No More Free Checking
Hold on to your wallet, you are about to pay more for your checking accounts. Thanks to new regulations by Congress, banks will be limited as to how much overdraft fees they can collect from customers. To offset the lost revenue, several big banks (Wells Fargo, Bank of America, et el.) recently announced that they will begin charging customers monthly fees for their checking accounts. While I’m not surprised the banks swapped one fee for another, I am surprised many Americans still bank at these large institutions despite their exorbitant fees and substandard service, when there are so many cheaper and better alternatives available.
Wells Fargo charges customers $5 per month unless they maintain an average daily balance of $1,500, while Bank of America charges $8.95 for the same minimum balance requirement. That means that if your account falls below $1,500 on any given day in the month, your account is slapped with a monthly fee. While there are countless other fees, including an additional $5 a month to view your deposits online for business checking accounts at Wells Fargo, and $3 per month to view check imagines online at Bank of America, the one that’s really over the top is a $10 fee for incoming wires at Wells Fargo. That’s tantamount to charging you for making a deposit.
On a positive note, there are many alternatives to banking with the national giants. The internet’s omnipresence at work, home, or on our mobile devices has made internet banking simple. Even the smallest community banks and credit unions have a sophisticated web presence. Community banks, credit unions, and web-based banks are an excellent option for even the savviest consumer. For example, many of these entities offer truly free checking (including business checking), unlimited ATM fee reimbursements, free checks, and I have yet to find one that charges for an incoming wire.
So before letting your big bank surreptitiously take money from your account each month, consider other banking options.
Ara Oghoorian, CFA is the president and founder of ACap Asset Management, Inc., a “Fee-Only” financial advisory and investment management firm located in Los Angeles, CA. Ara can be reached at firstname.lastname@example.org or at http://www.acapam.com