Saturday, September 4, 2010
Banking on your savings...
You may have noticed that as interest rates have dropped the fees that banks charge has gone up, and free checking is now a thing of the past. Its important now to be up to date on the fees your bank is charging and some of the ways you may be able to avoid getting nickled and dimed to death.
For today lets just stick with the basic checking account, things that used to be free in the not to distant past included no minimum balance, interest on your balance, a paper statement, free ATM usage and free checks. Starting this summer with the new fees all that's going to chance. I am going to compare the two largest banks in our area, US Bank and Wells Fargo. First lets look at what has happened to your $100 checking account balance with US Bank Regular checking account (these fees are varied by state):
Opening balance = $100.00
$12.00 monthly maintenance fee which you can avoid only if your account stays above $750.00
$3 each statement cycle to return canceled checks with your statement
Just these two fees alone mean that if you left your $100 in the bank for just a little over 6 month you would have a zero balance.
Now lets assume you actually use your account, if you need to reorder any checks their site doesn't offer any free ones and the cost varies depending on what type of checks you need, but no need to worry if you run out before they get to you, US Bank will give you 6 checks and 2 deposits slips for $3.00. There is no fee for using a US Bank ATM but if you stray out of their network the fee will be $2.00 for each transaction, if you do this outside the US the fee rises to $5.00 per transaction. The fee to stop payment on a check has increased to a whopping $30.00, making it a better deal to let $20.00 check clear for the item you never received off of eBay (this is a scam artists dream). Oh and one more little thing, just because its your money don't assume you can have it whenever you want it, there is an Excess Withdrawal fee of $3.00 for each withdrawal/transfer during the statement cycle above the three. This fee applies to withdrawals and transfers at ATMs, teller lines, by telephone or by any other electronic means. Have a nice day....
On to Wells Fargo:
Opening balance $100.00
$5.00 monthly maintenance fee which you can avoid only if you maintain a $1,500 average daily
There is no fee for getting a monthly statement mailed to you if you do not need copies of the checks, if you would like copies of your checks front and back then it is $1.00 per month for the classic 10 per page.
Again lets assume you don't forget about your account and want to actually use it, as with US Bank you can reorder checks but the fee varies by type of check and account that you have, again, if you forget to order early Wells Fargo will provide you with temporary check, just at a little bit more cost than US Bank, you get a sheet of 3 blank checks for $3.00 and no deposit slips. Currently there appears to be no fees to use a Wells Fargo ATM, but again if you use another network your looking at an average fee of $2.50 in the US and $5.00 internationally. I was unable to find the current fee for a stop payment on a check, but back in 2005 it was $29.00, my guess it the price hasn't gone down.
In general Wells Fargo is a little bit better on price than US Bank, but fees aside I do not personally bank with either one of these banks. As a general rule I have found much better customer service and lower fees with either a local bank or a Credit Union. I believe one of the reasons is just plain size, with any bank as big as these two customers just become a statistic and on an individual scale matter much less. They are more apt to look at what is best for the bank and will make them money. Case and point, a federal judge just ordered Wells Fargo to pay California customers $203 million in restitution for claims that it had manipulated transactions to maximize the overdraft fees it charged. Instead of putting the transactions through in the order they received them they were putting them through with the largest denominations first because if it put someones account in overdrawn status then they could charge per check any other amounts that went through. Very lucrative for the bank since they received $1.8 billion in overdraft fees in just the state of California. You can see the whole article in the New York Times.
The bottom line is to make sure you read all those little pieces of paper that come to you from the bank, whether they are in your statement or mail separately or sent via email, they all have information that may potentially affect your nest egg. If its time to start looking for a new bank or credit union take a peek at the web site Find a Better Bank, you can put in the information for your area and what you are specifically looking for and that will get you headed in the right direction.
Hope you are all having a great start to the long weekend!