Here are some suggestions to reduce the bank fees you pay:
•Banks want to encourage customers to do most of their banking with them, so if you have more than one account at a bank, you may be able to reduce bank fees by qualifying for no-fee or low-fee bank offers. If you have money in both checking and savings accounts, ask whether the balances may be combined for purposes of meeting the bank's minimum balance requirements, so you can reduce bank charges.
•If you do not care about receiving your canceled checks back each month, you might qualify for a special deal to reduce bank fees on your checking account.
•Ask your banker about ways to pay less in bank fees and reduce or eliminate bank charges that you currently pay. For example, if you write very few checks each month, a "basic" banking account might save you money (see Types of Bank Accounts). Remember always to read the fine print and think through the costs of switching any bank accounts.
•You might be able to reduce the banking costs on your checking account if you arrange for "direct deposit" of your paycheck (having your employer deposit your pay directly in your bank account). Having funds automatically deposited into your bank account also can help avoid bank fees from bounced checks.
•Look into special deals that reduce bank charges if you keep a certain amount in your bank account, arrange for "direct deposit", or do a lot of your banking electronically, such as banking online and at ATMs.
•Some banks offer "clubs" with special bank offers or reduced bank fees for certain groups, such as senior citizens. Check these out.
•Limit or avoid ATM fees by using your own bank's ATMs or those owned by institutions that do not charge ATM bank fees to non-customers. If you do pay an ATM fee, consider withdrawing larger sums each time so you will cut down on the number of transactions.
•If you are a good banking customer with a clean record, your bank might be willing to refund an occasional bank service charge for a late credit card or loan payment, a bounced check or some similar offense. You might also be able to get a lower interest rate on a credit card or other loan.
•Avoid bounced checks and related bank fees by balancing your checkbook.
•With "overdraft" protection, the bank will automatically honor a check you write even if you do not have enough funds in the bank account. The bank might still charge you interest or other bank fee but it should be less -- ask.
•Save on check printing / ordering fees. Instead of ordering checks through the bank, consider buying them from less expensive sources, such as online or mail-order companies. If you write a lot of checks each month, the cost savings could be significant.
•Every few years, compare your bank's costs / fees / charges to those of a few competitive banks. You may find a great bargain elsewhere or discover a better deal at your current bank. When comparison-shopping, concentrate on the bank accounts and services you actually use. Be aware that a low interest rate offered on a credit card or another loan may just be an introductory rate that could go up substantially after a few months.
In shopping for a bank account, it is important to look closely and compare bank account features. Here are some of the most common bank account features to compare:
Interest Rate - The rate of interest (interest is money a bank pays you for its use of your funds), expressed as a percentage, that a bank account will earn if funds are kept on deposit for a full year. It does not reflect the effect of compounding interest.
•What is the interest rate?
•Can the bank change the rate after you open the bank account?
•Does the bank pay different levels of interest depending on the amount of your bank account balance, and, if so, in what way is interest calculated?
Interest Compounding - The frequency that earned interest is added to the principal so that you begin to earn interest on that amount as well as on the principal. Often referred to as interest on interest. The more often interest is compounded, the greater the annual percentage yield.
•How often is interest compounded? In other words, when does the banking institution start paying interest on the interest you have already earned in the bank account?
Annual Percentage Yield (APY) - The APY is a rate that reflects the amount of interest you will earn on a deposit on a yearly basis expressed as a percentage.
•What is the minimum balance required in your bank account before you begin earning interest?
When You Start Earning Interest - Interest is money a bank pays you for its use of your funds.
•Do you begin earning interest on the day you deposit a check into your bank account - called earning on your ledger balance?; or
•Do you begin earning interest later, when the bank receives credit for the check - known as earning on your collected balance?
•Will you pay a flat monthly bank fee?
•Will you pay a fee if the balance in your bank account drops below a specified amount?
•Is there a charge for each deposit and withdrawal you make from your bank account?
•If you can use ATMs to make deposits and withdrawals on your bank account, is there a bank charge for this service? Does it matter whether the transaction takes place at an ATM owned by the bank?
•If you have a checking account or a money market account, how much will ordering checks cost? Will you be charged a bank fee for each check you write?
•Are bank fees reduced if you have other accounts at the bank?
•Are bank fees reduced or waived if you agree to directly deposit your paycheck or government payments, like a social security check?
•What is the bank fee if you request the bank to stop payment on a check you have written?
•Is there a bank fee for asking how much money you have in your bank account (a balance inquiry fee)?
•Does the bank charge a fee for closing a bank account soon after it is opened? If it does, when will the bank fee be imposed?
•What does the bank charge for writing a check that bounces (a check returned for insufficient funds)? And what happens if you deposit a check written by another person, and it bounces? Are you charged a bank fee?
Other Bank Features
•Does the bank limit the number or the dollar amount of withdrawals or deposits you make in your bank account?
•If you close the bank account before interest is credited to your account, will the bank pay you the interest that has been earned until that time?
•How soon does the bank allow you to withdraw funds that you have deposited to your bank account?
Time Deposits - An account, such as a certificate of deposit, with a maturity of at least seven days, from which you are generally not allowed to withdraw funds unless you pay a penalty.
•What is the term of the account? In other words, how long is it until the maturity date?
•Will the account roll over automatically? In other words, does the account renew unless you withdraw your money at maturity or during any grace period provided after maturity? A grace period is the time after maturity when you can withdraw your money without penalty. If there is a grace period, how long is it?
•If you are allowed to withdraw your money before maturity, will the bank impose a penalty? If so, how much?
•Will the bank regularly send you the amount of interest you are earning on your account - or regularly credit it to another bank account of yours, like a savings account?
Simplify your life. Your bank can arrange for the "direct deposit" of your pay and benefit checks and other regular income into your bank account / checking account. Most experts agree that direct deposit is safer and more convenient than paper checks. There are no delays in getting funds deposited because checks are not lost in the mail, forgotten at home or waiting for you to return from vacation. As mentioned previously, you might even get a break on your checking account if your paycheck is deposited electronically.
You also can have your bank automatically make some of your regular payments directly out of your bank account / checking account, such as your mortgage, health insurance premiums, utility bills and investments in a mutual fund. That can be an easy, economical alternative to writing and mailing a lot of checks each month. Also think about doing other banking the high-tech way, such as withdrawing money from ATMs instead of standing in line at the branch or rushing to get to the branch during banking hours. Consider using a bank debit card or check card to pay for purchases from your checking account without writing a check. Banking from home, by phone or computer, also can be a time-saver.
Use your bank as an information resource. A good banker can be an excellent source of advice and information -- not just for banking tips but also about starting or expanding a business, buying a car or home, qualifying for a loan or dealing with a debt problem. He or she also might be able to direct you to good contacts in other businesses or have excellent reference material handy. All of this is yet another reason to get to know the right people at the bank.
Your bank also could have a customer newsletter or a website that provides useful tips for handling your financial affairs. Many banks also offer seminars on topics such as saving for retirement or a child's college education. Add this information to everything else you learn from your lawyer, accountant, financial planner, the media and other sources, and then put it to use when shopping for, or using, financial services. And anything you can learn from the bank about your rights and responsibilities as a consumer can help you avoid misunderstandings and get any problems solved quickly.