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Nobody likes to pay banking fees, yet they seem to keep chipping away at your savings every time a statement arrives. One of the most important actions to take in order to reduce the banking fees you are currently paying is to figure out exactly how you use the bank. Consider what your average balance will be and how low the balance may dip. Also consider the type of transactions you make and what types of services you need. Once you have a better understanding of how you utilize the bank, you are in the position to get the most out of it while avoiding fees for services you don't need or use.
Probably the best move you can make is to try and qualify to become a member of a credit union. Credit unions are not for profit organizations meaning they don't have to worry about making a profit. The qualifying factors to join a credit union vary from institution to institution, so you will need to check with each. The good news is that there are a large number of credit unions associated with a wide variety of organizations. Qualifying for inclusion has been broadened a great deal over the years, so it is much easier to find a way to qualify.
Since credit unions are there for their members and not out to make a profit, they are much more likely to offer completely free checking or free checking with a small minimum balance. In most cases, they also charge lower banking fees and their interest rates on accounts are higher. The one big drawback is that they tend to have fewer branches and automatic teller machines (ATMs) than major bank networks which can be costly if you are an ATM addict. You can begin your search to locate a credit union near you at the National Credit Union Administration.
If a credit union isn't a possibility, then you need to take a look at the different types of banks. While the major banks will have a better distribution of ATMs and a greater variety of services, their fees can be as much as 50% higher than those of local banks. It is also worthwhile investigating Internet banks since their fees still tend to be lower than those of major banks.
Once an appropriate bank has been chosen, reducing the standard fees they charge is an important first step. Although there are a wide variety of checking accounts offered, most banks will offer at least two typical checking account alternatives. A basic checking account will have a lower minimum balance requirement, but it will usually have restrictions on the number of no cost transactions you are able to make each month. A premium account will usually offer interest and allow for more no cost transactions, but will require a larger minimum balance to avoid monthly fees. Not meeting the requirements of either of these can be quite costly, so it pays to chose the checking account style that best fits your use.
Although an interest earning checking account seems like the obvious choice to make, there are a variety of situations where you're better off choosing a no interest checking account. If your account balance fluctuates quite a bit so that you are likely to go under the minimum balance required for the account even a few times during the year, you are likely to pay more in fees than you will ever earn in interest. In addition, checking account interest rates are some of the lowest, so choosing a checking account with no interest and a low minimum balance can make sense if you can put the difference into a higher yielding account.
Many people have several bank accounts at different institutions. It sometimes make sense to consolidate them at one bank. Consolidating your banking to one bank can give you more leverage in negotiating fee reductions and allow you to be more proactive in getting the best deals available. If you keep several different accounts at a bank, some banks will take into consideration the total balance of all your accounts at the bank. Although you may not have the minimum requirement in your checking account to earn interest, if you are also keeping a large deposit in a CD account that more than covers the checking minimum, the bank may be willing to count the balance of the combination of accounts as meeting the minimum requirement.
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Another option you can choose that can give you leverage when negotiating on checking account fees is to have your paycheck direct deposited. Although every bank has its own set of rules, most will waive the checking account monthly fees if you direct deposit your paycheck. Don't, however, assume they will automatically give it to you. Chances are you will have to politely ask before they offer you this service.
A further possibility in getting free checking is to invest in the bank. Although this doesn't work with the larger banks, some small to medium sized banks have programs that award free checking and other special offers to investors. All you need to do is purchase a single share of stock to qualify.
An area where people often accidentally incur fees is by bouncing a check. Not only is it embarrassing, a bounced check and the non-sufficient funds fee that comes with it will cost you about $25. There is absolutely no reason to pay this since it can be avoided by simply signing up for overdraft protection. What is done is your checking account is linked to an account which the funds will be taken from if there is not enough money in the checking account. Although a fee will be involved when the overdraft protection is needed, it is far less than the fee for bouncing a check. Setting up overdraft protection is usually free. The one issue to be aware about is that the overdraft protection is often a loan that will incur credit card type interest, so repaying it as quickly as possible is essential.
Once you decide where to do your checking, banks know that it is easy and convenient for you to order your checks right then and there as you are signing up for your account. They make a tidy profit for giving you this convenience. A way to reduce these check fees is by purchasing your checks directly from the printer. While check prices run about $25 at a bank, the same checks from the printer will cost less than half of that.
By taking the time to study how you use banks and what you need from them, you have put yourself in the position to greatly reduce your banking charges. You will also have the knowledge to avoid the typical fees banks charge for convenience which can save yourself hundreds of dollars a year. Now that is something you can bank on.
Probably the best move you can make is to try and qualify to become a member of a credit union. Credit unions are not for profit organizations meaning they don't have to worry about making a profit. The qualifying factors to join a credit union vary from institution to institution, so you will need to check with each. The good news is that there are a large number of credit unions associated with a wide variety of organizations. Qualifying for inclusion has been broadened a great deal over the years, so it is much easier to find a way to qualify.
Since credit unions are there for their members and not out to make a profit, they are much more likely to offer completely free checking or free checking with a small minimum balance. In most cases, they also charge lower banking fees and their interest rates on accounts are higher. The one big drawback is that they tend to have fewer branches and automatic teller machines (ATMs) than major bank networks which can be costly if you are an ATM addict. You can begin your search to locate a credit union near you at the National Credit Union Administration.
If a credit union isn't a possibility, then you need to take a look at the different types of banks. While the major banks will have a better distribution of ATMs and a greater variety of services, their fees can be as much as 50% higher than those of local banks. It is also worthwhile investigating Internet banks since their fees still tend to be lower than those of major banks.
Once an appropriate bank has been chosen, reducing the standard fees they charge is an important first step. Although there are a wide variety of checking accounts offered, most banks will offer at least two typical checking account alternatives. A basic checking account will have a lower minimum balance requirement, but it will usually have restrictions on the number of no cost transactions you are able to make each month. A premium account will usually offer interest and allow for more no cost transactions, but will require a larger minimum balance to avoid monthly fees. Not meeting the requirements of either of these can be quite costly, so it pays to chose the checking account style that best fits your use.
Although an interest earning checking account seems like the obvious choice to make, there are a variety of situations where you're better off choosing a no interest checking account. If your account balance fluctuates quite a bit so that you are likely to go under the minimum balance required for the account even a few times during the year, you are likely to pay more in fees than you will ever earn in interest. In addition, checking account interest rates are some of the lowest, so choosing a checking account with no interest and a low minimum balance can make sense if you can put the difference into a higher yielding account.
Many people have several bank accounts at different institutions. It sometimes make sense to consolidate them at one bank. Consolidating your banking to one bank can give you more leverage in negotiating fee reductions and allow you to be more proactive in getting the best deals available. If you keep several different accounts at a bank, some banks will take into consideration the total balance of all your accounts at the bank. Although you may not have the minimum requirement in your checking account to earn interest, if you are also keeping a large deposit in a CD account that more than covers the checking minimum, the bank may be willing to count the balance of the combination of accounts as meeting the minimum requirement.
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Another option you can choose that can give you leverage when negotiating on checking account fees is to have your paycheck direct deposited. Although every bank has its own set of rules, most will waive the checking account monthly fees if you direct deposit your paycheck. Don't, however, assume they will automatically give it to you. Chances are you will have to politely ask before they offer you this service.
A further possibility in getting free checking is to invest in the bank. Although this doesn't work with the larger banks, some small to medium sized banks have programs that award free checking and other special offers to investors. All you need to do is purchase a single share of stock to qualify.
An area where people often accidentally incur fees is by bouncing a check. Not only is it embarrassing, a bounced check and the non-sufficient funds fee that comes with it will cost you about $25. There is absolutely no reason to pay this since it can be avoided by simply signing up for overdraft protection. What is done is your checking account is linked to an account which the funds will be taken from if there is not enough money in the checking account. Although a fee will be involved when the overdraft protection is needed, it is far less than the fee for bouncing a check. Setting up overdraft protection is usually free. The one issue to be aware about is that the overdraft protection is often a loan that will incur credit card type interest, so repaying it as quickly as possible is essential.
Once you decide where to do your checking, banks know that it is easy and convenient for you to order your checks right then and there as you are signing up for your account. They make a tidy profit for giving you this convenience. A way to reduce these check fees is by purchasing your checks directly from the printer. While check prices run about $25 at a bank, the same checks from the printer will cost less than half of that.
By taking the time to study how you use banks and what you need from them, you have put yourself in the position to greatly reduce your banking charges. You will also have the knowledge to avoid the typical fees banks charge for convenience which can save yourself hundreds of dollars a year. Now that is something you can bank on.
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