August 2011

What's Eating Away at Your Bank Account?
Three Ways to Avoid Monthly Fees

Checking Account
If you are like many bank customers who are accustomed to free checking accounts, you may have noticed something different about your monthly statement lately. As free checking is increasingly harder to come by and monthly maintenance fees become a common feature of standard checking accounts, it is more important than ever before to carefully manage your accounts in order to avoid racking up fees.

With regular monthly fees for maintaining a checking account ranging from $3 to as much as $50, your wallet can take a big hit; especially if you’re not paying close attention to your balance and end up spending money you do not have. The good news is with minimal effort there are ways to curtail or avoid fees altogether by following a few simple steps.

Pay careful attention to your mail and statements. Banks will notify you of any changes to your accounts, so read through all correspondence and make an effort to understand any requirements for avoiding fees. Everyone, especially those with modest balances, should note the new fees they are being charged and be sure to subtract that from the account balance to avoid the risk of being charged additional overdraft fees.

Consider the alternatives. While some fees can be waived when certain criteria are met, that is not always a realistic option if you don’t have the extra resources to maintain a minimum balance or can’t arrange for direct deposit of regular paychecks, two common conditions for waiving fees. Instead, you might be able to switch to a different type of account, such as one that limits the number of checks you can write each month, or an electronic bank account that features paperless statements and requires you to make deposits and withdrawals online or through an ATM, rather than in person at a bank branch.

When all else fails, shop around. While monthly maintenance fees are becoming the norm, about 65 percent of financial institutions still offer free checking, according to a recent survey by Bankrate.com. It pays to shop around for the best deal since many credit unions as well as small community banks and online-only banks offer free checking with no restrictions. Free checking is still widely available for students and retirees, so if you fall into that category make sure to inquire at your bank.

As with anything involving your finances, it pays to take an active role and keep abreast of all the latest changes to your accounts. Staying informed will help you keep more of your money in your pocket.