Fees and service charges: Is your bank bleeding you dry?

By Jill McKenzie

May 18, 2017 12:00 AM

Not everyone who reads this is going to bother to find a bank statement or log in to their account to double check what they are paying in bank fees.
Unfortunately, many people look at service charges and fees as a fact of life, an annoyance, and refuse to make an effort to eliminate these phantom expenses that slowly drain away your accounts.
The fact is, you should be able to bank for free.
In many cases, minor effort on your part would ensure that you could. And even if you can’t bank for free, perhaps you can find ways to save on banking that will boost your bottom line and make a difference over time.
Examine different plans and options
What fees does your bank charge you?
Has your life changed significantly since you selected the plan that you use? For instance, if you pay a high monthly fee so that you can use any bank’s ATM, are you actually using different ATMs often enough to make that a cost-effective option?
Or could you reduce that plan and only use your own bank’s ATM for free?
If this strategy could take you from $20/month down to $4/month, that is a savings of $192/year.
Likewise, if you are regularly into your overdraft, accept the fact and find an option that costs less.
Some accounts charge a monthly fee for overdraft protection whether you use it or not.
Others charge you on a per use basis, while still others do not charge extra if your account rises above zero at least once every month.
If you find yourself needing an overdraft, finding a sensible option might save you enough money over time that you no longer find yourself in the red every month.
Minimum balance, minimum fees
Are you aware keeping a minimum balance in your account often eliminates the fees that your bank charges?
Do you know what that magical number is?
If you find it hard to maintain a minimum balance and notice you are often being charged the fees, find an account with a lower minimum balance.
Or, if you like the prospect of never being charged a fee, maybe an online bank is right for you.
Although many of us like the thought of having a bricks and mortar bank to visit and a real teller to serve our needs, online banks are gaining popularity with lower fees and more flexible options.
Online banks: the way of the future?
It’s comforting to know where your money is.
But even if you deal with one of the major banks or a huge credit union, you are still only a number to them.
The difference between an online bank and a traditional one is, increasingly, the fees that you are charged and the manner in which customer service is provided.
Have you tried to phone a major bank lately? It’s not unlikely that, for people who do email, it’s actually easier and faster to reach someone via online chat or email message than waiting in queue on the phone or never being called back by the associate you’ve been trying to reach.
In every Internet search conducted for the writing of this column, two online banking options jumped to the fore.
I’m not associated with either, and people should take the time to do their own research and determine what’s right for them. But both President’s Choice Financial and Tangerine have interesting options available for those willing to try a new approach to banking.
These online banks offer accounts that charge zero fees, with no minimum balance required, and are associated with established big banks so that you can access ATMs in your community.
With the President’s Choice option, you also receive PC points when you use your account.
These points can then be used to buy groceries.
When you consider your regular bank does the opposite—charging you a monthly fee and possibly extra for each transaction—this should make discerning savers take notice.
You can also use PC or CIBC ATMs without charge to access your money.
Similarly, the online bank Tangerine is owned by Scotiabank and used to be known as ING Direct Canada.
It offers no fee chequing and savings accounts as well as a number of other options.
The point is not to sell you on a particular type of bank account, but rather to encourage you to look at your statements and see what you are being charged by banks that do little to accommodate your situation.
There are other plans and options out there.
Prioritize saving on fees and keeping that cash in your own account, rather than the bank’s, no matter where you choose to keep your money.

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