Over the years I have spent too much money on banking fees. It’s a killer way to waste money, and every time you have a handle on it, the fees change. When I save money, it’s because I’ve spent time. I’ve got to tell you though, the process of saving money has a rewarding feeling of having gone 12 rounds in the ring and coming out the battered, but victorious, pugilist.

I’ve learned that the first thing you have to do is manage that monthly fee.

  • Most banks offer a refund of the monthly fees if your balance remains over a certain amount. Think of it this way, if you invested 4k elsewhere, would you receive $20/month in interest? If the answer is no, then leave the balance in the account to get your monthly fees refunded.
  • Second, reduce your plan if you can. Do you really need so many monthly transactions? Use a credit card (no per transaction fee) and then pay it off monthly. That’s one transaction instead of how many?

I have also learned not to be tied to one bank. Many banks have their specialty, or service that they offer at a better rate than others, and then get you on fees for other services. I now use a combination of banks, including a virtual bank to make check deposits and bill payments free of charge, with no monthly fee. If a service seems expensive, don’t be afraid to look into what competing banks are offering. That being said, be careful not to open too many accounts with monthly fees.

Sometimes it is beneficial to open more than one account simply for accounting purposes. For example, you process credit card transactions regularly and deposits are made daily. Then, your processor deducts its fees daily for its service. This can produce many transactions with not much detail on your bank statement, and may become an accounting nightmare deciphering it all. In this case, the additional monthly fees of having a secondary account can be worth it. After all, what cost more, your monthly fee, or a couple of hours of your accountant’s time?

Be careful of large service packages. Many packages offer an abundance of services included, but how many of those services do you actually need. Were you looking for those services, or do they simply sound good in a package? Don’t be afraid to take only what you really need. Don’t worry, you can always change your package. A bank will always gladly take your money when you are ready to spend it.

I was once accused of not being loyal, yet when I asked my bank to match, not better, a mortgage rate a competitor offered me, they refused. The conversation then deteriorated into who should be loyal to whom.

Moral of the story: Banks are business institutions, don’t mistake their friendliness for friendship. They are in it for the money, understandably so, and so should you!