3 Types of Bank Fees That are Stealing Your Savings

ElitePersonalFinance
Last Update: February 11, 2021 Save Money

The banking sector is one very critical and important feature in the World’s economy. By the way, to give a brief history of the banking system, the Euro was once the dominant currency. After the Second World War, the U.S Dollar became the dominant currency. This was one of the major reforms in the banking sector. This was the onset of many reforms in the sector. The current reforms which are taking place are a hidden business venture by the banks. Many clients see them as an advantage to them, but they are slowly milking your savings little by little. This is why you need to be enlightened about the bank charges that are slowly eating into your savings.

Bank Overdraft Fees

First of all, you need to understand what an overdraft is? This is a service being offered by the banks to withdraw money up and above your savings. Business people are the target of this type of preapproved loan. Since they make huge capital transactions, at times, they run short of capital, and business has to continue.

The banks take advantage of this and offer you a fund to make payments on your behalf. This is like they offer you a short term loan service. You are doomed if you are of the view that they help you so much. The interest rates associated with overdrafts are usually very high. Also, the bank charges during the processing of the overdraft payments are super regular. Due to this, the banks make double profits or more from a single transaction by a customer. This vice of acquiring an overdraft is slowly stealing the savings of many people.

The remedy to this is making sure you always carry extra cash with you. By doing this, the extra cash can bail you out in case a shortage occurs without having to go the overdraft way. Your savings will remain intact without the banks meddling with them.

Checking Balance Fees and Accounts Opening Fee

Many banks are operating in the market. The banks are in business too, with their main aim being to make profits. These profits are amassed from unsuspecting clients like you and me. They charge exorbitant prices when it comes to accounts opening and checking of balances.

You may view the charges as normal since you are paying for the services received. These charges come with a hidden agenda in them, which very few people can crack out. Each transaction you transact via the teller/counter has its simplified version, costing you less. A briefcase study of the leading banks in America is vital for your understanding to be enhanced.

The bank of America charges around $25 for you to open an account with them. They further charge a rate of $12 as a maintenance fee for the account monthly. Per year this translates to $144, which is quite a lot of money if it was dedicated to savings. This clearly shows the extent to which these charges are eating your savings out. You may deceit yourself to save, for instance, $10 a month only to find you have -$2 balance in the savings account.

The surest way to avoid this is by making sure that you deposit about $200 in every banking cycle. Also, you need to ensure that your account balance is $1,500 or above at any given time. You should also open an online account that is teller free. By doing this, your savings are not eaten up by the banks.

Retirement Benefits Funds / Accounts

It is the sole wish of every employee or business person to enjoy life in the future when they retire. Having this in mind, people start saving at a very early age for their retirement benefits. This is because retirement benefits earn compound interest. The earlier you start saving, the larger the amount you save, which translates to a high interest when you retire. The banks consider this as a loss to their operations. Thus they find a way to mitigate this.

The banks charge you a commission fee. The fee is meant to compensate the person who is managing your account and your investments. Some people may know the investment patterns, while others have no clue. If you have no clue, this should not worry you since you can do your own research online. By doing this, you ensure no commission is deducted from your retirement savings. Thus they earn high interest.

The banks also charge a fee of $12 per annum for each retirement savings account they run. To mitigate this, you can open an online account in which you manage the account yourself. You are still at liberty to enjoy the customer care services the bank offers to its clients. This way, your savings are not tampered with.

The Terms and Conditions

To open an account with a bank, you need to agree. The agreement is presented to you in the form of a terms and conditions sheet. Before you open the account, you have to sign the sheet to show that you accept their terms and conditions.

The guidelines are not always client-friendly. By the way, back in their minds, the bank executives are aware that few people spare their time to read the guidelines. A clause meant to steal cash from your savings may be inserted without your knowledge in these guidelines. This way, your savings will be subject to deductions you are not aware of. The remedy to this is by making sure you go through the terms and conditions paper thoroughly. Whatever you are not sure about, you can ask the custom care attendants to explain it to you. This way, you and your savings will be safe.

Banks are important in our lives, but they are the newest thieves in the economy. They rob you without violence in small amounts, which in the long run accumulate to massive wealth. This post was meant to enlighten you about these banks and how to be safe from them, both you and your savings.

MEET THE AUTHOR

ElitePersonalFinance

Recommended Articles

Debt

Best Direct Lenders 2021

EPF July 4, 2021
Debt

Can I Get 0 Interest Personal Loan?

EPF May 25, 2021

AS SEEN ON