How to save on banking fees – guest post from Bargainmoose!

28 Aug

I’m always looking for savings related guest posts, and here’s a good one from Clare over at Bargainmoose.ca  , the Canadian Shopping Community – Clare writes weekly money saving posts, so make sure to check her out there too! And if anyone is ever interested in writing a guest post feel free to email me with your idea.

Cut your Costs by Lowering your ATM and Banking Fees

ATM fees can really add up.  $1.25 per transaction may seem insignificant, but if you withdraw $40 every few days, this can easily add up to $20 in ATM fees.  This is if you withdraw from your own bank.  If you add on withdrawals from other bank machines, you can easily add an extra $40 on ATM fees alone.

This is on top of the $5.95 to $10.95 that you are paying for your bank to hold your money on a monthly basis.

So essentially, in the extreme case scenario, you may be paying $70 a month in ATM fees if you are a frequent withdrawer.

According to Ehow, ATM machines in the United States (and here in Canada) are big business and can earn the big banks over $2 billion a year (from charging you customer transaction fees alone).

Here are a few tips to avoid spending all your money on ATM fees.

Pick a No-Fee Banking Plan

Many banking plans offer no fee services if you are over the age of 65 or if you are a child, or even if you are a student (graduate students count too!).

If you are not so lucky to fit in the above categories, many banks offer a discount on banking services (which can be equivalent to a free monthly banking plan in most cases) if you keep a minimum amount ($2000 at my bank).  This $2000 not only helps me take away the monthly fee, but it acts as part of my emergency fund.  Essentially, the $2000 is just sitting there, but it serves a purpose by preventing me from having to take out a high interest loan (say from a credit card), but instead only charging me $5.95 or $10.95 if I go under the minimum $2000 per month.

Pick a No-Fee Banking Bank

Alternately, you could pick a no-fee banking bank.  Many banks these days are completely fee free, and include cheques as well.  Some that are no fee are ING Direct, PC Financial, among others.

The only drawback with the no fee banking banks is that their ATM machines may not be as widely available as other larger banks and you may be tempted to withdraw from another banking institution, which will unfortunately negate the benefits of choosing a no-fee banking bank!

Take out a Set Amount- Be Your Own Bank

Finally, acting as your own bank instead of taking $40 out on a regular basis is a good idea to reduce fees.  I only take money out every two weeks when I get my pay cheque and budget my spending to last the two weeks.

In addition, make sure you live or work near your bank branch so that you won’t be tempted to go to another banking institution to withdraw money.  That way you won’t get “dinged”.

Being conscious of ATM fees is an easy way to save money and make sure you spend your money where you want to spend it (instead of giving it to the bank).

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