You can Avoid Checking Fees and Even Make Money on Your Checking

While the big banks have dropped the idea of charging monthly fees for using your own debit card, there are still some nasty charges out there for checking account customers.
To compete with the big boys, many smaller banks around the country are not only skipping the fees, they’re offering substantial dividends. Are there any catches in order to access this largess? You bet. But if the requirements to access these returns are within – or close to – your normal banking behavior, it’s no big whoop.
Let me give you an example. In California, where I live, Community West Bank is offering a 2.53 percent yield on up to $15,000. The requirements? Each month you:
• Must complete 10 debit card transactions;
• Have a direct deposit or automatic debit transaction;
• Receive an electronic statement
• Access online banking.

At Bank of the Sierra, the qualifications to earn 2.09 percent on up to 25 grand are:
• Minimum 12 Sierra Check Card purchases per qualification period
• Minimum one direct deposit or automatic payment from your account per qualification period;
• Make at least one payment using Sierra BillPay per qualification period;
• Enroll and receive electronic statements.

Financial institutions in almost every state have similar deals, some with rates above four and five percent.
In a recent survey by Bankrate.com, just 45 percent of the banks in the 25 largest markets are offering free checking. In 2009 76 percent of these banks offered free checking.
To qualify for the high interest rates, you typically must be a resident of the state where the bank operates. And they all have restrictions similar to the ones above.
You can find banks in your state at the web site www.depositaccounts.com, run by Ken Tumin.
Credit unions sometimes offer competitively high rates as well, and, like banks, they have account insurance. If you tend to keep only relatively small amounts in your checking account, as I do, then I favor credit unions. And since I don’t use a debit card because it’s like carrying cash in your wallet if anyone obtains your PIN, I favor credit unions. But if you do a lot of debit card purchasing, the high-rate checking accounts may be just right for you.
The Consumer Gal and I make most purchases with a credit card and earn two percent back on those transactions. We pay off the entire balance each month. That’s the only way credit cards work to your advantage.
If you are looking for a credit union in your area, check out the web site above or www.creditunion.coop.
Happy holidays. And remember:
Whoever holds the money has the power.

 

YOU CAN BANK ON BANKS BANKING ON YOUR FEES – or, how to get more bank for your buck

 

           Until a few years ago I was a Washington Mutual Bank customer. The branch was close to my house and there were no fees for the services I used, with the exception of a safe deposit box. (No, it’s not a “safety” deposit box. It’s a box in a safe.) When the banking scandal hit in 2008 Wamu went bye-bye. Seems it was in the illegitimate mortgage business that eventually bit it on the ass.

            That’s when JP Morgan Chase got into the picture and picked up Wamu’s business for a song (I think the song was George Harrison’s “Here Comes the Sun”). So my Wamu branch became a Chase branch.

            Then three things happened. I became uncomfortable with all the money Chase got as part of the federal bailout. Then Chase had a few more scandals. And as I waivered as to whether I should take my money and run because of ethical considerations, Chase announced its new fee schedule.

            Hasta la vista baby. I moved my money, primarily deposited in a checking account, across the mall parking lot to a credit union. And I’m glad I did. As if the big banks aren’t making enough, they’ve come up with some pretty sneaky fees. According to USPIRG and California PIRG (PIRG is the acronym for Public Interest Research Group) here are some fees and how you can avoid them.

            Some banks will allow you to withdraw more money from your automatic teller machine (ATM – that’s why it’s bad English to say “ATM machine”; “machine” is already in there; if you say “ATM machine,” I will report you to the FBI of investigation) than you have in your account. Then you get hit with an overdraft fee.

Solution: Check your balance to make sure you are not withdrawing more money than you have in the account.

            Many financial institutions are now charging several bucks for non-customers to use the banks’ ATMs to make withdrawals from the user’s bank. On top of that, the user’s bank may charge a fee as well. You could end up paying five dollars or more in fees for a 20-buck withdrawal.

Solution: Use only your own bank’s ATMs or become a credit union customer and use an ATM that’s a member of its affiliated network. Some groceries will allow you debit additional cash as well, when you make a purchase .

            Here’s a swift one, and to me it’s just a rip-off. Let’s say you inadvertently write several checks in a short period for which you have inadequate funds in your checking account. What many banks do is deduct the largest check amounts first from your account. This causes the most checks possible to bounce. At the usual $29 to $39 returned check fees, plus the potential penalties levied by the offended merchants, you are getting – as they say in the financial industry – screwed big time.

Solution: Keep track of how much money is in your account. That’s why there’s a register in your checkbook. And don’t forget debit card expenditures. If you’re not sure of how much is in there, check with your bank. It’s a good idea to use a check book that makes carbon copies of checks as you write them. I wonder if that’s last situation left where we make carbon copies.

Some banks are now even charging five to 10 smackers if you deposit a check you received from someone else and that check bounces.

Solution: Don’t accept checks from someone you don’t know to be trustworthy.

            There are banks and credit unions that charge fees for not having a set minimum in your account unless you use direct deposit from your employer. Others charge dormancy fees for not actively using your account

Solution: Find a financial institution (I think that term is so pompous; institution?) that doesn’t levy those fees.

Here’s a cynical one. Fortunately for Californians, it’s a no-no in that state: You buy a gift card at a bank. After a set minimum period the bank charges non-use fees of two to three dollars a month.

Solution: Move to California. Or, if that’s too drastic, buy gift cards from retailers that don’t attach such fees to their cards.

            If your bank charges a fee for your talking to a teller or a telephone representative (or even an automated telephone system!), ask yourself: “Why am I doing business with people who charge me to check on the money I am, in essence, lending to them?”

Solution: If this situation isn’t enough to motivate you to look elsewhere for a bank, at least ask the leaches how many free teller visits or calls you are allowed each month. If you call or visit to correct a bank error, be sure that you are not charged a fee.

            Since I don’t use – or even have – a debit card, I was not aware of this one. If you choose to use your personal identification number (PIN – see grammar lesson for ATM at the top of this article) instead of signing for a debit card transaction at a merchant,, your bank may charge 25¢ to $1.50 for each transaction. Really?

Solution: If your bank imposes such a fee, use your credit card instead of a debit card, providing, that is, you’re not carrying a balance on your credit card account. You don’t want to add to the balance for which you are already paying interest. Otherwise pay cash or by check. Or find another bank that appreciates your business. By the way, I don’t carry a debit card because a debit card is like cash. If you lose your wallet or purse, you could be in for a heap of hurt.

            In conclusion: Know your bank’s policies and fees. When you get those occasional notices that describe changes in bank policy, take a few minutes to read them. They may be significant enough to prompt you to change financial institutions. And keep in mind, the big bank bailout that cost the American taxpayer so much did not involve credit unions.