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Home >> Manage Your Money >> Personal Finance
How to Save Yourself from Bank Fees
I want to save some money on my bank fees. Do you have tips that will help me get the best deal?
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 Bank fees can cost you hundreds of dollars a year. Here are some tips that may save you money.
Minimum Balance Ask which account has the lowest required minimum balance to avoid a monthly service charge. Review the features of this account, and based on how you intend to use it, determine if it will be advantageous for you. Consider your use of an ATM or debit card, the number of checks you write each month, how often you may use other services charged for or discounted to owners of this account and include the potential of overdrafts and protection from overdrafts in your equation.
Overdraft Protection Some banks provide overdraft protection products but they are not all created equal. Some are actually a line of credit while others are paid at the banks discretion. In the case of the latter, whether an item is paid or not may depend on how often you have been overdrawn, if you have direct deposit and how much that is expected to be as well as how you handle your account in general. They may also offer a transfer service where any overdraft is paid by deposited funds you have in a savings account. The fees for each of these products can vary with a transfer service being the least expensive. After all, it is your money paying the overdraft, they're just moving the money for you. If this is a $5 fee, that fares much better than a $25 overdraft fee.
Check Payment Order Ask if they pay the largest items submitted for payment first, last, or if they're paid in the order in which they're received. This can be significant, consider the following:
You have $1,000 in your checking account. You send in your mortgage payment of $800. It comes in for payment at the same time as an ATM withdrawal you made for $200, and two other checks for $100 and $75. If larger items are paid first, your mortgage payment is made, but you'll have two overdraft fees to pay. At $25 each this will cost you $50 plus potential expenses at the merchants to whom these checks were payable. That could be another $50 for $100 total. If smallest checks are paid first only one item would be overdrawn so your fee expense would be $25 plus potentially a late fee with your mortgage company, but if you have a transfer account, $175 would be all that was needed to pay this and the transfer fee is all you would owe.
Cheap Checks Don't buy the most expensive checks you can order. Buy the least expensive. You don't really need gold lettering or pictures on your checks. They're for payments, not art.
Ask for Cash When you make a store purchase and use your ATM or debit card, ask for cash back instead of using an ATM. Often there are fees associated with the use of an ATM, especially if it is not under your bank's network. ATM fees are often charged by the owner of the ATM, and by your own bank. If your bank owns the ATM, they often charge you no fee at all. Avoid surcharges and the unnecessary time it takes to go to the ATM. This is also safer as you are not standing in line with money and a robber.
Fees and other disclosures are required to be given to you upon request. This is in accordance with the Truth in Savings Act and Regulation DD. There is no charge for this and your bank won't mind delivering them to a potential customer.
Published on BankingQuestions.com 7/28/06
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