Have you ever heard the old saying, “Penny wise and pound foolish”?
It’s a little knock at folks who tend to be frugal about small expenditures but not so cautious when they’re buying the big stuff. (The person who uses coupons to purchase toilet paper, for example, but doesn’t negotiate a better price for an expensive new car.)
We all like to think we’re using our money efficiently, but it can be easy to miss out on chances to save. That’s especially true when costs are automatic and virtually invisible (or, at least buried in the fine print), like the maintenance fees some banks charge for their checking accounts.
Customers tend to think of them as the price of doing business. After all, it can be tough to function in today’s world without some kind of cash management account where you can deposit, hold and withdraw money.
But those fees can eat away at the money you’ve worked hard to earn. And according to the most recent Moneyrates.com survey, monthly maintenance fees continue to rise, and now add up to an average $162.96 per year.
The good news is there are ways to avoid account maintenance fees without going back to the good old days of shoving money under the mattress. This list is in no way comprehensive of all the options out there, but here are a few possible ways to avoid potential fees.
1. Opening an account online
Because online financial institutions don’t have brick-and-mortar branches, tellers or other overhead costs, they tend to pass those savings on to their customers. That typically means better interest rates for savings, but also low or no fees on account balances.
2. Meeting the minimum balance requirement
If you aren’t ready for online banking — or you want to keep at least some money in a traditional financial institution — there are still ways to possibly duck that monthly maintenance charge.
Fees and rules vary from bank to bank, and from account type to account type, but generally you can avoid the cost if you keep your balance over a certain threshold. If your balance drops below that amount, your bank statement will show you were charged for the month.
Banks measure and enforce the minimum balance in different ways, and there can be more than one minimum balance for the same account. (One amount might be required to keep an account open, for instance, while a higher balance could be required to qualify for fee waivers or interest payments on deposits.)
So be sure you understand the requirements for your specific type of account. You can usually find that information on the financial institution’s website, but if you can’t, call customer service for a jargon-free rundown. And you could also ask that you receive an email or text if your balance drops below the minimum.
3. Enrolling in direct deposit
Banks may waive the maintenance charge for those who have funds electronically transferred into an account.
You can check your bank’s website to see if this is their policy. It may be possible to have paychecks, tax refund, Social Security checks and other payments delivered this way.
There may be a monthly minimum set for this amount, as well, so ask about that — and how the minimum applies if you split the direct deposit among two or more accounts.
4. Opening multiple accounts at the same financial institution
If your bank is looking for a total customer relationship, it may offer free services for those who use more than one of their services (such as a savings account, certificate of deposit
, or IRA).
Just be sure to do some research and crunch the numbers before you put all your money in one place. Another institution may have a better rate on CDs, or offer better investment services, etc.
5. Don’t overlook a potential discount
You may qualify for a lower fee (or no fee) if you’re a veteran, a senior, disabled, or a student. It can’t hurt to ask — and be prepared to show some paperwork. You also might be able to get a discount if you ask your bank to stop sending you monthly statements in the mail.
The incentives for going paperless aren’t always about money — and your bank may try to convince you that it’s more about cutting clutter and saving the planet. But paperless is a source of savings for them, and it might mean savings for you, too.
6. Changing banks — or the way you bank
Maybe you chose your bank years ago based on location, reputation, or a friend’s recommendation. But if you’re paying for services that are free elsewhere, it might be time to consider a breakup.
Before you go, you may want to talk to someone in charge about why you’re leaving, and see if you can negotiate terms you feel better about. If that isn’t possible, take the time to research your next move.
Will you be comfortable with a change? You could check out what other customers are saying in online reviews, and look at the website to be sure there aren’t any surprise fees with your new account. Consider whether online banking is a fit for you as you go forward.
7. Checking your statements for mistakes — theirs and yours
If you aren’t sure what kind of fees you’re paying month to month, you might want to start taking a closer look at your statements. You may find you’re being incorrectly charged — or that you’re making mistakes yourself that are costing you more money than you’re saving.