Know Your Bank Fees

Banks provide a valuable service many of us can’t do without. Keeping your money in a bank makes functions available that add both convenience and security to your financial dealings - ATM transactions, wire transfers, issuing checks and many other innovations.

When you use banks to both protect and safe-keep your money, not only are they using it to fund their own investments, they’re charging you through the nose to use their facilities. Some of the charges can be fair. Others can be downright extortion.

Every time you write a check that bounces, you incur a charge. Sounds fair, right? Of course it does, until you learn that banks intentionally clear large checks first to drain your balance so that more of the ones you issue with smaller amounts can bounce.

Some savings accounts can incur charges when the depositor doesn’t put any money in for an entire month. Unless you watch the statements closely, you probably won’t even notice until it’s too late.

They Keep Making That Money

The fees in some banks can account for as much as 25% of their operating income. That’s a lot, considering that banks are expected to largely source their funds from investments and loan interests. Year after year, none of the same fees seem to go away yet new ones appear with every new feature they pack into your accounts.

Keeping the Fees Down

The best way to keep those fees down is to learn what they are and avoid them. Ask your bank for a copy of fee-disclosure documents anytime you open a new account and take note of them. Beware, though, they can be a little confusing with some documents listing as many as 60 or more possible charges.

Generally, though, you will want to look out for the following ten fees which you should find among your potential costs most of the time:

1. Monthly maintenance fees
2. Per-check fees
3. Penalties when you exceed withdrawals or overdraft an account
4. Penalties when you aren’t able to maintain the minimum balance
5. Using ATMs (both your bank’s and others’)
6. Inactivity fees
7. Fees for stored checks
8. Penalties for bounced checks you issue
9. Penalties for bounced checks you deposit
10. Wire transfer costs

Getting The Most Out Of Your Money

To squeeze the most benefit out of your savings, study both the interest rates and accompanying fees when choosing a bank. Some banks can offer significantly higher returns on your savings but drag you down with innumerable charges. Factor them into your computations before deciding where to place your money.

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