There ain’t anything in life that is free. Nowhere is the truer than with Personal Bank Accounts. Whenever you move money through bank accounts the bank will peel just a little bit of it off of the amount moved. It doesn’t seem like much at the time. However you need to examine bank account costs in 3 ways so that you understand the importance of managing your personal bank accounts diligently.
First is how much do all of your bank costs add up to in a month? Sometimes that cost gets surprisingly high in dollar value. Teenagers managing their first paychecks through their first banking accounts can spend $30 to $50 a month on banking fees and only flow $300 to $500 a month through the account. That’s 10% of every dollar that moves through that account goes to the bank in fees. In the third case, if you really mismanage that account you can spend more than is in that account and end up with insufficient funds and a significant charge for that. If you do this 2 or 3 times in a month or for 2 or 3 items in a month you can end up spending 25% to 40% of your monthly cash flow on bank charges.
The first step in preventing bank charges is to know what the bank charges you for. Yes I know they charge you for everything but what exactly is everything. Let’s take a look. Your banking fees may be different but here is a sample from one bank. All costs are estimated.
- $2.50 for Interim statements
- $.75 to $1.50 for Statement updates @ ATM
- $5.00 to $15.00 for Certificate of account balance
- $3.00 for Overdraft protection…or overdraft interest if that is more
- $5.00 plus debit fee and overdraft interest for Overdraft item handling
- $40.00 each for Non-sufficient funds
- $10 to $25 for check certification
- $3.00 each for recurring funds transfers between accounts
- $1.50 each for Email money transfer
- $6.50 for Money orders or bank drafts
- $10.00 for a stop payment
- $1.50 per sheet of 3 for over the counter checks
- $15.00 for each and any checks written in other currency than that of the account
- $15.00 for closing account within 16-90 days of opening it
- $20.00 for account transfer to another financial institution
- $20.00 per year for inactive account
- $40.00 for a dormant fee on account dormant for 9 years
- $7.00 for items returned unpaid
- $30 to $150 for collections
You get the gist by now. If it moves through the bank they charge you for it. This list only covers the first 2 pages of 4 pages of fees. The last 2 pages consist of a whole host of fees. They start at $1.50 per view for an on line view of a transaction less than 90 days old to $40.00 per hour (yes per hour) for them to search for multiple records, vouchers, names and/or accounts. There are a variety of travelers’ checks charges and charges for handling non-client checks and wire payments.
If you think personal bank accounts are simple and cheap it will only be that way if you make it that way. You can either keep your banking simple. If it is just a little complicated you can always find the services that you use bundled into one product with a price that is cheaper than the services charged per item.
