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FDIC Consumer News - Summer 1998
|You Cant Expect Something for
But often you can pay less in bank fees.
You cant expect something for nothing. After all, banks are for-profit businesses, subject to taxes and the demands of stockholders. Still, there are many things you can do to limit the fees you pay. Here are some suggestions:
Review your monthly mailings and see how much youre paying in fees. Then ask your banker about ways to reduce or eliminate those charges. If you write very few checks each month, for example, consider a cheap, no-frills checking account, sometimes referred to as a basic banking account. But always read the fine print and think through the costs of any move, such as what you might lose in interest by moving money from a savings account into a checking account just to meet the minimum balance requirement.
Every few years, if not more frequently, compare your banks costs to those of a few competitors. You may find a great bargain elsewhere or discover a better deal at your current bank. When comparison- shopping, concentrate on the accounts and services you actually use. Dont be concerned about analyzing every product or fee you see listed. Also be aware that a low interest rate offered on a credit card or another loan may just be an introductory teaser rate that could go up substantially after a few months.
Your bank might give you a special deal on your checking account if you arrange for direct deposit of your paycheck. Having funds automatically deposited into your account also can help avoid bounced checks.
Banks want to encourage customers to do most of their banking with them, so if you have more than one account at the bank, you may qualify for no-fee or low-fee offers. If you have money in both checking and savings accounts, ask whether the balances could be combined for purposes of meeting the banks minimum balance requirements.
Look into special deals if you keep a certain amount in your account, arrange for direct deposit, or do a lot of your banking electronically (ATMs, banking at home by computer).
Some banks offer clubs with special offers or savings for certain groups, such as senior citizens. Check these out.
Limit or avoid surcharges (access fees) at the automated teller machine by using your own banks ATMs or those owned by institutions that dont charge fees to non-customers. If you do pay a fee, consider withdrawing larger sums each time so youll cut down on the number of transactions. (For more tips on how to reduce ATM fees, see our Spring 1998 issue.)
If youre a good customer with a clean record, your banker might be willing to refund an occasional service charge for a late credit card or loan payment, a bounced check or some similar offense. You might also be able to get a lower interest rate on a credit card or other loan.
Avoid bounced checks by balancing your checkbook regularly so you can keep an eye on the bottom line. Jean Ann Fox, director of consumer protection for the Consumer Federation of America, says its getting harder and harder, especially for people with joint accounts, to keep track of an account balance because there are so many variables beyond just paper checks. She said, for example, that consumers should immediately deduct from their balance for ATM withdrawals, bank fees, and debit card purchases at stores.
With overdraft protection, the bank will automatically honor a check you write even if you dont have
enough funds in the account. While overdraft protection avoids bounced check fees (imposed by banks, stores, landlords, etc.), Fox notes that the service does come with costs, so be sure it really would save you money.
Consider buying checks from mail-order companies, especially if you write a lot of checks each month and the cost-savings could be significant. Before placing your order, ask your local Better Business Bureau or state consumer protection office whether the company is legitimate.
If you dont care whether you get your canceled checks back each month, you might qualify for a special deal on your account.
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