With a fee for this, a fee for that, fees are a new four-letter word. They certainly add up. The onus is on you to beat the banks at their game.
Form a relationship
Know that most banks are looking for a “total relationship”, that is your bank wants to hold your accounts and help you with other products, but it also wants an opportunity to lend you money, whether it is through an SBA or other business loan, or for an automobile or home loan, points out Charlie Crawford, CEO and Chairman of Private Bank of Buckhead.
“Rate shoppers who have a CD at one bank, a checking account at another and a mortgage at yet another, may not actually save money because of they are not taking advantage of a total banking relationship in which a banker who actually knows them, tailors a menu of services just for them. If a banker can work with a client on that total relationship, they may be more apt to waive fees,” says Crawford.
For instance, many Private Bank of Buckhead clients enjoy free checking, either as a courtesy because they have negotiated a total banking relationship with the institution or because they have committed to using direct deposit, says Crawford. “Ask your bank what fees it may already waive. We offer a no-fee ATM card to all of our clients. We do not charge ATM fees of our own and we refund the ATM fees clients may incur at other ATMs when accessing their PBB accounts.”
Just say no
Do not opt in to pay overdraft fees on debit card purchases or ATM withdrawals. “Banks cannot charge for overdrafts triggered by using your debit card at the cash register or ATM unless you opt in,” explains Jean Ann Fox, director of financial services with the Consumer Federation of America. The typical overdraft fee is $35 per transaction. “Avoid paying the bank's steepest rate for borrowing money by just saying no to overdraft fees. If your bank talked you into opting in for overdraft coverage, you have the right to change your mind and opt out,” says Fox. Ask your bank to opt out of overdrafts triggered by checks, recurring debit transactions, and electronic bill pay.
Keep a cushion in your checking account and monitor deposits and payments form your account to make sure you don't bounce a check or overdraw. Link checking to savings to cover overdrafts. Sign up for email or text alerts on low balance s so you can transfer money into checking or non-sufficient funds fees, says Fox. Your bank may offer a free sweep service to transfer money from your savings account to your checking account should you overdraw, ask whether it does.
Get a prepaid card. “You can't spend what you don't have, so you won't risk any overdraft fees with a prepaid card,” says John Rountree, a principal at The Cambridge Group.
Use ATMs wisely
Find out if your bank offers accounts that reimburse you for ATM fees anywhere you bank. Even some brokerage accounts like Schwab also offer that feature.
Be clear about bill payment
“See if your bank's bill payment service is free, rather than using a service you have to pay for, such as Quicken Bill Pay. My Bank lets me pay via my Quicken program (not Quicken Bill Pay per se), for free,” says Dworsky.
Limit your check payments and switch as much as possible to ACH or bill pay, advises Gilles Gade, chairman of Cross River Bank.
Know what earns waivers
Many banks offer fee waivers if you agree to bank online, use ATMs, use online bill pay, turn off paper statements, or turn on direct deposit, says Rountree.
Keep track of your account balance so you don't inadvertently trigger a monthly fee by falling below the minimum balance requirement.
Choose your account carefully
Select an account that fits the way you use an account. “If you can't keep a sufficient balance to avoid monthly fees for interest-bearing checking, switch to a non-interest account,” says Fox.
Simply put, says Dworsky, “Find the least expensive account in the bank's roster of accounts that will meet your needs at the lowest possible price, if any. I personally never pay any account fees because I have chosen to bank at smaller local or regional banks or Internet banks where fees are less likely to be standard.”
No matter what, says Rountree, “Do your research to understand what each bank offers, charges for, and gives fee waivers for, so that you can find the bank or account that is best aligned with your needs.”