Banking Fees – Are You Paying Too Much?
Your bank account service fee plan should reflect your needs and monthly usage otherwise you may be paying more than you should.
Most banking plans allow a set number of debit card transactions so we recommend you review 6-12 months of bank statements to get a handle on your usage. You should then find out what plans are available at your financial institution to find the one that best meets your needs. You may also want to look at other banks, trust companies or credit unions and consider switching if you can find a lower cost banking plan that suits your needs. You may also qualify for low or no bank fees if you are a full-time student or senior citizen.
Tip: most banks charge additional fees for using another bank’s ATM. You can avoid these fees by using your own bank’s ATM or by withdrawing additional funds, commonly referred to as cash back when you make a purchase with your debit card.
It’s important to find the best type of account and monthly plan to fit your lifestyle so you can start by reviewing your monthly bank statements to see the fees and service charges you have incurred in the past. This will provide the information you need to compare the types of accounts and plans that are best suited to your usage. Having the wrong plan or too many bank accounts can be costly and you might be paying for unnecessary bank expenses than a plan that is tailored to your individual or family needs.
Tip: avoid non-sufficient funds (NSF) charges by always balancing your account and ensuring the money is there before you write the cheque or prior to the electronic payment being taken. This takes some planning but the costs of not doing it can be significant.
Tip: maintaining a minimum monthly balance in your account. Some banks will reward you for maintaining a set balance by reducing your service fees.
The Financial Consumer Agency of Canada (FCAC) has an excellent online tool to help you compare different types of bank accounts so you can determine which is right for you - FCAC website.
If you find that your bank account is always in overdraft could be an indication that you are headed for financial trouble. Consider reaching out to a licensed professional to receive a financial assessment to review your debt restructuring options.
Powell Associates Ltd. is a Licensed Insolvency Trustee (LIT) focused on providing debt settlement, proposal and bankruptcy solutions for individuals and businesses. We offer free consultations to review your personal financial situation and practical debt resolution options. Contact us to discuss your situation over the phone or book an appointment to meet us face-to-face in Saint John, Moncton, Fredericton, Charlottetown or Dartmouth - it's your choice.