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I get that banks have to make money.
And I’m totally cool with them making money off of my auto loan or balance transfer fees.
What I’m not cool with is banks making money off of my deposit accounts like checking and savings. When I put that money in the account, they turn around and use it to invest in other assets, which is why I earn a small amount of interest on the money I keep in there.
It’s advantageous for banks to have my business in this way. Even if they don’t make an incredible amount of money off of my not-jumbo-sized deposits, they do open a door to market their lending products to me as a warm lead.
And it’s advantageous for banks to have your business, too. With that in mind, make sure you’re not keeping your money with a bank that charges one of these gross fees.
Some banks will charge you a monthly fee just to have a checking account with them. It’s disgusting and unnecessary. If a bank is charging you for a deposit account, ditch them like a bad date.
Minimum Balance Fees
Other banks will charge you a fee if you don’t keep an average daily balance of $X,XXX in your account. This is exploitative, especially when we’re talking about checking accounts, which get many American families from paycheck to paycheck without a whole lot leftover.
Minimum Deposit Fees
You incur this fun fee when you don’t meet a certain threshold for direct deposits every month. I resent this fee as a freelancer with irregular income who doesn’t always get paid through direct deposit.
I also resent it because it’s a poor tax. You’re punishing people who don’t make a lot of money by taking more of their money. It’s super unethical in my opinion. So not with it.
I’ve been doing online banking since 2006. One thing I’ve always liked about that is that the financial institutions I’ve worked with have never charged me an ATM fee for using an out-of-network cash machine.
They’ve also always refunded my ATM fees if they are charged by the owner of the ATM. So let’s say Bank XYZ charges me for using their ATM while I’m on a road trip. I have to pay $2.50 to get money out of my account. At the end of the month, my financial institution would refund me that $2.50.
If your bank is charging you money in order to access your money, it’s time to call your relationship quits. You can do better.
Overdraft Protection Transfer Fees
Most banks won’t charge you to set up overdraft protection, which links your savings account to your checking account. Should you ever spend more than you have in your checking, overdraft protection pulls money out of your savings account to make up the difference. If you don’t have protection, you’re usually charged a hefty fee for overdrawing your account.
However, some banks are sneaky and will charge you when you need to use that protection. These charges are called transfer fees, and they’re ridiculous. They allow banks to say, “We don’t charge you a fee to enroll in overdraft protection!” while still charging you should you ever have to actually use overdraft protection.
Which is shady as all get out. Find a bank that treats you better.
Find Someone Who Treats You Better
These are all common fees, believe it or not. You may even be paying some of them without realizing. I’d encourage you to get out your latest account statement and check.
If you are, know that there are other fish in the sea. Credit unions are a great place to look, but I also recently became aware of Radius Bank’s Hybrid Checking Account, which does not charge any of these fees. On top of not being sketchy with their fee structure, they also allow you to deposit cash at certain ATMs–even though they’re based online. Which is pretty cool.
Make sure your bank doesn’t charge you gross fees. And if you discover they’re a little grimy, walk out the door and don’t look back.