86. Save $1,000+ per year – 25 ways to save money on banking

Here are 25 ways to save money on banking:

1. Shop your banking services carefully. As banks consolidate, competition is decreasing and fees are increasing. Think about the services you need first, then call around and see who can deliver them for the least money. Do you do a lot of ATM transactions? Then you need a bank with lots of branches and ATM machines to avoid paying “foreign” ATM fees. Do you travel a lot? Then you want a bank with branches in the states you often visit. Do you need online banking? Find a bank that doesn't charge for this convenience. Do you write just a few checks a month? Find a bank with a stripped-down inexpensive checking account. You get the picture. Think about what you need before you go shopping, and be sure you understand all the fees before you sign up. In general, you're going to get better deals from smaller local banks rather than the biggies.

2. Don't use a bank! Instead, use a credit union. Credit unions generally offer lower rates on loans, higher rates on savings, and lower fees than commercial banks. To find one that will accept you as a member, ask your employer or open the yellow pages and make a few calls.

3. Use only your banks ATM. Avoid fees to get to your own money! Make it a habit to only use your bank, thrift or credit union's ATMs. You'll avoid paying surcharge fees to your bank and the other bank. Save on ATM fees by switching to a bank with a larger ATM network. Withdraw larger amounts to maximize ATM usage. Get extra cash at the grocery store; most of the grocery store point-of-sale terminals are free.

4. Don't use a passbook savings account. These accounts are old-fashioned and pay very little interest.  You're much better off with your banks money market account. You'll earn more interest, your money will be just as safe, and you'll still be able to get to it at any time. For a little more interest with just a tiny bit more risk, consider money market mutual funds. These aren't federally insured like bank money markets, but they're normally plenty safe.

5. Check your checks! There's no law that says you have to buy checks and deposit slips from your bank.  There are companies that will sell them to you for 50% less.

6. Don't pay fees to have a checking account. There are now online banks that will charge you nothing for your checking account, and even pay interest on it.

7. Shop around, and you might even find the same with old-fashioned bricks-and-mortar banks.  Eliminating the fee on your checking account could easily save you $100 a year.

8. Be aware of fee changes. Did you know that banks most often mail notices of fee increases between Thanksgiving and Christmas? That's because they know that you're least likely to read it during that busy time. Don't let them fool you. Read fee notices.

9. Ask and you might receive. Years ago, Money Magazine called 10 credit card lenders and merely asked them to lower their interest rates. Three out of 10 did it! This could work in all areas of banking.  If your bank is charging you high interest or high fees, try saying something like, “Gee, I've banked here for years, but I can get much better deals from your competitors. Can't you lower (eliminate?) this fee (interest rate) so I don't have to leave you?” You'd be surprised how often this simple tactic could work.

10. Go direct! Direct deposit of money you receive and direct payment of bills you owe can save you postage, gas and hassle. And it could increase your interest earnings to boot. See what your bank offers and take advantage of it.

11. Balance your checking account! Estimates of people who don't bother to reconcile their checking accounts range from 6% to 20%.  If you don't keep track of whats in your account, you should just carry cash. Because sooner or later, you're going to be paying giant fees for bounced checks!

12. Give yourself credit. If you're going to have credit cards, get the best possible deals. If you pay off your balance every month, get a card with no fee.  If you don't, get the lowest possible interest rate, but don't forget to include any annual fees in the interest price you're paying. You can find good credit card deals in magazines like Money and Kiplinger, or online at web sites like bankrate.com and interestmatters.com. And, as you've learned from reading this article, remember that a life with no debt is always your best option.

13. Be aware of “stealth” fees. Hidden fees abound in credit cards. They include fees for going over your credit limit, transferring your balance to another company and paying late. The only way you have of finding out about these fees is to call the issuer or read the microscopic print found on the original disclosure paperwork or monthly statements. You should also be aware that your card issuer can sell your account at any time to a company that will change every term you have including the interest rate.  Be vigilant.

14. Know the lingo. When we shop for credit cards, or any loans for that matter, the focus is always on the interest rate you're being charged.  While that's obviously the main thing, its not the only thing.  In the case of credit cards, you also need to inquire about “grace period.”  That's the period of time you have after using the card before the interest clock starts ticking. Twenty-one days is typical, but obviously the longer the better. You also need to know about all fees: the annual fee, and any possible fees that could occur on cash advances, late payments and balance transfers.  Once you've uncovered all the costs, only then can you really compare apples to apples.

15. Join your employers voluntary retirement plan, especially if it offers a match. After your debts are paid off, saving through a retirement plan has some great advantages, like investing automatically and being able to defer the taxes on the money you make.  Even before you pay off your debts, you should enroll in a plan and deposit enough to get the full match from your employer. If your employer is offering a 50% match, that's like earning 50% on your money with no risk! That's a deal that's hard to beat.

16. Don't buy load mutual funds. A “load” refers to a commission, and there's no reason for you to ever pay one.  If you're buying a mutual fund through a financial adviser of any kind (except ones you pay by the hour), you're undoubtedly going to pay a load. Do your own research, buy your own funds, and don't pay a commission.

17. Buy stocks direct, then DRIP by DRIP. You can buy nearly 1,000 different stocks by going direct to the company that issues them. While the fees charged for doing this vary from company to company, they are often much less than the fees you'd pay by going through a broker.  DRIP refers to dividend reinvestment plans that allow you to reinvest quarterly stock dividends into additional shares of stock.  There is normally no fee for this service. To find out if the company you're interested in offers direct investment and/or DRIP plans, you can call the company’s investor relations number and ask them.  To get a company’s investor relations phone number, you can either go to the website of any online brokerage firm (try Etrade.com) and look up company research, or you can go to your public library and look in investment guides (try Value Line.) There are also websites that, for a small fee, will help you establish direct investment and DRIP accounts. One example is Sharebuilder.com.

18. Minimum balance checking account. You can save more than $100 a year in fees by selecting a checking account with a minimum balance requirement that you can, and do, meet.

19. Direct deposit by employer. Banking institutions often will drop or lower checking fees if paychecks are directly deposited by your employer. Direct deposit offers the additional advantages of convenience, security, and immediate access to your money.

20. Get rid of all but one or two cards. You can reduce credit card fees, which may add up to more than $100 a year, by getting rid of all but one or two cards, and by avoiding late payment and over-the-credit limit fees.

21. Don't order new checks through the bank. Order new checks through one of the discount catalogs or through an office supply warehouse. The savings are substantial.

22. Don't take cash out of your credit card. The rate for cash advances is much higher. And there is no grace period you start paying interest right away.

23. In case you are abroad, avoid foreign ATM fees. Plan your errands to get cash at one of the credit union ATMs or use your debit card as a MasterCard.

24. Pay your bills online to save on postage and checks. The credit union has free online bill paying.

25. Before opening a savings account, find out whether the account is insured by the federal government (FDIC for banks or NCUA for credit unions). Financial institutions offer a number of products, such as mutual funds and annuities, which are not insured. The FDIC or NCUA insurance is also limited per bank account, like up to $100,000.

Also check out idea nr. 71: $$$ Save $500+ per month – Negotiate with banks for all your family's bank products and use an entry product, like mortgage refinance

Also check out idea nr. 20: $$ Save $100s per month – Convert your credit card debt into a 5-to-10-year personal, consolidated (home equity) loan

Also check out idea nr. 21: $$ Save $50 per month – Save money on credit cards – Transfer credit card high APR balance into low APR credit cards

Also check out idea nr. 90: $$$ >> Make $2,000+ per month – Become an Make-Money-Become-Millionaire consultant!

Also check out idea nr. 135: $$$ >> Make $1,000 per year of more interest – Switch to a money market account

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