How to Save Money by Avoiding Bank Fees

by Sahirenys Pierce

One of the quickest ways to spend unnecessary money is on bank fees. Yes, I’m talking about bank maintenance fees, overdraft fees, ATM fees, ugh should I even go on. I want to share the top tips I have to avoid bank fees and save some money. Because who wants to get charged fees just to have an account? Instead, I rather avoid these fees and save or donate the money to someone in need.

I know, I know $15 here and $10 there might not seem like a lot of money to some people. But that adds up quickly when you have multiple accounts or don’t hit their minimum requirements. These harsh bank fees affect the minority community who make less than the national median income the most. The two most common bank fees are overdraft fees and maintenance fees. These are two of the hardest fees for anyone to avoid, especially if you’re living paycheck-to-paycheck.

The Hidden Problem with Bank Fees

When I was younger I worked at a Payday Loan entity in San Diego, CA. I saw a lot of hard-working people struggle with paying their bills and dealing with high bank fees. These customers came in each month to get payday loans to make ends meet and pay back their loans. When conversating with them, I noticed a few similarities related to their banking. One, a lot of these people were trying to avoid or pay bank fees with the loans they took out. Second, they couldn’t pay their bills in full due to insufficient funds due to fees. Lastly, they had no savings due to overly using overdraft protection. 

A lot of these customers were putting themselves deeper in the hole by taking payday loans to make ends meet. Let’s be honest, when your not making enough money it is hard to avoid bank fees. I’ve had my fair share of bank fees that I just couldn’t get away from. It wasn’t until I started really researching how to avoid bank fees that I realized that banks know what they’re doing. If it wasn’t the minimum account balance it was minimum transactions that got me. They know how to turn you into just another statistic in their account book.

How to Avoid Bank Fees:

I didn’t want to be another statistic falling victim to bank fees anymore and you don’t have to be either.

This is when I started catching on to these bank’s fee games and decided to stop playing. I didn’t want to be another statistic falling victim to bank fees anymore and you don’t have to be either. Here are my top tips to avoid bank fees and to start saving your money with purpose.

Set up Direct Deposit

One of the easiest ways to avoid checking account bank fees is to set up a direct deposit for your paycheck. Direct deposit is when the funds of your paycheck are electronically transferred to your bank. This process makes payday a breeze without having to deal with physical checks or having to go to a bank. But one of the best reasons outside of saving time and money is that you’re able to receive and access your funds earlier, which is amazing.

I know you might be wondering why the direct deposit is the top way to avoid bank fees? The main reason is that the banks want to know that money is coming in routinely and often. Now what a lot of people don’t know is that you split up your direct deposit. Yes, most companies allow this if you update your direct deposit slip at work. This is a great way to easily avoid bank fees to fund your bank accounts within the High-5 Banking Method.

Consider Online-Only Banks

One of the best-hidden gems within the banking industry is the online-only banks. These banks do not have a physical brick and mortar location but do offer a full online customer service banking experience. They are FDIC insured like our popularly known big banks and offer many of the same services but with low to no fees and no minimum deposits. Online banks also offer higher yield interest rates on a lot of their products like High-Yield Savings Accounts and CDs. They’re able to offer these greater benefits because they don’t have to deal with the overhead costs of a physical location and are able to pass the savings to us instead.

Before switching to an online-only bank I would recommend listing out the pros and cons of your current bank and seeing your banking needs. For us, switching to an online bank that allowed us more flexibility and no hidden bank fees was the game-changer. Online banks are a great solution for a lot of us who don’t visit a bank like that. But if you do visit banks and need something physical, then a local community or credit union bank. I would also suggest searching for the best online bank for your situation by doing your research into real customer reviews. This is what I did and I am so happy I included online-only banks into my finances.

Know your ATM Network

A big conversation around online banks and credit unions are physical availability and access to cash. Most big banks offer nationwide branches and ATMs. Now how do you get cash if you’re using an online bank? You actually have more options than you may think. A lot of these banks offer a network of ATMs that allow you to pull cash without incurring a fee or receive a fee reimbursement. These ATM locations can be quickly found on their website or on their app under the ATM Locator.  

Another way to get cash is through the cashback option when shopping at Target or even the grocery store. Just remember to press yes to cashback if you actually need it. I sometimes forget about this option when I actually need cash. This is actually the easiest way to avoid bank fees and get cash during your everyday routine. But like a lot of you guys “millennials”, I don’t have a real need for cash. If my sister and I owe each other money we just use an app like Zelle or Venmo. 

Set up Bank Alerts

The best bank alert you can have is to spending with purpose and check your bank accounts every day. 

The best way to keep track of your finances is to set up bank alerts to make sure you don’t overspend or hit a low balance. A lot of people rely on overdraft protection as a bank alert to stay out of hitting overdraft fees. In theory, is great to avoid fees, but what it doesn’t protect you from in a zero balance savings account. It also doesn’t protect you from spending the money on your goals over bad financial habits of overspending. The best bank alert you can have is to spending with purpose and check your bank accounts every day. 

Another level of protection is to make sure you have email and text message alerts from your bank. Suspicious transactions and identity theft are still real and can happen to anyone. I’ve been hit with suspected fraudulent transactions and that affected my checking and saving accounts. It was good that the accounts were frozen to protect my money. But it would have also been embarrassing if I swiped my card and didn’t know why my card got declined. That’s why I always recommend to get the bank alerts and check your bank account every day.

What to do with the saved money?

Let’s say you’re able to save $200- $500 on bank fees. That’s great, but now what? A lot of us take the savings and don’t know where those savings have even disappeared to. It becomes lost money and that’s no fun. Instead, make sure that you take that old bank fee and create a purpose for it. One thing we do is add the saved bank fee into our Christmas fund within our Short-Term Goals Savings Account. This way we can take full advantage of the fee we once used to give to the bank. 

Another option is to add it to your giving/donation spot within your budget. A lot of us want to give more and help those less fortunate, even if its a little bit. This small bank fee could be re-purposed into a monthly donation to give to a homeless person or a charity you love. 

One of the charities we try to give to whenever we can is the Ronald McDonald House. When my son was recovering from his heart surgery, my husband and I stayed at the Ronald McDonald House. The blessing this place was for us is unspeakable. This place does so much for the families struggling with a sick child at Children’s Hospital. From the therapy for the parents to the donated food, this place is just an incredible blessing for many families.

Closing Thoughts: 

Instead, give your saved bank fees a purpose.

Using your saved bank fees for good is one of the best things you can do instead of owing money to a bank. Instead, give your saved bank fees a purpose. Do this by taking the time to plan where your savings are going to go and make sure you don’t wast it on new fees.

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