Beating Bank Fee Increases
This past week I was helping a colleague sort through her financial statements and came across a notice from her Chase bank account. According to the notice, on February 8th her bank will be increasing her banking fees by a significant amount. Not only will her monthly fee increase from free to $6 since her account doesn't qualify for a fee waiver, but non-Chase bank ATM fees and overdraft charges will also increase by a few dollars each. This is just one bank out of many that intend to increase their fees this year.
However, there are alternatives to beat, eliminate, or reduce fee increases at large banks. One option is to meet their fee-waiver criteria. Often that includes having accounts that have monthly recurring direct deposits or keeping a minimum daily balance. Another more obvious option is to switch banks. As hesitant as I am about switching banks, it's a thought that has crossed my mind, especially considering there might be fee increases on my accounts in the near future. But one can't just up and switch banks without some research or due diligence.
The Importance of Convenience
For me, the biggest deciding factor on which bank to choose, or whether to switch at all, is convenience. Since I have various sources of income that often appear in the form of checks, I like knowing I have access to an actual bank branch or ATM. Since I also have an online money market account that's more difficult to access (no available ATM or bank), my local bank branch is where most of my monetary activity takes place.
Analyzing my banking habits a little more closely, I could probably do without an actual branch, but an ATM location is a necessity, especially now that many ATMs digitally scan check deposits and credit those amounts the same day. This narrows down my options a bit, or at least eliminates online-only options for my everyday checking needs.
Where to Research
Knowing my banking habits and what I would like or need in a bank, I came across a site that helped me narrow down my search, Find a Better Bank. Using Find a Better Bank, I was able to use my zip code as a starting point and search within a five-mile radius, though their options include up to 50 miles. Next I selected banking features that applied to my personal situation from "Don't Care" to "Nice to Have" to "Must Have." Some features included interest-bearing checking accounts, mobile banking, debit card rewards programs, online bill pay, and overdraft protection to name a few.
I also answered some questions that would help determine how many fees I accrue a year for a rough estimate of potential matching banks. For instance, one question asked how often I use another bank's ATM, or how often have I been overdrawn in a year. Knowing that fees are possibly increasing this year, I can use this as a guideline to sort out the banks that are already more expensive from the ones that are less fee-heavy. Find a Better Bank also claims they monitor the banks every 90 days for the most up-to-date information, helpful if fees do begin increasing this year.
Finally, based on my answers to these questions, Find a Better Bank displayed a list of possible results sorted by estimated annual fee. However, the results also allowed me to sort by distance and percentage of preferred features. The least expensive bank was missing a few preferred features, but none that were important in the grand scheme of things. Coincidentally, the bank I currently use was listed as the most expensive bank on the list.
Find a Better Bank results also allowed me to compare two to three banks at a time, allowing me to see the differences between basic account information, like the minimum to open an account, account fees, and services. I was surprised at the differences between the least expensive options and the most expensive options. Two particular banks seemed very appealing, and one of them has locations near me.
Since my bank hasn't raised my fees yet, I'm still a bit hesitant to switch banks. I also realized that Find a Better Bank compares particular checking and savings accounts for each bank, and I didn't see the one I currently use in the results. This may have explained why my bank came out as most expensive on the list, yet I don't pay many fees myself. However, knowing that I have options if my bank follows suit and increases fees this year gives me a peace of mind.