5 Sales Strategies Your Bank Uses to Make Money

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Your Money Working Harder

• Best Online Savings Accounts
• Interest Bearing Checking Accounts
• Best Online Checking Accounts

Many people fail to realize that their banking institution is, in fact, a business. And as such, they're using a wide range of marketing and sales strategies on you, whether you realize it or not. It's up to you to be the smart customer. Let's review five of the sales strategies you should keep an eye on.

1. Cash or Gift Card Offer for Opening an Account

When a new bank branch opens in your neighborhood, you may receive a mailer informing you that you could receive a hefty cash bonus or gift card for opening a new account. Free money may sound great, until you realize that there is a catch. Very often you have to meet a minimum balance deposit for a required period of time, effectively locking you into doing business with the bank. Think about it: How often do you switch banks? Consider whether you really want to deal with having a new bank account before you jump at the offer.

2. Free Checking Account

There's no such thing as a free lunch, and some free checking accounts are no exception. Common requirements that banks impose on their customers include:

• Maintaining a minimum balance. Some banks require a minimum daily balance per statement cycle to have a $0 monthly maintenance fee;
   
• Meeting a minimum number of transactions. Some banks may require you to use your debit card a minimum of 10 to 12 times per month; or
   
• Making at least one monthly deposit. Often, that monthly deposit must be a direct deposit from your employer.

Banks may set only one of these requirements or a combination of them. If you were to fall short on any of these requirements — such as making only 11 out of 12 required monthly transactions, or having an account balance below the required minimum for even just one day — you would get charged a fee for using your "free" checking account. Make sure you can easily meet their requirements before signing up.

3. Higher Interest Rate on Savings

A bank may offer what sounds like a very high savings rate, but the bank will use language such as "up to 2% APY." To get the promised 2%, you'd have to keep a very high balance. Depending on the amount of money you actually have to put into the savings account, you might end up with a lower rate than you already have — 0.20% or 0.25% APY, for example. (See also: Best Online Savings Accounts)

4. ATM Fees Refund

Let's face it: ATM fees are annoying, and some banks will offer to reimburse all or some of the ATM fees to make up for the inconvenience. However, the limit of the ATM fee reimbursement varies widely per banks. Some banks offer $10, $15, or $20 per statement cycle or month. With the average ATM fee at $2.90 in 2016, you could easily eat up any of those refunds in just a few trips to the ATM. Consider your ATM needs and options in your area before you sign up with a bank with limited network ATMs. (See also: 8 Ways to Avoid ATM Fees)

5. Mobile Check Deposit

You've seen the TV ads: a busy Millennial, mom, or retiree totally ecstatic about how they can save time by depositing checks on the go with their smartphone. Snap, click, deposit! It's great for the average person with a few checks for small amounts, but if you're a freelancer or small business owner who thinks this will save you trips to the bank, think again. There are all sorts of limits on the amount per check (and even amount per 30 days) that you can deposit this way. Some banks offer special equipment that allows higher limits, but still, it may not be as convenient as you think. (See also: Modern Ways to Send Money Instead of Using a Check)

The Bottom Line: Know Your Bank Fees!

When you're unhappy with your current financial institution, the promise of better banking through a higher savings interest rate, lack of fees, or refund of all ATM fees may sound enticing. While some of these selling points can indeed improve your financial situation, make sure to thoroughly review the requirements, if any, to gain access to the promised features. (See also: Switch to a Better Bank in 5 Easy Steps)

When facing a list of potential requirements, do a cost-benefit analysis. For example, can I leave a $5,000 deposit to get a 1.5% APY without putting any pressure on my monthly budget? If so, then take advantage of that higher savings rate. Be a smart bank user, shop around, and evaluate all of your options.

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