, saving time and effort for both you and your bank.

The bank can still charge for this service, but they probably won't. However, if you have a limited number of free transactions each month in your account agreement, find out from your bank whether account-to-account transfers will count against that limit.

Banks are businesses, and they can only grow and prosper if they have customers. If you are shopping around for bank services, do your homework to find out what accounts and services you want. Then, don't hesitate to ask a bank to negotiate on certain rules or fees to earn your business. The worst that can happen is they say "no."

Though the 2010 regulations prevent the bank from charging some fees, the banks are anxious about lost revenue and looking for ways to raise or create other fees. This affects both deposit accounts, like checking and credit card accounts. Be aware of increases in monthly and annual fees and other account services, and look for different types of accounts that may help you counter those increases.

If you have a home-based business, you can deduct the cost of doing business. If you have a separate bank account for that business, the bank fees you have to pay for that account are part of your business costs. You can deduct some of those fees alongside other business expenses when you complete your income tax forms each year. Certain bank fees you pay for your personal accounts might also be deductible.