Avoid Penalties for Idle Bank Accounts

Maybe you’ve opened a savings or money market deposit account to stash cash you don’t plan to deal with often -- say, money to tap in an emergency. Or perhaps you put a small deposit in a savings account to meet a credit union’s membership requirements. If you leave the money untouched too long without making a transaction, the institution may slap you with an inactivity fee.

For instance, Evantage Bank’s Mega Money Market Account pays 1.1% on up to $35,000 with no minimum balance and no monthly maintenance fee. But if your account is dormant for six months, the bank begins charging $10 per statement cycle. One way to work around the fee is to arrange to deposit as little as $1 a month to the account from a separate account.

Many banks and credit unions charge inactivity fees, says Ken Tumin, of DepositAccounts.com. Contact your bank to ask whether it levies inactivity fees and how you can avoid them. Generating activity may be as simple as calling to inquire about the account, Tumin says. Typically, arranging an automatic monthly deposit or withdrawal will do the job. But be careful that sidestepping one fee does not trigger another. Some banks charge to initiate transfers between their accounts and those of outside institutions.

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Checking accounts are susceptible to inactivity fees, too. Even a service such as Simple, which is designed for banking through a mobile device and generally goes light on fees, charges $5 a month to anyone who lets a linked checking account sit idle for six months. And about one-third of prepaid debit cards charge a monthly inactivity fee if you go 90 days without using the card.