Chapter 1: Where To Open Bank Accounts
Chapter 2: Which Type of Bank Account Should You Open
Chapter 3: Bank Account Interest Rates
Chapter 4: Bank Account Charges and Fees
Chapter 5: Online Banking
Chapter 6: Bank Account Facts
Account Charges and Fees
Paying a minimal fee for maintenance of your account is all right as long as you are getting some value added services. If you are not getting the services you want, you should look for another account or a bank.
But before you open an account with the bank, check if their fees and charges are competitive compared to other banks. A bank can charge you more than a maintenance fee. Some of the common bank charges are:
- Charges for ATM or Debit Card – Most of the banks charge an annual fee for the ATM and debit cards issued by them. Apart from that, they can also impose a ‘surcharge’ for using the ATMs of other banks or for using your card at a foreign location for withdrawal. Instead of limiting the usage of your card to avoid the charges, it is always better to choose a bank that does not levy such charges.
- Penalty for Low Account Balance – A lot of checking accounts require you to maintain a minimum account balance, failing which you will have to pay a penalty. If you cannot maintain a high account balance, choose an account that has no such requirement. Opening a new account that meets your requirements is better than tying up your money to a low-yielding account and losing your purchasing power, just to avoid a penalty.
- Charges Per-Checks – Some accounts have a limit on the number of checks you can use every month, and charge for every extra check. Know the limit to avoid unnecessary use of checks.
- Charges for Check Bounces – If you need to write a lot of checks make sure there is sufficient amount in your account to clear them. Because every time a check bounces, you will be charged an insufficient funds fee.
- Overdraft Charges – Each time you overdraw from your account, you will be charged an amount of around 25$ (it could vary from bank to bank) as overdraft fee. To avoid such charges, link your checking and savings account so that money can be transferred from your savings to your checking account whenever there is a need.
A lot of people spend an average of $15 to $20 on these charges every month. But you can avoid or minimize such charges if you manage your accounts carefully. Here are some useful tips:
Buy Checks at a Cheaper Rate – If your business needs you to write a lot of checks, ordering them directly from the printer will cost you lesser than buying them from a bank.
Use Overdraft Protection – Setting up an overdraft protection saves you the charges of check bounce. Usually, banks do not charge for overdraft protection and every time the check you write exceeds the amount in your account, such banks cover the additional money required.
Get Discounts – Some banks provide discounts on certain fees and charges if you hold multiple accounts with them. However, not all give you discounts proactively. You have to ask for them.
Debit Card Charges – One way to avoid the debit card surcharge is using your card at a retail outlet, instead of other bank ATMs, for extra cash. There will be no charges for a debit card transaction unless your bank is in the minority. If that’s the case, you have to be even more careful using your card, or switch to another bank that does not charge on debit card transactions.
Invest in The Bank – Some of the small and medium sized banks offer free checking accounts and services if you invest in their bank. Invest in a few shares of the bank, through a broker, to save on the fees and other charges.
Bank Visit and Transactions – Some of the banks offer a free checking account and allow transactions only at the ATMs. In such cases, they charge you a certain amount for every branch transaction. To avoid such charges, use only ATMs and avoid going to the branch unless it’s absolutely necessary.
‘Free’ at a Price – When a bank offers a free checking account or savings accounts, it is always with the condition of maintaining a minimum balance of at least $500 to $2500. Instead of keeping all your money in free checking account with no interest, investing it in a money market account, even though it attracts a fee, with higher rate of interest is likely to be more profitable.
Next Online Banking