BANKING BASICS & WHAT TO LOOK OUT FOR 1
No such thing as a free lunch, specially in bank services. You do a bank a favor by opening a checking account and it charges a monthly fee (which, in some banks, can go over $10 per month).
If you maintain a small balance, the bank will try to seduce you to put in more money by waiving the monthly fees. But –you have to look out for the fee that it will charge if you go below the minimum balance. Those extra charges can add up to a tidy sum.
I think this is an unfair exchange. You give the bank your money which they give to other bank customers as loans or mortgages –from which they earn hefty interest revenues. In effect, you have lent the bank interest-free money and –in exchange– it earns interest on your money.
Of course, if you need to regularly pay out significant amounts, you have no choice but to maintain a checking account –but look out for your bank balance and the fees you are charged. Scrutinize your bank statements and know the expenses you incur for availing of a bank service.
image from Microsoft Clipart
I agree with you Ren. Those small fees may not seem like much by themselves but they all add up in the long run. Good advice about examining the bank statements – sometimes you can find your bank is adding charges on which aren’t very noticeable so double check your statements! Great post.