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Top 5 Ways to Cut Banking Costs

Sun, 11/11/2012 - 8:58pm | by Guest Contributor

Technology is swiftly changing the way we handle our banking. Banks have figured out how to use the internet to make their customers' experience easier and cheaper. And smartphone technology has created the opportunity to handle our banking tasks from anywhere in the world. But all of these upgrades do not necessarily make banking any cheaper. Now more than ever it's important to find every little opportunity to save money, and banking is a key area. We have to interact with our financial institution every month, and sometimes much more frequently. So any bit of savings can make a huge difference. Here's a look at the top five ways you can slim down your banking costs.

1) Savings Accounts.

Many people still keep the bulk of their savings in a banking institution savings account. So it's incredibly important to choose the right one. Do you have to pay a monthly fee to use your savings account? If so, it's time to move your cash. Most of the major banks offer savings accounts with no monthly or annual fees, as long as you keep a minimum balance in the account. And that minimum is generally pretty low, often only $100 or so. But in those cases, the interest rates are also incredibly small. The account may not cost you anything, but it isn't making you much money either. Putting your money in a higher yield account can help make up for any other banking fees you tend to incur. So take the time to research all available options, such as CDs or money market accounts. Pick the option that best fits your spending habits. In the end, the difference in interest may not amount to much, so make sure you choose a savings account with a low minimum that includes a fee-free checking account.

2) Borrowing.

It's much easier to understand your banking costs when it comes borrowing. You know the amount you're getting, and what the interest rate will be. But a lower interest rate does not automatically mean savings. Take a look at any set up fees or closing costs on the loan that may end up costing you more than the savings on the interest rate.

3) Cash withdrawals.

Automated Teller Machines (ATMs) can now be found on nearly every commercial block. They're in convenience stores, restaurants, and on the outside of banks. But not every ATM is the same. Using one of those in store machines will generally cost you two levels of fees: one for using the machine itself, and one for using an ATM that's not part of your bank's network. You could end up paying 4%-8% over the money you're taking out just for the convenience of using that ATM. So stick to using your own bank's ATM whenever possible. If you're passing by a bank location, pull out some cash, even if you don't immediately need it. You'll appreciate the extra stop when you get your bank statement and don't see those unnecessary fees. Also be sure to choose a bank that doesn't charge you a fee for using your debit card at an ATM. That's fairly standard these days, but double check just to be sure.

4) Overdrafts.

This is another banking cost that is completely avoidable. If you write a check that bounces because you don't have enough money in your account, you will end up paying an overdraft fee. Depending on the bank, this could range from $15 to $30 per transaction. Those charges will add up in a hurry, and if your account is already running low they can be devastating. The fix is simple. Make sure you take the time to balance your checkbook each and every month, and don't write a check if you're not sure you have the money to cover it.

5) Check printing.

With hundreds of options for check printing, this is a great place to save some cash. Your bank will give you starter checks, and then ask for $25 or more for the first printing. Take the time to research discount check printers, and you could save 80% of those fees. Order checks online to realize the most savings.

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