The charges we pay to our banks can add up over time. Considering that many of us use the same banking institution for years, paying even a little more each month can end up costing us a lot of money, according to bankingadvice.com.
After all, it is easy to keep doing business with the same institution, since switching banks can take a bit of time and effort. But in some cases, it may be worth considering making the switch.
There are many online banking institutions that have successfully moved from the traditional bank branch-centric business to a thriving online-only banking business.
Here are four categories of expenses you will want to evaluate and compare when deciding whether it may be better to do business with an online bank.
- Monthly account fee: This type of charge goes by many different names. You may be familiar with it as a maintenance fee, for example. This type of charge is assessed simply for the privilege of having the account at the bank.
You may be able to avoid these fees in a couple of different ways, such as maintaining a higher average balance or minimum balance, by having other accounts at the same bank, or by using direct deposit, but then, you will need to make sure you are always meeting those other obligations.
- Overdraft fees: One of the biggest fees you can be hit with occurs whenever you become overdrawn on your account. In many cases, being overdrawn by any amount (even a very small amount) can trigger these fees.
When considering an online bank, enquire about the type of overdraft protection they offer. Remember that if you become overdrawn on your current account, you will not only face fees from your bank, but also from the merchant that you tried to pay.
- ATM usage fees: Most local banks will provide you with free usage of their own ATMs. However, most will charge a fee when you use another bank’s ATMs, and this fee can be up some naira per use, or more.
Most online banks have generous ATM fee reimbursement programmes that have the potential to save you a lot of money each month.
- Bill pay service fees: An increasing number of banks are charging fees for customers to use their online bill pay services. These fees can vary widely both in terms of the amounts charged as well as how and when the fees are imposed. For example, some banks may charge a relatively high fee, but then waive that fee whenever you make more than three payments in a month. An online bank is much less likely to impose these types of fees.