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Bank fees: a part of life, but something you can work around
Fees are a part of just about everything that involves money, from ordering food delivery to getting cash from the ATM. While you can’t escape fees entirely, there are some that you can avoid—or at least plan for. Put in a little time and research, and you might surprise yourself by what you learn (and how much you can save).
Be informed—shop around for the right bank
Search for banks online and review their range of products and offerings. Do they include fees? If so, what kind? How do they fit into your current budget?
Of course, more goes into choosing a bank than just fees. There’s the type of account you want to open, the services you’re looking for, the accessibility of the bank, customer reviews and reputation. Then there’s the day-to-day stuff like hours and customer service. That’s a lot to consider, but it’s good to look at the whole picture when deciding where to put your money.
Keep track of money coming in and going out
As part of sticking to your monthly budget, map out your expenses (to the penny, if possible), and check your account balance on a regular basis. That way, you can anticipate how fees might impact your account. Make sure you have enough funds left over after you pay your bills to help avoid overdraft fees—a nice little lead-in to our next tip.
Find ways to dodge overdraft fees
There are actually quite a few ways to avoid overdraft fees. It’s worth researching your options and weighing the pros and cons—and this is true for any bank, whether it’s new to you or a bank you’ve been with for years. For example, you can:
Track your balance so you always know what’s coming in and going out (and when).
Look into a very basic checking account that doesn’t have overdraft fees—though it may not have many perks either.
Set up savings overdraft protection by linking your checking account to a savings account to cover your expenses.
Opt out of overdraft services. Keep in mind, your transaction might be declined if your account doesn’t have enough funds available.
Then there’s keeping a minimum balance in your account that’s above the required amount. This gives you a cushion when you need it—in fact, many banks require it. There could be a small fee if you drop below a certain amount (like $100), but that might help you avoid an even larger overdraft fee. If you can afford to deposit some extra cash into your account each month, you'll be in a better position to avoid extra charges.
Take advantage of your bank’s tools and services
Sign up for monthly statements and alerts, such as low-balance alerts. Many banks will give you a discount or even waive certain fees when you sign up for e-statements.
Enroll in direct deposit. You’ll likely get your money faster.
Bank online or in-app. Easily check your balance in real time. Plus, set up recurring payments around your pay cycle.
Use your bank’s ATMs, both locally and abroad. ATMs outside your bank’s network may charge a fee.
Get cash from in-store purchases. Use your debit card to get cash back when checking out at a store to avoid taking out cash at other bank's ATMs that may charge a fee.
Use services like Zelle®, PayPal, and Venmo. Wiring money is more costly and involved.
By applying the tips in this article, you can go a long way in understanding and avoiding fees—and saving some sweet cash.
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This article is based on information available in November 2021. It is for general informational purposes only. It is not intended to provide specific financial, investment, tax, legal, accounting, or other advice and should not be acted or relied upon without the advice of a professional advisor. A professional advisor will recommend action based on your personal circumstances and the most recent information available.