Bank accounts are a virtual necessity in the modern world. Unfortunately, banks know this. They know exactly how much you need that bank account, and they can take advantage of this need by charging a ‘service fee’ for every indulgence and any small mistake you might make. The good news is that once you are aware of where these fees come from, you can generally avoid them.
A large portion of bank fees every month are due to using ATMs. Specifically, ATMs that are not within your bank’s network. You can be charged anywhere from $1 to $3 for a single transaction. Sometimes, you’ll be charged this fee twice — once by the ATM network and once by your own bank. That could mean as much as a $6 charge for taking out $20 from some random machine. Instead of visiting whichever ATM is closest, take the time to know where your bank has its machines. If at all possible, use only these machines, avoiding the costly ATM fees.
Another source of fees are overdrafts rates and insufficient funds charges. Saving money on these things seems simple, but it can be hard to avoid these fees if you’re used to running an overdraft. Many people use overdraft in order to avoid insufficient funds charges, but in the long run, this too costs a great deal of money. Save yourself both fees and make sure you always have enough money in your account to cover any check or debit charges. If you have a recurring payment that comes out of your account, absolutely make sure the money is there. If it isn’t, some companies will try to take the money two or three times, and the fees associated with the “NSF” incident will add up to an astronomical amount.
Take a look at your banking plan. Most banks have several to choose from, and it’s up to you to choose the one that is right for you. If you hardly use your bank account during the course of an average month, then the bottom-of-the-barrel account might be right for you. However, if you tend to make many transactions during the month, both self-serve and at the teller, you might be better off considering an all-inclusive service package. Discuss your options with your bank manager, and don’t be afraid to change your plan if it isn’t working for you.
If you don’t like the services your bank offers or the fees they charge, change banks. There are many options available and you can generally get a very good rate by transferring your account to another institution. There are many low-fee or no-fee accounts out there, so shop around and look for the best deal for you and your financial habits. The money you’ll save can make the hassle of changing banks and resetting your automatic payments well worth it.
Unless you are an avid saver, avoid bank accounts that promise to reduce or waive fees if you keep your bank account at or above a certain balance. This minimum balance is usually from $1000 to $3000, so unless you really believe you’ll have that much money just sitting in your account, shop around for a lower-fee bank account. Otherwise you’ll be paying a higher fee for a very long time, and it’s almost never worth it in the end.
In the end, the only way to avoid additional bank fees and charges is to be aware of your spending habits and know exactly what fees you’ll be charged and when. If you are responsible and conscious of your own finances, you should be able to reduce or eliminate most bank fess most of the time.