Five ways to reduce your bank charges

Forum 7 years ago

Five ways to reduce your bank charges

Many customers open different accounts with the same bank because they feel a single account may not be able to meet all their financial needs. Banks also woo customers to open many accounts by offering them different benefits with innovative products.

The bank accounts are usually designed to promote savings culture, provide credit facilities, enable the owner to conduct some specific transactions or achieve a certain goal. While some accounts allow limited number of services to be performed on them, others offer a wider range of services.

For instance, some may allow the owner to send money only within the same bank while others allow transfer to other banks or foreign destinations. A customer may enjoy the ability to pay for his regular bills and other subscriptions through some specific accounts.

Some customers also open different bank accounts because of the interest rates that they earn on them. While some banks make it easy for customers to open account, some may make it difficult when it comes to withdrawal. Customers therefore look for different accounts, which they feel could suit their lifestyles.

Though, these accounts provide different purposes, the banks usually deduct charges on major accounts and services rendered.

An online report published by bankingadvice.com notes that a person needs to have various types of financial accounts in order to make sure he is getting the most out of his money, and positioning himself optimally for the future.

For example, a person may want to have an account to take charge of his retirement saving plans. And he will need a current account (and probably a savings account) in order to manage the flow of money both in and out of his various accounts.

Unfortunately, free bank accounts are relatively hard to come by, so it’s important to manage the applicable fees carefully.

Bankingadvice.com gives some tips on how to reduce, or perhaps even eliminate, the fees paid for banking services.

*Do your research. The first step is to research the various account types and options you have available at your current bank. Make sure you know what your current account fees are — they may have changed since you first opened your account. Your bank probably offers a number of account types, and your current needs may not be a good match for the type of account you now have, at least in terms of applicable fees. Conduct the same level of research.

*Go online. As part of your comparison shopping, be sure to include online banks in your research. Since it is online, banks don’t have to pay the costs associated with maintaining a physical location, retaining a member of staff of bank tellers, and related expenses, you may be able to find accounts with the features you need, but at a lower price than your local bank.

*Understand your needs. Long gone were the days where banks would offer one or perhaps two savings account or current account options. Now, you’re certain to have a number of different options, and each of them will provide you a different mix of features.

In order to make the right choice, give some thought to what’s really important to you. How often do you use bank tellers? How often do you use Automated Teller Machines or automated bill pay? Do you need a safe deposit box?

*Be willing to change banks. Don’t let your own inertia keep you from getting the best terms and fees on your banking conditions. It can certainly be a bit inconvenient to take your business to a new bank or credit union. But if doing so would help you save some money in fees, or earn a bit more each month in interest, or make you eligible for other valuable services the bank offers, then it’s worth the effort to change banks.

*Consolidate your accounts. You may have a number of different accounts at different banks because you haven’t been diligent about closing old accounts. You may be paying fees on some or all of those accounts, so by consolidating your business, you may be able to reduce the fees you pay.

As with any other financial service you use, the best way to avoid paying too much for your bank accounts is to keep yourself well informed.