If you’ve ever dealt with banks, you might have been confused by the number of fees they charge for seemingly every transaction. For instance, does it not make sense for them to waive off the fees for opening a checking account to encourage more depositors? But that is not the way things are done. If you wish to go to another bank, they will also charge for the same transaction anyway.
The answer is straightforward--bank fees are the lifeblood of these companies.
You will likely find the following charges from your bank:
- ATM fees -- If you transact within your bank, the transaction is free. However, there may be cases when you have to get money from another ATM. Interbank withdrawals will cost you around $2.50 per transaction.
- Account fees -- Whether you open an investment or checking account, you will pay a fixed price.
- Credit card fees -- Most banks charge an annual renewal fee for credit or debit cards.
- Penalty -- When your account is below the minimum balance, they will deduct a fixed amount each month.
- Application fees -- When you apply for a loan, they will charge a certain percentage as a service fee.
There are several other charges that the bank will slap on a client, and although they might seem small, the compound total can reach billions each year. For instance, in 2015, the country’s biggest banks earned $6 billion from overdraft and ATM fees alone. An overdraft refers to the transaction when you try to withdraw money that exceeds your available balance.
How to save money on bank fees
1. Try online banking -- When you transact online, you avoid paying for the paper statement that they print. When you do online banking, you will select either an electronic report or a hard copy. You may pay for the service of the bank sending over the statement to you through the mail.
2. Ask for bundled products -- Bundling is a service not offered by all banks. The concept is to combine two or more services to provide a higher value to customers. They will end up paying a single fee instead of individual charges from separate services.
3. Find a bank with fewer fees -- There are multiple types of banks--commercial, investment, retail, cooperative, and union banks. They have specific niches, although the products and services may overlap. Nevertheless, you should perform your due diligence and find the one with the lowest bank fees.
4. Use AI -- Advances in machine-learning have permeated across different sectors and industries. You can take advantage of artificial intelligence through apps that will do the heavy lifting for you. For example, the app will connect with your account and find ways on how you can waive off some of the fees. It will also automatically negotiate with your bank, particularly on the transaction fees.
If you have been with your bank for a long time, you have an elbow room to bargain. It means that you can ask the bank to waive some charges for continued patronage. What most people do not understand is that loyalty goes a long way. However, even if you are a new depositor, you can still use the app to help you save on the cost of managing your account.