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How to Reduce Your Checking Account Costs

No matter what your checking needs, I bet you could find ways to reduce your checking account costs today. Almost no one is using the perfect banking services for their particular needs and spending habits. This primer should help you dissect the checking plans banks offer to get to the best possible options.

The U.S. Navy has a time-honored statement: “Keep it simple, stupid.

People shouldn’t make things more complicated than they have to be. The reason you study financial literacy isn’t to make your life more complicated. On the contrary…you learn personal finance skills in order to know the right decisions to make. Once you make the right choices and know for a fact those are best for you and your family, you can get on with the business of your life.

The same goes for opening the right checking and savings accounts for your financial situation. You get the best account and stop worrying about what might have been. The idea is this: get rid of the frills you don’t need, get the cheapest add-on services you can’t live without, and make the most out of your ability to write checks.

Don’t Consider Low-Interest Accounts with High Minimum

Best Checking Account Options

Find the Best Checking Account for You, Then Focus on Other Concerns.

High minimum accounts with low interest payments sound like a bad idea and they are. Negotiable orders of withdrawal or “NOW” accounts often fall into this category.

If you have to put $1,000 or $2,000 minimum in your account to avoid fees, but the advantage is a low interest rate that’s better than most checking accounts, this might be a trap account.

That is, you’re probably better off getting a low minimum balance limit and putting that extra money into a savings account, which is certain to offer better interest. The two might seem similar, but personal finance is about saving money in small ways everywhere. Saving small amounts in many places eventually equal one big lump sum of savings.

Avoid the Minimum Daily Balance

Notice what methods your bank uses to calculate minimum balance fees. If your bank uses the “minimum daily balance method”, drop their service.

This is often used with free checking accounts, but it requires you to maintain a minimum balance every single day. If ever you drop below the minimum for a day, you get a rate hike.

Find the Average Daily Minimum Balance

Instead, find a bank account which determines fees based on the average daily minimum balance. This sets a much more forgiving policy for bank transactions.

Over the course of a month, if your balance stays above the minimum on average, you are charged no fees. You can see how this is a much better policy for you.

Use Banking which Allows Linked Account

If you have a checking and savings account with the same bank, use those institutions which allow you to link accounts to make up the difference.

This way, all you have to do is maintain a minimum in your checking, savings, money market accounts, and certificate of deposits.

Often, you’re required to keep twice as much in one of these accounts as the single-account minimum, so figure out if this is a better deal for you. It usually is for those people with savings accounts and CDs.

Utilize Direct Deposit Paychecks

Many banks waive minimum checking fees and other transaction drawbacks if you sign up for direct depositing from your employer. When you get paid, the whole amount of your paycheck goes directly into your checking account. Since this replenishes your account quickly and regularly, banks like these deposits.

From your perspective, the direct deposit is almost always quicker than waiting for the check to arrive, picking up the check from the office, and depositing it in the bank.

A lot of people write a handful of checks a month. If you’re one of those people, consider getting a lifeline checking account, also known as a no-frills or basic account. It might not be worth your trouble to have a complicated check writing account.

The basic checking account charges you a base fee, but only allows you to write 8-10 checks per month. If you foresee no situation where you’ll need to write that many checks or more, consider getting the low-fee, low-privilege option. Anytime you go over that amount, you pay additional fees. Also, this options often comes with a limited number of ATM transactions. If you do a lot of your banking with the ATM machine, check with your bank before requesting this method of checking.

Avoid “Quick and Easy” Ways to Lose Money

Many personal finance articles are going to tell you want to do when you’ve gotten into debt and the bill collectors are ringing the phone off its hook. A lot of other financial advice pieces give you tips when you want to save for your kid’s college education or how you and the wife build for retirement savings.

Avoid Financial Mistakes and Save Cash

These are noble and worthy topics to discuss. Looking at the grand strategy of personal finance is good and this site’s going to offer plenty of suggestions involving those very subjects. Sometimes though, consumers need to be reminded to maintain upkeep on those practical little financial transactions that most of overlook or forget about day-to-day. I’m talking out the hidden fees found in everyday transactions which affect you even more than one-time fines and fees do.

Reducing Costs on Checking Accounts

Learning how to reduce your checking account costs is one of the simplest ways to tighten up your budget. All you have to do is research one time, find the best option for you, and start taking advantage of it.

You might comparison shop with nearby banks every couple of years, but once you have the right bank which gets customer service and understands the value in retaining good consumers, you can afford them a base level of trust. Anytime you get financial statements of new management or ownership at your bank (and this happens a lot these days), it’s time for a full review of your banking costs. New managers and new owners almost always signal policy changes, if nothing else for the sake of change.

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