The 10 hidden business banking fees businesses should know about
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The 10 hidden business banking fees businesses should know about
Hidden banking fees, often referred to as "junk fees," silently drain thousands of dollars from businesses each year, with many owners discovering these charges only after they've already impacted their bottom line. Major financial institutions like JPMorgan Chase, Wells Fargo, and Bank of America make billions every year charging consumers and businesses fees.
Whether it's a $30 overdraft fee, a 3% foreign transaction charge, or a $25 wire transfer cost, these fees add up quickly for growing companies, and understanding these banking fees is essential for effective business financial management. Traditional banks often layer multiple charges into their service agreements, while digital banking platforms and neobanks introduce their own unique fee structures. This makes it difficult for business owners to minimize their banking costs while maintaining efficient operations.
Brex examines 10 banking fees that every business owner should understand before choosing a banking partner. This article will break down each fee's structure, typical ranges, and potential impact to help you make informed decisions about your banking relationships. More importantly, you'll learn how to reduce or eliminate these charges, helping you keep more of your hard-earned revenue where it belongs—in your business.
1. Monthly Maintenance Fees
One of the most commonly overlooked expenses in business banking is the monthly maintenance fee, which quietly affects your business's bottom line. These fees are typically charged for basic account upkeep and are closely tied to your account's minimum balance requirements or transaction volumes. For most banks, these fees range from $10 to $50 per month, though some institutions implement a tiered structure that adjusts based on your account activity. Consider, for instance, a small business that must maintain a minimum balance of $500—falling below this threshold could cause an automatic $25 monthly charge, significantly impacting their available working capital.
How to avoid monthly maintenance fees
The good news for business owners is that these fees are often negotiable, particularly if you've established yourself as a valuable client through high transaction volumes or substantial deposits. To avoid these charges altogether, try maintaining the required minimum balance, meeting specified transaction thresholds, or even negotiating a fee waiver with their bank. Taking time each month to reconcile a bank statement can help track these minimums and fees effectively. Some financial institutions go a step further, offering free business checking accounts if certain criteria are met, making it worth exploring different banking options to find the most cost-effective solution for your business needs.
2. Transaction Fees
Another hidden cost that can surprise founders and owners is the array of transaction fees for routine banking operations. These fees are triggered by various everyday business activities, including writing checks, making deposits (particularly cash deposits), and conducting electronic transfers. While each individual fee might seem minimal, they quickly add up—banks typically charge between $0.25 and $1 for each check written, $0.50 to $5 for deposits, and varying amounts for electronic transfers. These charges often operate on a threshold system, where businesses are allocated a certain number of free transactions before fees kick in.
For example, consider a small business that writes numerous checks throughout the month. If their JP Morgan Chase account allows 20 free checks per month, they could be charged $0.50 for every check beyond that limit—a cost that can accumulate rapidly for businesses that rely heavily on check payments. What makes these fees particularly challenging is their cumulative nature. A business writing 100 checks every month could face an additional $40 in fees.
How to avoid transaction fees
Most banks are willing to negotiate fees, particularly for businesses maintaining high transaction volumes. By leveraging online banking for electronic transfers, consolidating multiple small transactions into larger ones, and negotiating volume-based fee waivers, businesses can reduce their monthly banking expenses. Many companies find that simply reviewing and adjusting their transaction patterns leads to substantial savings, making it worthwhile to analyze and optimize their banking behaviors.
3. Overdraft Fees
Among the most costly damaging business banking fees are overdraft charges, which occur when a company spends more than its available account balance. These fees typically range from $25 to $35 per occurrence, but their impact can accelerate as some banks pile on additional daily fees until the account returns to a positive balance. Consider a common scenario: a business with only $50 in its account makes a $100 purchase, triggering a $30 overdraft fee. This means the $100 purchase effectively costs $130—a 30% premium on the original transaction amount. What makes these fees particularly painful is that they often hit businesses when cash flow is already tight.
How to avoid overdraft fees
Unlike other banking fees, overdraft charges are generally less negotiable, but businesses aren't completely without options for protection. The good news is that a recent White House rule set to take effect in October 2025 may limit the overdraft fees banks can charge. In the meantime, smart business owners can implement multiple safeguards to avoid these costly fees, including setting up low-balance alerts through their banking apps, carefully monitoring account balances throughout the day, and maintaining detailed cash flow forecasts. Many banks also offer overdraft protection services—though these often come with their own fees, they're typically much lower than standard overdraft charges. Another effective strategy is linking a business savings account to the checking account as a backup funding source, essentially creating a safety net for unexpected expenses or timing mismatches in cash flow.
4. Wire Transfer Fees
Wire transfer fees represent a significant expense for businesses engaged in domestic and international transactions, often catching owners off guard with their substantial costs. While domestic wire transfers typically range from $15 to $30 per transaction, international wires can command fees of $25 to $50 or more, depending on the destination and intermediary banks involved. Consider a common business scenario: sending $5,000 to a supplier in another state incurs a $20 wire transfer fee—while this might seem minimal compared to the transfer amount, these fees can quickly accumulate for businesses that rely on wire transfers for time-sensitive payments.
How to avoid wire transfer fees
Strategic planning can reduce the impact of wire transfer fees on a business's bottom line. For frequent wire transfer users, many banks are willing to negotiate reduced rates, particularly for businesses that maintain high transfer volumes. You might also explore alternative payment methods, such as ACH transfers, which typically cost less but take longer to process. By planning transactions in advance to avoid urgent wire transfers, consolidating multiple payments when possible, and establishing relationships with banks that offer competitive wire transfer rates, businesses can reduce their transfer-related expenses while maintaining efficient payments.
5. Foreign Transaction Fees
As businesses increasingly operate in a global marketplace, foreign transaction fees have become a significant consideration for companies conducting international business. These fees, typically ranging from 1% to 3% of the transaction amount, are triggered whenever a transaction is made in a foreign currency, whether through card purchases or ATM withdrawals. While each individual fee might seem small, they can add up quickly—consider a business making a €100 purchase abroad, which incurs a 2% foreign transaction fee of €2. When multiplied across numerous transactions during cross-border operations, these fees can significantly impact a company's bottom line.
How to avoid foreign transaction fees
Unlike some other banking fees, foreign transaction fees offer limited room for negotiation, but businesses can have options to minimize their impact. Many credit card companies that offer the best business credit cards tend to design for international use, typically featuring zero foreign transaction fees as a key benefit. For businesses with frequent international operations, it's worth researching and obtaining these specialized business credit cards for employees. Additional strategies include exchanging currency before traveling to avoid multiple small transactions, using local ATMs for larger withdrawals (while being mindful of ATM fees), and consolidating purchases to minimize the number of transactions. With careful planning and the right financial tools, businesses can mitigate the burden of these international fees while maintaining efficient global operations.
6. Inactivity Fees
Digital banking platforms often charge inactivity fees to encourage regular account engagement, marking a distinct difference from traditional bank fee structures. While brick-and-mortar banks typically focus on maintenance and transaction fees, digital platforms may charge varying rates when accounts remain unused, ranging from modest flat fees to recurring monthly charges. These fees kick in when an account shows no activity for a specified period. For example, after 12 months without any login or transaction activity, an account might incur a quarterly $10 inactivity fee, slowly depleting dormant accounts.
How to avoid inactivity fees
Proper account management strategies can prevent inactivity fees with minimal effort. Business owners can avoid these charges by setting calendar reminders for regular account logins, using expense management automation for routine transactions, or scheduling periodic account reviews. For businesses maintaining multiple digital banking accounts, you'll want to decide whether to maintain active status across all accounts or consolidate unused accounts. Regular account monitoring not only helps avoid inactivity fees but also contributes to better overall financial management and security by ensuring all accounts receive consistent attention and oversight.
7. ACH Transfer Fees
ACH transfer fees highlight a key advantage of digital banking platforms, where standard transfers often come at minimal or no cost compared to traditional banks. While standard ACH transfers are typically free on digital platforms, expedited or same-day transfers can trigger fees ranging from $5 to $25, depending on the urgency and transfer amount. This cost difference becomes particularly apparent in situations where immediate payment is required—for instance, when a business needs to pay a vendor immediately and opts for an instant ACH transfer, incurring a $15 fee that could have been avoided with standard processing times.
How to avoid ACH transfer fees
Savvy founders and business owners can minimize these fees through strategic payment planning and careful cash flow management. By building routine payment schedules that account for standard ACH processing times, businesses can avoid the premium costs associated with expedited transfers. Setting up recurring payments, maintaining a clear payment calendar, and communicating payment timelines with vendors allows companies to utilize free standard ACH transfers whenever possible. This approach not only saves money but also creates more predictable payment processes, helping to improve business cash flow while avoiding unnecessary transfer fees.
8. Card Reader/Payment Gateway Fees
Processing card payments comes with a hidden cost that many business owners underestimate when setting up their digital banking and payment systems. Most platforms charge a combination of percentage-based and fixed fees for each transaction processed through card readers or payment gateways, typically ranging from 1.5% to 3.5% plus a small fixed fee per transaction. These costs add up quickly in day-to-day operations—when a business processes a simple $100 payment through their mobile card reader, they might see a $2.50 charge from that single transaction at a 2.5% rate. Multiply this across dozens or hundreds of daily transactions, and these fees can take a significant bite out of profit margins.
How to avoid card processing fees
Businesses have several ways to keep these card processing costs in check while maintaining convenient payment options for their customers. Many payment processors are open to negotiating better rates, especially for businesses that process a high volume of transactions or larger payment amounts. Some businesses offer small discounts to customers who pay by cash or check, effectively sharing the savings on processing fees. Others take time to research different payment gateways and processors, finding that fees can vary considerably between providers. By combining these approaches—negotiating rates, offering strategic discounts, and choosing cost-effective processors—businesses can reduce their payment processing expenses while keeping their customers happy with flexible payment options.
9. Instant Transfer Fees
Digital banking platforms offer instant transfers as a convenient solution for businesses needing immediate money movement, but it comes at a cost. Unlike traditional banks that primarily use wire transfers for quick transactions, digital platforms have developed their own instant transfer services with specific fee structures. These fees vary by platform and transfer amount, adding an extra expense layer to urgent transactions. For example, when a business needs to pay a freelancer immediately and uses an instant transfer feature, they might incur a $10 fee simply for the convenience of same-day processing.
How to avoid instant transfer fees
While instant transfers can be unavoidable in certain situations, careful planning can help minimize these extra costs. Most digital platforms offer standard transfer options that come with minimal or no fees, though they may take a few business days to process. Smart business owners can significantly reduce transfer expenses by implementing better payment scheduling systems, setting up automated regular transfers for predictable expenses, and maintaining clear communication with vendors and service providers about payment timelines. This proactive approach not only saves money but also creates more predictable cash flow patterns, reducing the need for costly last-minute transfers.
10. Bill Pay Fees
Digital banking platforms typically offer standard bill pay services at no cost, but businesses often encounter unexpected fees when using premium or expedited features. These charges can appear when requesting rush payments, having physical checks mailed to vendors, or making payments to certain types of recipients. While the fee structure varies widely depending on the service used, businesses commonly face higher charges for expedited processing or when physical payment methods are required instead of electronic transfers.
How to avoid bill pay fees
Minimizing these bill pay fees starts with developing efficient payment processes. By planning payment schedules in advance, businesses can rely on standard electronic payment methods that typically come at no cost. Setting up recurring payments for regular expenses, maintaining a clear payment calendar, and prioritizing electronic payment methods whenever possible can help avoid last-minute rush fees. This systematic approach to bill payment enhances operational efficiency while helping businesses maintain better control over their cash flow and payment processes.
Don't Let Banking Fees Eat Up Your Revenue
Smart management of banking fees can dramatically improve a business's financial health and operational efficiency. Understanding the benefits of a business bank account is essential for any growing company looking to optimize its financial operations. These accounts provide dedicated business features and protections that personal accounts simply cannot match. By staying informed about fee structures and implementing smart cash management solutions, businesses can save thousands of dollars annually.
The most successful business owners integrate banking fee oversight into their overall spend management strategy and quarterly financial reviews. Take time to audit your statements through comprehensive expense reporting, challenge unnecessary charges, and renegotiate your fee structure as your business grows. Remember that banks value long-term relationships with thriving businesses, giving you leverage to request better terms. Many entrepreneurs find that simply asking about fee reduction options can yield surprising results, as banks would rather adjust their fee structure than lose a valuable client.
Finally, consider exploring modern banking alternatives that align with your specific business model. From industry-specific credit unions to digital-first neobanks offering dedicated cash management accounts, you now have more options than ever before. The ideal banking partner doesn't just store your money—it enhances your financial operations while minimizing unnecessary costs. By treating banking relationships as strategic partnerships rather than mere service providers, you'll position your business to retain more of its hard-earned revenue and fuel sustainable growth for years to come.
This story was produced by Brex and reviewed and distributed by Stacker.