I don’t understand why people are still paying banking fees. Bank fees, something as simple as “$7 per month for the use of this bank” are ridiculous, and you shouldn’t be paying them.
I used to pay bank fees. I had a bank account that I had set up with my parents. It cost 5 or 6 dollars every month for the use of their bank. My roommate in college was also paying bank fees – but it was more like $11 each month. This doesn’t make any sense.
The reason that banks work as they do is that they take your money and invest it, making money off the cash that you give them. They’re already making money off of you. Why would you pay the bank for the right to let them use your money to make more money?
I have now switched to a bank that doesn’t have any banking fees. Well, I should clarify, they don’t have any regular monthly fee. There is no cost to doing business with them. In addition, unlike some “free” banks, there’s also no fee for each debit transaction, and there’s no limit on how many transactions I can make.
The only time I would pay a fee to my bank is if I bounce a cheque or withdraw cash from outside of their ATM network. Seeing as it’s a credit union, I can withdraw from any other credit union without a fee, so my network is often just as large – if not large, than most of the large national banks.
Why Banks Shouldn’t Charge A Monthly Banking Fee
Banks do need to recoup their costs. Back in the day, there would be lineups out the bank on payday, getting cheques cashed, moving money around. I remember spending way too much time as a kid, inside a bank, waiting for my mom to finish their banking for the day. That’s why, like in car dealerships, they often have areas for kids to play in – because it took forever. That’s a thing of the past. I haven’t stepped foot into a bank more than half a dozen times in the last 2 years, and I don’t know anyone who has.
All my banking is done online. I can pay bills, transfer money, look up information, anything I need, from my couch. When I have gone into the bank, it’s been for things that need to be done in person – signatures for insurance, getting marriage certificates, or closing down a bank account and transferring the balance to another.
As a result, banks need to spend less money on upkeep. They need less tellers. Some banks, like Tangerine, hardly have any place you can go at all. Another option is PC Financial’s online banking, which allows you to use CIBC ATMs as well as the kiosks at Lolaws stores. The rise of online banks has also contributed to the lowering of monthly bank fees – so why are you still paying yours?
Switching Can Be Easy
To be fair, transferring your services to a different bank isn’t always the most pleasant experience. When I did it, I hardly had any issues because I hardly had any money. If you have a fairly sizeable bank account, closing it and walking out with that much cash might be a bit of a problem. You may have to set up the new bank ahead of time, and then get them to transfer it directly into that account, as that would the safest and most secure way of doing it. That process might actually cost you some money.
Other than that, however, opening a new bank account is surprisingly easy. Just bring some documents, go into the bank, and ask for a new account. Make sure it is a free account (no monthly fee) and make sure there are no extra hidden charges (per transaction fee). There are numerous banks out there that have a fully free bank account, regardless of bank account size or any other restriction. Find that one, and transfer your services there.
The hassle is worth it. A bank account is something that you’ll change on a very irregular basis, so even if it’s only a $5 monthly fee, over 5 years that will add up for $300. It might not be worth the $5 now, but it should be worth the $300 later. So check your bank, see if they charge fees, and close that account – maybe they’ll make life easy for you and reduce/remove the bank account fees to keep your business. If not, switch! There’s no reason to be paying bank fees these days.