How to Minimize Bank Fees

Determine the banking features that are important to you. When you are shopping for a new bank, think about the services or features that you use and appreciate the most. Then consider which features you may not need and could do without. For example, some people will be willing to pay more for unlimited ATM use, but don’t care about free checking. Another person, however, may rely on writing checks and will want to minimize those particular fees.

• You should consider all the ways in which you use your bank before you begin your search. Then rank the features in order of importance.

Look online for banks that advertise “no fee” banking. Use an online search engine to look for banks that say they don’t charge banking fees. The best way to minimize paying fees on any account is to put your money into a bank that does not charge any such fees. Run a search for “no fee banks” or something similar. If you select a more specialized search engine related to banking, you can enter certain criteria that are important to you and receive information about banks that meet those conditions.

• For example, you can use the search feature at FindABetterBank.com to search for banks with no fees or limited fees. You will be asked a series of questions to help decide which features are most important to you. Based on your answers, you will generate a list of banks that best fit your desires.

Investigate online banks. Online banks do not exist in a physical building. Nevertheless, these financial institutions still offer many of the same services. With an online bank, you can still deposit and withdraw money, write checks and have access to ATMs across the country. Because these institutions do not have the same overhead costs as a physical bank, they may be able to charge lower or fewer fees for the same services.

• MyBankTracker.com provides a list of online banks and reviews of their services.

Visit local banks before deciding. Searching online is a useful tool and can give you information about nationwide banks. However, you may be able to find better deals and more customer service at a smaller, local bank. Either call or walk in to a local bank and ask to speak with an accounts manager. Because the smaller bank may need your business, you might be able to get some special deals with lower fees.

Negotiate for lower fees. When you have narrowed your search for a bank, you should speak with an account manager before opening an account. Ask about eliminating fees for some of the services that are most important to you. At a smaller bank that is trying to attract your business, the manager may be able to help you with these fees. If you are a good customer, with a strong banking history, the bank may be encouraged to draw your business and might be willing to reduce or deduct certain fees.

Meet minimum balances to avoid maintenance fees. Many banks will charge what they call a maintenance fee or even just a minimum balance fee. This fee can often be avoided if you keep a certain minimum balance in your account at all times. There are some additional ways to try to avoid this fee, such as linking accounts together or monitoring your balance through the month.

• For more information about avoiding maintenance fees, you may want to review Avoid Minimum Balance Fees.

Monitor your account balances. A common fee that is charged by most banks is the overdraft fee. This is a fee that is almost entirely within your own control. You just need to keep track of the balances in your accounts - most notably, your checking account - and be careful not to write any checks beyond that amount. This will also apply to whatever account is linked to your debit card, since a debit card works much the same way as writing checks.

• You may get some help in avoiding overdraft fees if you can link your checking or debit account with your savings or money market account. If you link your accounts in this way, you will be less likely to overdraw.

Know your bank’s policies for ATM use. Some banks allow free, unlimited ATM use, while other banks may allow you a number of visits, and then charge a fee for each use. You should also know if your bank is a member of any national or worldwide ATM networks. You may be allowed free ATM use within your network but be charged a fee for using ATM outside your network.

• If you have any questions about ATM fees, call your bank and ask.
• You can avoid paying ATM fees by staying within your network and monitoring your use so you do not exceed the number of free visits that your bank allows.

Keep track of your cards. Many banks will charge a fee for replacing a lost credit card, debit card or ATM card. In some cases, this charge may be as high as $20. This is one fee that you should be able to control. Be careful with your cards, and you will not need to contact the bank for any replacements.

• Don’t accept this fee on its face. If the need arises to replace one of your cards, contact a customer service representative at the bank. Find out if the bank intends to charge a replacement fee. If so, you can often have the fee waived simply by asking.

Leave your account open long enough. Many large banks will charge a fee if you close your account prematurely. When you open your account, you should find out whether there is any requirement to keep your account for a set length of time. Banks rely on the certainty of having your money, and if you withdraw prematurely, they may charge a fee for that. To avoid the fee, just be aware of the requirement and stick to it.

• If you must close your account early, try (as with anything else) to negotiate your way out of the fee. Speak with a manager at the bank and try to explain that you have a strong reason for closing your account early.

Pay your credit cards on time. Fees related to credit card use are a part of banking costs. The most common credit card fee is charged for making your monthly payments late. Nearly every credit card issuer charges a fee, ranging from $10 to $50 for each late payment.

• Paying your credit card bills on time not only helps you avoid the late fee but also helps maintain a positive credit rating.

Ask questions when you open your account. Too many people open accounts quickly and without planning. If you seek to open an account, whether savings, checking or money market, you should find out about the fees that are connected to it. Some of these fees are within the bank’s control, while others may be the result of federal regulations. In either case, it is your duty as the account holder to understand the fees that you face.

• For example, federal banking regulations limit the number of withdrawals per month that you can make from a money market account. If you need regular access to your money, you might get charged excessive fees if you open the wrong account too quickly.

Read and react to notices from your bank. If your bank is going to institute a new fee or increase the charges on an existing fee, they must provide you with notice before enacting these changes. These notices often come in your monthly bank statement. Too many people disregard the details of these notices and, as a result, are not aware of the change in fees. To avoid getting caught off guard, you should check you monthly statement carefully and read the details of any notices that are included.

• If you receive notice of a new or increasing fee, you should decide what action you can take to minimize the impact of the change. For example, if you receive a notice that your bank is going to start charging for ATM use, you can then change your habits regarding the use of ATMs.

Consolidate your accounts. Operating with multiple bank accounts only increases the possibility that you will be charged fees. It also will multiply the amount of total charges that you could face. For example, if your bank charges a monthly maintenance fee for each account, then having three accounts open will triple the amount of the fee that you pay. Carrying multiple accounts also increases the possibility that your minimum balances may drop below allowed levels.

• For example, some people might open separate accounts for “Household spending,” “Child Care Expenses” and “College Savings.” While on the face, these seem to make sense, you subject yourself to multiple fees. A better plan would be to combine these into a single account and then keep your own private records of the subcategories.

Keep your bank aware of any address change. If you move, you need to notify your bank of your new address right away. Some banks charge fees for returned mail. You also risk missing notices of changes in fees if the bank does not have your current address. If the bank does not know your current address, they can’t notify you of fee changes. Even so, you remain responsible.