Overdraft and NSF Fees Rose to an Estimated $12.4 Billion in 2025. Here's How Retirees Avoid Them

Last year, Congress struck down a rule that would have capped overdraft fees at $5. That means these seemingly small bank fees could be draining your bank account. These costs can be tough on a budget, especially for retirees who are living off a fixed income.

People paid an estimated $12.4 billion in overdraft and non-sufficient funds (NSF) fees in 2025, up from $12.1 billion in 2024, according to an analysis from the National Consumer Law Center. To avoid handing your money over the bank via these fees and similar ones, it's important to conduct audits of your bank accounts regularly. You should also create a plan to avoid bank fees, and call the bank if you have any questions. Here are three common bank fees retirees encounter that are easy to avoid with some simple planning.

1. Monthly maintenance fees on checking and savings accounts

Many bank accounts have monthly maintenance fees that you can waive if you make a certain amount of monthly deposits or have a sufficient balance. However, retirees don’t have regular paychecks to fulfill direct deposit requirements, and spending money on various living costs can put them below the minimum balance requirements.

Social Security and pension deposits might count as direct deposits, but you should reach out to your bank to confirm. You can also switch from an older account to a no-fee account that has fewer features but protects you from monthly maintenance fees.

2. Overdraft and non-sufficient funds fees

A single overdraft fee can come to more than $30, depending on your bank. These fees show up if you overdraw your bank account. Non-sufficient funds fees are similar.

Automatic bills, medical copays, subscriptions and delayed deposits can lead to timing issues that trigger overdraft and non-sufficient funds fees. Even a careful budgeter can incur this fee when income arrives on a fixed schedule but expenses are often scattered throughout the month.

Some banks have reduced or eliminated overdraft and non-sufficient funds fees. It's often worth switching to a bank that has done away with these fees to save money in retirement.

3. ATM and paper statement fees

Often, out-of-network ATM withdrawals will result in extra fees, and you may also have to contend with a monthly fee if you want paper statements. These convenience fees add up over a year, and they are easy to avoid.

E-statements are generally free, and switching over is easy. You can download and print e-statements to ensure physical copies without the monthly fee. ATM fees are also easy to avoid if you only use your bank’s ATM locator. Some accounts have out-of-network ATM fee reimbursements as well. Check with your bank to see if it reimburses some out-of-network fees and if it has a vast ATM network. Some banks have more than 60,000 ATMs in their networks, making it much easier to avoid out-of-network fees in the first place.