The banking sphere is rife with special offers and other conveniences, but that doesn’t always equate to savings, especially when it comes to fees. While ‘convenient’ is the way to go when it comes to automatic bill payment and savings, understanding your institution’s fee structure is vital to your financial management.
Here are a few fee types to understand and evaluate, before you commit your cash.
First, let’s deal with the facts: banks are out to turn a profit. Maintenance and service fees are part of their bottom line, but that doesn’t mean you don’t have choices. A basic rule of thumb is that accounts with high paying interest rates often come with higher fees. Do your research to make sure that you edge ahead of their margin, instead of the other way around.
About that interest-bearing checking, savings and money market account…
Having one is a great idea, in theory. The reality, though, is that rates have been trending low. If you aren’t able to maintain the balance necessary to keep your account fee-free, it’s possible that you’re paying more for the privilege of the account instead of receiving actual benefits.
ATMs are quick & convenient fee-bombs…
Surely you’ve seen it: the $5 ATM fee. Even at $1, $2 or $3, these little (and sometimes outrageous) charges can add up. The good news is you have options. Opt for a bank that owns a number of local ATMs or is part of a larger surcharge-free network.
You’ve been fee’d…
Signing up for a credit card through the institution with which you bank with sounds like a good idea, but it’s imperative that you keep an eye on your interest rates. They’re subject to fluctuations, which may pop up (or down) when you least expect it. While not a fee per se, it does enter into your monthly equation, and payoff plan.
Need more ideas on how to live fee-free? How about eight:
- Make sure you understand and follow account requirements.
- Bundle multiple accounts, including loans, mortgages and credit cards. Then, look into a fee waiver.
- Actually read those account statements and notices you get from your financial institution. You just might find some hidden fees.
- Reevaluate your needs regularly. As they change over time, you might want to switch your money to a fee-free account.
- Withdraw from the ATM once a week, in bulk.
- Opt for cash back when you use your debit card at the grocery store (a free or low-cost alternative to the ATM).
- Protect yourself from careless overdrafts and associated fees by signing up for low balance alerts via your mobile device or computer.
- Link your savings to your checking to fund overdrafts, blunders and miscalculations.
One final piece of advice:
Behind the columns of every bank are employees, people whose job it is to provide you with customer service. If you come across a fee that doesn’t make sense to you, talk to a real live human about it. He or she might be able to rebate the charge, or even find alternatives to get you on the path to fee-free living today.