How to Avoid Bank Fees and Restrictions

How to Avoid Bank Fees and Restrictions

We put our money into a bank for safekeeping. However, we often find that some of our money gets lost to fees, such as ATM fees, monthly maintenance fees or overdraft protection fees. Furthermore, there may be restrictions on your account that do not always allow you to use your money in the way that you want. This seems unfair, but fortunately, there are ways that you can avoid having to pay bank fees.

Continue reading to learn how to find the best free checking account for your banking needs.

Avoid Maintenance Fees by Using Direct Deposit

One of the best and easiest ways to avoid unnecessary fees on your bank account is to set up direct deposit. This is simply the act of having your work paycheck, Social Security benefits or other type of income being automatically transferred into your account as opposed to you manually depositing it.

There are two main reasons to use direct deposit to avoid fees. First, some banks will let you avoid fees if you have a certain amount of money directly deposited into your account each month. And second, while other banks may not have a direct deposit requirement, they will charge you a monthly maintenance fee only if your account balance is lower than a certain amount.

Having your checks directly deposited into your account can help you meet the direct deposit rule or ensure your account stays above the minimum, protecting you from fees. As a bonus, direct deposit makes things much more convenient for you, as you avoid having to deal with handling and depositing a paper check. You can prevent any hassle and even have access to your money sooner with direct deposit.

If you have a job, you can sign up for direct deposit through your employer. If you receive checks from Social Security or another program, you can sign up through the program’s website.

If you keep money in a PayPal account, you can arrange for an automated transfer of money into your bank account each month. Many banks view this as a form of direct deposit. It is frequently referred to as an automated clearing house (ACH) direct deposit, meaning any electronic transfer of funds by a business to your account. However, this depends on how your bank categorizes this transfer of funds.

Setting up direct deposit is simple. All you need to do is provide the company that is sending you money with your bank details, and they will typically do the rest. This information includes:

  • Bank account number
  • Routing number
  • Name on the account
  • Address of the bank
  • Type of account

All of this information can be found on your online banking screen or in your checkbook. To make this process even easier, you can use a direct deposit form, which allows you to fill in these details to hand over to your employer. Just ask your employer or any other entity that sends you checks for a direct deposit form.

Sign Up for a Special Checking Account

If you are a member of a certain group, including seniors or college students, you may be eligible for a special checking account. These accounts can provide you with extra perks while also removing the fees and restrictions that come with typical checking accounts.

There are a variety of types of checking account, such as rewards checking accounts and premium checking accounts, alongside the traditional checking account. However, special accounts such as senior checking accounts are great for those in the older age bracket and may offer features such as no out-of-network ATM fees, no overdraft fees or no monthly maintenance fees. Along with these perks, you may also have access to free checkbooks or free financial advice to make your money go further. Since seniors are often the victims of financial fraud, some senior checking accounts will have special protections. Most banks will provide some type of special senior checking account, but it is still worth researching several of them to find the right one for you.

College students may also benefit from a special checking account. Some of the best checking accounts for students are offered by well-known banks such as Chase and Capital One.

While many banks offer no monthly fees for college student banks accounts, it is still important to compare student bank accounts before you sign up.  For example, some banks will still charge an overdraft fee for college checking accounts. Be sure to always weigh the pros and cons before selecting your student bank account.

Choose a Bank With No Overdraft Protection Fees

If your account is overdrafted, you can end up owing your bank a lot of money in overdraft fees. When looking to save money on your bank account, one of the best things you can do is to find a bank with no overdraft fees.

Typically, if you make a purchase that costs more than your current account balance, your bank will automatically cover it with overdraft protection. While this can be helpful, banks may charge as much as a $36 fee for each time you use overdraft protection.

To keep from paying overdraft fees, you can opt out of overdraft protection. This will ensure that any purchases are declined if you have insufficient funds in your account, and your account balance never falls below $0. But if you would like the benefit of overdraft protection, you can instead find a checking account that does not charge an overdraft fee.

There are a variety of banks with no overdraft fee. One example is the Chime SpotMe account. This account allows account holders to be “spotted” up to $100 in overdraft protection without incurring a fee. The downside to this account is that, since it is a mobile-only bank, it may be hard to find ATMs you can use without incurring an out-of-network ATM fee. As always, it pays to weigh out your options and figure out which fee you are less likely to incur.

By Admin