Depositing money in a bank is safe, right? But did you know your money can be eaten up by fees in no time. Avoid Bank/Credit Union Fees!
Avoid the Low Balance Fee (aka Minimum Balance Fee, Monthly Service Charge)
This fee is charged by financial institutions on customers they feel will cost them. If you have a low balance they have to pay for systems and people to maintain your account, with no return for that “investment.” They assume you won’t take out a loan, you use multiple institutions, and it will cost them more to have you as a customer. The fee they charge helps them to cover that extra cost.
You could bank elsewhere, but many institutions also offer “free” accounts. You just have to use certain services, or interact with them “X” times per month. This brings non-interest income to the financial institution, so they don’t mind your low balance.
- Use direct deposit (even just $100)
- Use online billpay
- Receive eStatements
- Use a debit card “X” times per month
Don’t assume opening a “fee-free” savings or money market accounts is a way to avoid these fees. Regulation D limits the number of pre-authorized withdrawals and transfers from both savings and money market accounts. Exceed the maximum of 6/month? You’ll be hit with a whole other kind of fee.
Avoid Bank Check Fees
No one is safe from this fee. You need checks to pay your mortgage, bills etc. The banks know this and have taken steps to profit from it by charging $30-$60 for a standard single box and even double that for their business who have additional uses for checks (i.e Payroll,vendor and supplier payments). They contract a printing company and then add a middle man fee to the actual check price often as high as 100% so that they receive a commission from your purchase. You can avoid these fee’s entirely by shopping at an independent check printer like Checkworks.
Avoid the Stop Payment Fee
Whether you’ve lost a check, canceled a transaction, or sent out a duplicate payment, this type of transaction is going to cost you. The average stop payment fee is $32.40. That’s bad enough, but that stop payment is only good for six months, then your check may be considered stale dated, but there’s no rule saying a check can’t be cashed. That decision is left up to the bank being asked to cash the check. So after six months you can place another stop payment, and continue to do so every six months. That’s going to add up! Your best bet is to weigh the cost. If the check amount is actually lower than the cost to stop the payment, let it go. If the check has been lost, what are the odds it’ll be found? It may be better to just take the risk.
Avoid Balance Transfer Fees
This is a tricky one, and usually a guaranteed charge with a new credit card. Do your shopping. There are many institutions offering $0 Balance Transfers. There is usually a time limit to transfer the balance, but some offer no transfer fee, ever! Try sites like nerdwallet.com, credit.com, and cardhub.com for a list of zero cost transfer cards.
Avoid Overdraft Fees
This is an easy one to avoid all together. Make certain you know your balance, and any payments scheduled. But accidents happen, and emergencies arise. Knowing your options can save some if not the entire fee.
Some student-checking options come with an “Ooops Policy” that allows for a certain # of overdrafts per year, or free automated transfers from a savings or credit line. Most banks/credit unions will also waive the fee if it’s your first time. Just call as soon as you see and and politely explain what happened. It will not be as easy a second time (or a third). Also, if you bounce one check, they draw out the fee, and then cash the next check and charge another fee, etc. etc. Some have a maximum allowed on # of items, $ amount of fees, or other limits. Just know your bank. If you overdraft (no judgement, just know your type), be aware of these fees. Opt-in for overdraft to prevent yourself being caught short, but also look into a line of credit or back up account to cover you. Transfers from those options are usually lower than the average overdraft fee ($10 – $38).
Avoid ATM “Balance Check” Fees
You use an ATM to check your balance before making a purchase. You’re responsible, you want to make sure you have enough. You agree to the ATM fee and select “check balance”. But they get you in the end. Your institution may charge a fee for balance checks. Solution? Use your institution’s mobile app. It’s free, and you can check balances and so much more!
With increases to regulations, comes a decrease in banks’ and credit unions’ ability to earn money. Fees are on the rise. Shopping for your best options is time well spent.