How Much Can You Save By Switching Banks?

How Much Can You Save By Switching Banks?

You might be a pro when it comes to scouring the circulars for savings on your favorite personal care products, you may even be cashing in on amazing vacation deals by utilizing loyalty points and rewards miles, but are you missing out on savings when it comes basic banking?

Most people don’t associate banks with deals or discounts - an August study by the Wall Street Journal however, proved just how much you can save by banking in the right place. After analyzing fee data at over 6,000 banks, the study found that at the 25 institutions with the highest fees, the average account was charged more than $383 annually. Conversely, the study also found 160 banks where the average account was charged less than $5 in fees each year.  That’s a difference of $378!

In other words, when it comes to your bank - just like your groceries and your travel - it pays to shop around. So, what should you look for to ensure you snag the best deal?

Fee Free Checking. Some banks will charge you a monthly maintenance fee for basic checking if you don’t maintain a minimum balance or set up direct deposit. These fees, typically around $12/month, mean paying the bank $144 each year just to hold onto your money. And that doesn’t even take into account the many other fine print fees that often accompany this most basic of accounts - check fees, paper statement fees, overdraft fees, etc.

Overdraft Policies. Speaking of overdraft fees, take the time to read up on your banks’ overdraft policy. A recent analysis by Magnify Money examined the cost of a single $100 overdraft paid back in 10 days. They found that this scenario could cost the consumer as much as $83.93 and as little as $9 depending on the bank. When looking into overdraft policies, note how many times per day the bank can charge you for your overdraft as well as any extended overdraft fees.

ATM. Believe it or not there are banks that don’t subject you to paying astronomical ATM fees every time you need access to your own cash. Some will even refund ATM transactions worldwide. At $2 or more per transaction, saving on those small withdrawal fees can mean significant savings over the course of a lifetime.

If all of these fee free options exist, why does anyone still pay the price of expensive banking? Well the banks don’t exactly make it easy. A 2012 Pew research study found that the average length of a disclosure statement for a basic checking account was 69 pages - leaving plenty of room for fine print fees to sneak in undetected.

To avoid those fees however, consumers can look for better deals at banks that advertise their free perks. Those that offer ATM rebates and fee free checking typically display those features proudly. For the most part, online banks have the most fee free options. With fewer operating costs, thanks to freedom from typical brick and mortar business expenses, these banks pass along savings to their customers in the form of fewer fees and higher rates.  The end result - better deals on basic banking.