Bank fees should be the topic of a book. Your job is to avoid all the bank fees, andwatch your savings grow, not the banks.
Understand the terms of no fee checking. Follow the terms to the letter, and avoid checking account fees.
The banks made an estimated $39 billion dollars in fees for overdrafts and insufficient funds per year. The average overdraft fee is $30. If you have multiple overdrafts in one day, your fees can be over $100. Use all options to avoid the overdraft charges – have an overdraft protection. In addition, you can often link a savings account to your checking account. Finally, you may even be able to link your credit card to the checking account (but this is a last option).
My bank has an alert which provides me a warning when the balance gets below a preset amount, set by me. Check if your bank has this alert.
Overdraft Protection (“OD”) is nothing but an expensive credit line, just like a credit card. It is cheaper to use the overdraft protection, than have bounced checks. You need to look at the interest rate on the OD. The rates on OD are typically approximately 18% per year. On a $2,000 line of credit, this adds $360 a year to your budget, similar to 10 bounced checks.
Attorney Robert M. Singer
Law Offices of Robert M. Singer, LLC
2572 Whitney Avenue
Hamden, CT 06518