5 Ways to Avoid Paying Banks Fees
, by Rob Kaufman
Banks definitely provide services that help us and make life easier. Yet, we typically end up paying for these services one way or the other - typically in fees. For instance, do you need to take money from an ATM that's not your bank's ATM? There's a fee. Want to send money to the account of a relative? Fee. Did you forget to put money into your checking account to cover a large purchase and have to use overdraft protection? Fee.
Before offering you different ways to help avoid these fees, let's talk about the most common ones and what they entail.
The Most Common Bank Fees
Overdraft Protection Fees.
Most of us have done it: we deposit money into our account assuming that it's available immediately and then write a check thinking it's covered. The problem is that checks from outside the state or country can take five to seven days to clear. That means the check you just wrote will bounce could bounce (insufficient fund fee).
Many of us obtain overdraft protection that allows the bank to advance us the amount and allows the check to be cashed. That's good for us since it won't seem we have written a rubber check. However, we get charged by the bank for this (overdraft protection fee) that can run between $20 and $35 for the overdraft.
Monthly Account/Minimum Balance Fees.
If you've done your homework, you have a bank that doesn't charge you just for having them hold your money. However, some banks do charge this monthly fee and it can range anywhere from $3 to $5 a month. Many banks offer to waive the monthly fee if you keep a minimum balance in the account. That's great! Unless of course you fall below that amount and have to end up paying a fee for not meeting their requirement.
The worst part is, if you need to keep $1,000 or $1,500 in the account (money you can't touch or you'll fall below the minimum), you're basically giving the bank an interest-free loan. That's not fair... nor is it smart money management.
Debit Card Transaction Fees.
If you'd rather not carry your checkbook or pay cash, you could always use your debit card and have the money automatically debited from your checking account. Then again, banks usually charge a fee for that transaction - fees that can add up if you use that card for multiple transactions.
ATMs are one of the greatest inventions since sliced bread. They're so convenient - especially when you're short of cash and need money quickly. The problem is, if you can't find an ATM with your bank's name on it, you're most likely going to pay a fee. Not only from the bank whose ATM you're using, but from your own bank as well. These fees can be anywhere from $2 to $4 and we're talking from both banks!
Wire Transfer Fees.
Okay, you owe someone money and they live halfway across the country. You need to pay them by tomorrow, so you decide to wire the money. If the wire is from a domestic bank, the fee can be $10 or more. If it's from an international financial institution, it could run anywhere from $15 to $25.
From ordering new checks and depositing large amounts of cash to annual account maintenance fees, banks will find a way to charge you for using their services. That's why it's so important to do your research when deciding which bank is best for you.
5 Ways to Avoid Paying Bank Fees
Use free checking and savings from those banks that still offer them. Many banks understand they're not the only financial institution in town and will provide free checking and savings. Take advantage of that if you can.
Maintain a minimum balance required by your bank, if there is one. By keeping the minimum amount in your account, you won't pay a fee when you drop below that amount.
Have multiple accounts at one bank. Many financial institutions offer free services if you maintain, for instance, both a checking and savings account with them.
Use only your bank's ATM so that you won't have to pay those "non-affiliated" fees. Yes, sometimes it's impossible to do that, but if you have the time to find an ATM affiliated with your bank, go those extra miles... it'll save you money down the line.
Sign up for email or text alerts that notify you if your balance falls below a specific level. This will help stop you from spending more than you have or dropping below a required minimum balance.