Knowing how you bank leads to one of the keys to keeping
your banking costs down. Understanding yourself as a banking customer helps you
avoid fees. Unless you bounce a lot of checks, most bank fees aren't going to
put a big dent in your weekly budget. But, like so much of our spending, this
is money that falls through the cracks. When it's all added up, it matters a lot.
Banks charge all sorts of fees. Some fees you'd be
hard-pressed to avoid, but when it comes to checking accounts, most consumers
should be able to dodge the bullets.
Balance your checkbook
and forget about trying to take advantage of "float" if you want to
avoid bounced-check fees. In the old days when all mail went by the Postal Service,
you had a few days to fund the account after writing the check. That's gone, but
there are some legitimate
ways to buy time.
If you don't frequently monitor your
account balance online, then keep tabs with an old-fashioned check register. Banks
still have them, and they may be more convenient for some people. Debit and ATM
cards can make it tough to keep track of transactions. Save your receipts -- put
them in your wallet or wherever you're sure to see them when you get home and
can enter them into your register.
If none of this works for
you, then sign up at the bank for overdraft protection. This is not "bounce
protection," which you automatically get with most checking accounts. You
must sign up for overdraft protection in order to receive it. The Bankrate Basic
"Overdraft protection plans"
explains both programs.
Avoiding ATM surcharges and fees is
easy if you can estimate your cash needs well enough in advance that you have
time to use your bank's ATM. If you have to pay a total of $3.50 to take $40 from
an ATM, it's akin to paying 9 percent interest -- a big waste.
hard to imagine anyone who needs an interest checking account that pays 0.24 percent,
especially when the bank wants you to keep thousands of dollars in the account
to avoid fees. Some institutions in Bankrate's Online
Interest Checking database pay a worthwhile rate and don't require an exorbitant
amount of money to stay in the account. You also might consider doing a search
for reward checking if you use a debit card frequently.
for most people, a plain vanilla free checking account will work just fine. Pair
it up with a high
yield money market account at another institution, link them electronically,
and you're set.
For a growing number of people, online banking
works great. Setting up direct deposit for a regular check might help you avoid
fees, and most online banks have liberal ATM policies that reimburse your account
for multiple ATM transactions per month.
You know what works
best for you. Find a bank that suits your habits and meets your needs and you
won't get caught in the fee trap.