Beat High Bank Fees

Ten tips to avoid high bank fees

1) Shop around

Look at your statements for the last year. Compare the costs of your accounts both to other accounts at your bank and to accounts at other banks in the area. Know what types of transactions you regularly make. Evaluate accounts with your own needs as a yardstick. Look at and similar sites. Call around or check the websites of your local banks and credit unions. Walk around. Ask bankers for their full schedule of account fees required by law.

2) Bank at a credit union, not a bank

Credit unions are member-owned alternatives to commercial banks. Fees and balances to avoid fees are lower; interest rates on loans are better. Many credit unions have branches, ATM networks and offer all the services of a bank. Most consumers would be surprised at how many ways they might qualify to join a credit union—ask. Credit union deposits are federally insured, just as bank deposits are.

3) Bank at a local bank, not a big bank.

Smaller banks often have lower prices, and better service, than faceless big banks. Bigger banks may have more of their own “free” ATMs, but smaller banks (and credit unions) often offer some free “off-us” ATM transactions and link to surcharge-free ATM networks.

4) Don’t opt-in to “overdraft protection”

New rules prohibit banks from charging you fees for over-drawing your account with your ATM/debit card at a merchant or an ATM unless you say yes (opt-in) to so-called “overdraft protection.” Don’t opt-in. If you already did, opt back out. Your card will be declined at point of sale with no overdraft fee. Carry an emergency $10 in your wallet if this concerns you—it beats paying $35 for a $4 latte. Ask about lower-cost “transfers” to cover negative balances. Note: Even if you’ve said no to “overdraft protection,” checks and automated bill payments can still “bounce.”

5) Get direct deposit to get free checking

Many banks still offer free checking, especially if you have a regular automatic payroll or other direct deposit. Note: Free checking means no fees can be imposed based on your monthly balance, but fees can still be imposed for ATM use, for receiving statements and/or check images in the mail and, of course, for overdrafts.

6) Make noise

Sometimes you can get a better deal at a bank just by asking for it.

7) Bank electronically

Some banks offer free accounts or charge less if you have your statements “sent” to you electronically, if you don’t have your check images returned to you at all or agree not to use human teller services. If you are comfortable banking online you can save. Read disclosures carefully, check your online statements regularly and archive copies of your online statements, even if the bank says it does.

8) Check out internet banks

Banks without branches may have lower fees if you are comfortable banking on the Internet and not ever dealing face-to-face with a person. Note: Check to confirm you found an insured bank.

9) Look for other free checking options

Banks sometimes will waive checking account fees if you do a set of things each month, such as making 5 or more monthly transfers in or out of the account, or move money from low-interest savings. Ask whether you can count all your balances toward your checking minimum. If not, savings account and interest-bearing checking interest rates are so low that putting the money in a regular no-interest checking account to avoid fees may save more in fees than you earned in interest. And, many banks and credit unions offer free or lower cost checking for students.

10) Use free text message warnings

Ask your bank or credit union if it offers free phone text messages or emails when your balance drops to a certain trigger amount. Then transfer money before you risk overdrafts.

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