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Checking Account Fees

Checking account fees are definitely not all bad. It is when you are going about your life and you are hit with them unexpectedly that it can throw a wrench in your financial plans. Instead, weigh your various checking account options before deciding upon one bank product over another. There are many cases in which you will have to pay fees just to maintain a banking relationship. The key is to avoid the unexpected fees, though.

When you are weighing banking products that will involve checking, consider a few habits of your own first. You may never actually write any payments from your checking account, but you may bank online frequently, or make many stops at the ATM for cash. There are checking account products that suit every style of banking. It is up to you to determine how you want to be able to bank without incurring fees. Start out by getting checking account information to compare rates, fees, and the various transaction limits (check writing ceilings, ATM withdrawal maximums, and branch teller limits).

Good Starting Points

A good starting point is to start by thinking about your present checking account. If there is anything that has caused you to incur great fees, note that. These are the areas that you need to improve upon with your next checking account. Rather than try to constantly fight the occurrence of checking account fees, find a system that works for you and with you.

Start out by examining the list of banks and their corresponding limits, and of course checking account fees. Now you can start going through the different options that are available to you and compare what you need to what is offered by the various banks. There are main categories for which most banks will provide their parameters and transaction limits. They may each provide ATM transaction limits, or may allow one or two ATM withdrawals at competing banks without incurring fees. If you work odd hours and live somewhat far from your branch, and are accustomed to making weekly ATM withdrawals to help you best curb your spending to stay within your budget, you will need to be able to make roughly four to five withdrawals per month.

Evaluate True Cost of Ownership

Opening up a new account is like assuming ownership. It is basically in your care, and it is important that you evaluate the true cost of ownership. Many people, for instance, can avoid the cost of monthly checking account fees by having direct deposit. If you are not one of those fortunate people, you may have to keep a good deal of money parked with your bank to avoid monthly checking account fees. Otherwise, weigh the actual monthly cash that you will have to pay to have the privilege of banking with one institution over another. If your estimated checking account fees for using one product would far outweigh just paying twelve dollars per month, then unfortunately you may have to pay twelve dollars per month.

The idea, though, is to shop around for the lowest checking account fees that you can find in exchange for the services you need. While one banking institution may charge twelve dollars, another may only charge five or three dollars. If you decide to attach a savings product you can often times cut down or negate checking account fees to use your bank every month. You will find that there are quite a few variations on this one theme of attaching a savings vehicle.

In some instances, you pay extra if you overdraft and have to dip into your savings to make a payment. Other banks will charge an interest rate on the overdraft amount, rather than a set dollar amount. It is important that you determine what will work best for you. For instance, it may be far better for you to pay $12 per month to avoid charges than to pay sixteen percent interest on a monthly mortgage amount one or two times per year. If you are paying $3,000 per month on housing, sixteen percent annual percentage rate can add up quickly.

Once you have established the top three institutions that you would like to use, make sure that you have the proximity you need. If you have just moved, you may need a different bank than you would have used in your old neighborhood. If you travel often, you may also want to consider a bank that has branches located nationally, or wherever you travel the most. There are many factors to consider when you are establishing a new relationship with a bank. Checking account fees are one item that are well worth addressing with a degree of prevention. Rather than incur charges, avoid them all together, wherever possible.