Low bank fees are available if you're willing to look for them

Institutions now charging record for some accounts

Spending Smart

Your Money

July 10, 2005|By Gregory Karp

It's bad enough that bank accounts pay paltry interest these days. You don't need to lose more money by overpaying for checking and savings accounts.

Remember, you're allowing the bank to use your money, so adopt the attitude that a bank has to sell itself to you. With meager interest rates, the main feature to look for is low fees.

Banks are charging a record-high average service fee of $11.08 a month, or about $133 a year, on interest-bearing checking accounts and $3.42 monthly for checking accounts that pay no interest, a recent study by Bankrate.com shows. Fees for using another bank's ATM hit a new high of $1.35 on average, with many banks charging $2 a pop.

Those fees could devour any interest you earned and essentially force you to pay the bank for using your money, a losing proposition for consumers.

Here are tips to avoid unnecessary bank fees:

Shop around.

You want a bank account that fits your needs and doesn't charge fees. But if you work in a job that pays in tips, you might need unlimited access to tellers to sort through deposits of bills and coins. But if you do your banking online and at ATMs, investigate what perks a bank will give you for forgoing teller visits.

"Banks have a number of different accounts, and each is geared to a different type of consumer in terms of their banking habits," said Greg McBride, an analyst with Bankrate.

Find free checking.

There are enough banks that you should insist on free checking, with unlimited check writing, no minimum balances and no monthly service fees, whether a flat fee or based on the number of checks you write.

"The good news is there is a proliferation of free checking accounts," McBride said. "It used to be a hallmark of smaller, local banks, but big banks have added free checking over the past few years."

Even better is an interest-bearing checking account.

Order your own checks.

Some companies will print checks at a fraction of a bank's price, often $6 to $8 for a box of 200 checks.

Use combined accounts.

Sometimes you can avoid minimum-balance rules if you have multiple accounts or loans through the same bank.

Try online banks.

Use automatic transactions.

Try your credit union.

Use ATMs wisely.

Gregory Karp is a personal finance writer for The Morning Call of Allentown, Pa., a Tribune Publishing newspaper. E-mail him at yourmoney @tribune.com.

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