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Savings Quick Tips: Don't Pay Anyone to Hold Your Money

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Where competition thrives, consumers win. The banking industry has more competition than ever with the introduction of online banks. So, you don't have to put up with overpaying for checking and savings accounts.

The main idea is to remember that you're giving them the privilege of holding your money, so it's up to the bank to sell itself to you.

Still, banks today are nickel-and-diming their customers with ever-increasing fees. The average ATM fee is $1.64, with 98.3 percent of all banks charging such a fee, according to a survey by Bankrate.com. The table below shows how ATM fees have risen. If you want interest on your checking account, you might have to shell out an average of about $11 per month and maintain a balance of $615, on average. The average bounced check fee is more than $27.

ATM Fees Rising
Year Fee
1998 $0.89
1999 $1.12
2000 $1.33
2001 $1.36
2002 $1.38
2003 $1.40
2004 $1.37
2005 $1.54
2006 $1.64
Source: Bankrate.com

All those fees could easily devour any meager interest you earn on checking and savings accounts. They could essentially force you to pay the bank for using your own money, a losing proposition.

Here are tips to avoid unnecessary bank fees:

  • Shop around. You want a bank account that fits your needs and doesn't charge fees. For example, if you work in a job that pays in tips, you may need unlimited access to tellers to sort through your deposits of bills and coins. But if you do your banking online and at ATMs, investigate what perks a bank will give you for forgoing teller visits, an expensive service for banks to provide.
  • Find free checking. There are enough competing banks that you should insist on free checking, with unlimited check writing, no minimum balances, and no monthly service fees, whether a flat fee or based on the number of checks you write. Even better is an interest-bearing checking account. But if you keep getting zapped with low-balance fees, shift money into a free checking account. The scant interest the accounts pay isn't worth even a few low-balance penalties.
  • Order your own checks. Of course, free checking isn't free because you have to buy the checks. But you don't have to buy them from your bank for up to $25 per box. Other companies will print checks at a fraction of the price, often $6 to $8 for a box of 200 checks. They work just as well. Check out deals from Wal-Mart, www.walmartchecks.com, for example. For more choices in background designs, search the Internet for "check printing" and find such sites as www.checksinthemail.com, www.checkworks.com, and www.checksunlimited.com.


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    From Living Rich by Spending Smart Copyright © 2008, FT Press. Used by permission of FT Press, and Pearson Education. All rights reserved.

    To order this book go to Amazon.


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