Money habits:healthy tip # 6 – 17 everyday tips for saving on bank fees

For many savers, using ordinary bank accounts is a convenient, low cost way of building up financial assets. Banks charge fees but, for smaller savers, they are likely to be less than the fees charged on other savings and investment products.

Here are some ways to save on the fees your bank charges and change habits so you can save more. You may want to print these so that you can discuss them with your bank.

1. Find out about ‘fee free’ or ‘reduced fee’ accounts 

Ask your bank if they offer ‘fee free’ or ‘reduced fee’ accounts for certain customer groups. For example, you may be eligible if you receive superannuation, you’re aged 18 and under, or you’re a student or a recent graduate.

2. Get the right account

Ask your bank which account is best for you. Tell them how you like to bank (for example, full service or just electronic deposits and withdrawals) and make sure they provide an account that matches your needs. If you don’t think you’ll use a cheque-book very often then consider an account without one – they often cost less. If you have a lot of transactions each month, consider an account that charges a flat fee and no individual transaction fees.

3. Close unused accounts

Close any accounts you no longer need. [This also applies to credit cards or store cards that you know longer use.]

4. Know what fees are charged

Find out what fees you get charged on your bank account. You may be able to avoid or keep some fees to a minimum. Transactions at the branch usually cost more than online and telephone banking or using EFTPOS and ATMs.

5. Negotiate the fees

Ask your bank whether it’s willing to reduce or waive any of the fees you pay. If you’ve got other business or a mortgage with the bank, you may qualify for discounts or the bank may be prepared to negotiate to keep your custom. [This is another example of my motto in play, “If you don’t ask, you don’t get”. This could be a good time for you to change habits and try asking for a fee reduction.]

6. Pay off credit with direct debit

 Set up a direct debit to pay off your credit card. That way, you pay your card off in full each month and avoid high interest on unpaid balances.

7. Save on transfers

If you have more than one account, ask your bank if they can deposit your salary into multiple accounts (for example, some into your everyday account and some into your savings account) so you avoid the cost of transferring money between accounts.

8. Avoid dishonour fees

Make sure you have sufficient funds in your account to cover any upcoming payments so that you avoid overdrawn, dishonour or failed payment fees.

9. Consider an overdraft facility

If you regularly go into overdraft, set up an overdraft facility. It’ll be cheaper than paying daily dishonour fees. [This should be a short term option only. You need to look at what is causing you to go into overdraft in the first place so you can change habits.]

10. Consider an online savings account

If you’ve got a savings account, use an online account if you can – these often have no fees and the highest rate of interest.

11.Consider term deposits

If you don’t need access to your savings for a while, consider a term deposit. These usually offer a higher rate of interest and are ‘fee free’ if you do not make any withdrawals during the term of the investment.

12. Get paid to your home loan account

You may be able to set up a revolving credit account so that your income goes into your home loan account. Providing you stick to a budget, you could pay off your loan more quickly. [You need to fully understand this concept before using it. You also need to be very disciplined and avoid the trap of drawing on any money you have paid in.]

13. Find out how interest is paid

If you’ve got a high credit balance, find out whether interest is credited on the daily balance or the minimum monthly balance and how often it’s paid. You’re likely to earn more interest if it’s credited on the daily balance; you’ll also be better off if the interest is credited monthly rather than quarterly or annually.

14. Use ATMs with low or no fees

Find out which banks charge the lowest or no fees when you withdraw cash from their ATMs and make sure you only use those ones.

15. Get cash when buying with EFTPOS

Get cash out when making EFTPOS purchases and you won’t have to pay an extra withdrawal fee.

16. Don’t get cash from credit

Don’t withdraw cash from your credit card – banks charge high fees for doing so.

17. Bank online

Try doing as much of your banking online – it’s often free or cheaper.

These tips are bought to you courtesy of www.sorted.org.nz. My comments are in brackets.