Have you ever been surprised by the amount of fees you are charged by your bank? We’ve all been there. While it may seem like a couple dollars here and there won’t make a huge difference, these small amounts can add up, resulting in money that could have been put towards something more useful.
Minimizing the amount of service fees charged to your account can mean potentially saving hundreds of dollars a year. Here are a few ways to reduce banking fees and keep your money in your pocket:
Understand the Fee
Many banks charge a fee for just having an account, while some accounts with rewards programs may charge higher monthly service fees. Understanding what the fee is for is important, because there may be a way around it; many financial institutions will waive their fee if you keep a minimum balance or open joint chequing and savings accounts.
Audit your financial needs to understand whether the benefits outweigh the fees. Is your rewards program yielding as much as you originally thought? Is maintaining a minimum balance is proving to be too difficult? If your account is not benefiting you, it may be time to sign up for a low fee account.
If you find yourself in a high fee situation, you don’t have to stay there! Take the time to learn about different account options, either at your own financial institution or choose a new one. Did you know that most financial institutions offer no fee accounts for students and seniors? Or that some may offer reduced fees for maintaining multiple products? Or that credit unions share their profits back with members in the form of annual returns?
Sure, changing your accounts around (or your bank, for that matter) seems like a hassle, but the process may be easier than you think, especially with guidance from a banking representative. Plus, you get to keep more of the money you’ve earned!
Keep Track of Transactions
An easy way to rack up account fees without knowing it is by going over your transaction limit. Most accounts will have a limit on the amount of withdrawals and transactions per month. So, when it comes to spending, plan ahead! Consider making a larger withdrawal of cash each month that you can for daily expenses, or use your credit card for daily transactions and then pay the balance each month. If you pay off your monthly credit card balance, you not only avoid transaction fees on your chequing or savings account, but you could also be building a stronger credit score — bonus!
Protect Yourself from Overdraft
One of the biggest fees that could impact your account is overdraft fees. If you ever have insufficient funds, each overdrafted transaction can carry a hefty fee along with it. Many banks offer overdraft protection, a service that would pull funds from other accounts to complete a transaction and avoid an overdraft, but these may come with fees themselves. While having overdraft protection in place is a good plan to have in case of emergency, the best way to avoid these fees altogether is to monitor your account closely and set up alerts through your mobile banking to notify you when your balance is getting low. This is another great reason to try and save enough to meet that minimum balance to avoid account fees altogether, and never be charged overdraft.
Use Your Own Financial Institution’s ATM Machines
Perhaps the simplest tip we can offer: use the ATM associated with your bank to avoid unnecessary fees. We’ve all been in a pinch and used the most convenient ATM, but at an additional $4 or $5. If your need for cash is not immediate, save the task for when you can get to your bank’s own machine.
When you bank with a credit union, you have access to a huge network of surcharge-free ATMs coast-to-coast as part of the ding free network.
Whether your account comes with monthly maintenance fees, or you accidentally make too many transactions within a month, an extra charge here and there won’t make a world of difference when it comes to your financial health. However, being proactive about your monthly spending habits just might. If you’re motivated to get a handle on your fees or are interested in learning about low fee account options, give your local credit union a call today.
The tips in this writing are generic in nature and do not constitute specific advice to specific situations. You should consult a professional regarding your specific situation.