We talk a lot about ways to save money at Financial Finesse. One of the easiest ways to do that is to avoid paying bank fees. After all, it doesn’t require you to give up your morning Starbucks or bring lunch to work. All you have to do is a little paperwork. Here are some options to consider:
Reward Checking Accounts
You can find the best deals by looking for “reward checking accounts” on sites like DepositAccounts.com. In addition to being free, some pay as much as 5% interest (up to a certain dollar value) and many reimburse ATM fees if you meet certain requirements like receiving electronic statements, using direct deposit, logging onto your account periodically, and making a minimum number of debit card transactions each month. Even if you miss the requirements, there’s generally no fee.
So what are the downsides? The best-paying ones tend to be small credit unions that may not be local to you so you might have to be willing to bank remotely. In order to join the credit union, you may need to work for a certain employer, live in a particular area, or pay a one-time nominal fee of about $5 or $10. Finally, don’t forget that you have to jump through some hoops to get the most rewards.
A lot of investment brokerage firms are now offering FDIC-insured free checking accounts. Many also reimburse ATM fees. If you have a brokerage account, this provides the convenience of one-stop shopping for both your banking and investment needs. Some like Charles Schwab, Fidelity, TD Ameritrade, and Scottrade have branch offices if you want in-person customer service. The main downsides are that you can’t deposit cash and they don’t pay as much as the top rewards checking accounts above.
Many online-only banks use their savings from not having branch offices to provide benefits like free checking accounts. They also tend to pay above-average interest rates and once again, many reimburse ATM fees. Since this is their specialty, their web sites can be more attractive and user-friendly than more traditional credit unions and brokerage firms. Of course, the downside is that you have to do all your banking online, through the mail, and over the phone. If you’re okay with that, you can search for them here.
With all of these options, the only reason to be paying bank fees is not wanting to make the effort of switching accounts. I know it can be a hassle. But what can be more annoying than seeing those fees come out of your account just to use your own money?