How to Avoid Paying Bank Fees
31 March 2010
This is a guest post from our friends over at CashBlogged.com – a community for the money conscious, hoping to save and spend more efficiently, their team of financial professionals provide the ins and outs of Financial Institutions. Think of them as a tell-all for Banks, Lending Institutions, Credit Companies, and Investment Firms for the beginner spender to the advanced investor.
When was the last time you reviewed your bank statement? Did you notice all those extra dollars you ended up paying at the end of the month? Bank fees are a big reason why people don’t bank at the major financial institutions in Canada and instead choose no-fee accounts offered by ING and PC Financial. These big bank alternatives are great in a lot of situations, except when you need to actually speak to an expert or get a cheque certified. Bank fees at full service banks can be avoided by using the right tricks as well as some careful money management.
After reading this article you can expect to have all of the following bank fees waved:
- Monthly Service Fee
- Cheque Order (Especially because 90% of cheque orders are for 12 post-dated rent cheques)
- Certified Cheques, Money Orders/Drafts
- Statements, Account Confirmation Letters
- Platinum, Gold and Travel Credit Card Annual Fees
- Those nice little Safety Deposit Boxes Annual Fees
How do you get all those things free? Every major bank has a “platinum” chequing account that will give you all the above free – it typically carries a monthly fee of around $25 unless you keep a minimum balance of around $5000. If you can keep $5000 in a chequing account do it! Everything is now free and its a great place to save a portion of your emergency fund. What that $5000 is earning in a savings account vs. what you are paying in monthly service fees makes it worth it alone.
If you can’t afford to keep $5000 in you chequing account then you’ve got a little work to do, if you are a new customer to the bank you NEED to ask for this account for a 3 month trial period and take advantage of everything free, especially if you don’t plan on leaving $5000 in it. This means order a book of cheques ($30 value), sign up for a platinum visa ($120 value), and open a safety deposit box ($60-$150 value). The same goes for existing customers who receive a free trial period of a platinum account. Now lets say your trial period is up, and you can’t keep the minimum $5000 balance to waive the monthly fee, all you’ll need to do is have your account changed to a basic one and you’ll keep avoiding fees. And at least for a year a new platinum visa, safety deposit box and book of cheques – FREE!
Relationships are key in banking! Keep in touch with your advisors, even if they’re not. If you have an existing relationship with a financial advisor or bank teller they should be your primary point of contact in all banking matters. Managers I would avoid because they’ll ask to many questions. At the end of the day if you have a questions, ask! That’s what the bank branch is there for.
In banking you need to take a look at the big picture, something most people fail to do. The $6 dollars a month in interest you’re making in that “high-interest” Savings account the bank representative forced you to open (which by the way is illegal in Canadian banking) vs. the $8 a month you pay for a Chequing account is a prime example of a negative return on your money. Stepping back, taking a look at the big picture and looking into where your money is really going will put more money in your pocket and send you in the right direction towards financial freedom.
A good rule of thumb is that YOU SHOULD NEVER BE PAYING FOR UNNECESSARY BANKING FEES
TIP: Banks hate losing customers, and love new customers – use this to your advantage.