How to Protect Your Savings
When they are looking for a safe place for their money, many Americans turn to their savings accounts at the bank.
While these accounts don’t pay much in interest, at least they protect your money.
While this may have been true in the past, banks are starting to charge new fees that could eat into your savings.
To protect your nest egg, there are a few strategies you should keep in mind.
1. Research your account.
If you aren’t paying attention, bank fees can easily sneak up on you. It is easy to pay $10, $20 or even more money per month in fees without even knowing it.
Your first step toward fixing this problem is to see exactly what your bank is charging you in fees.
The easiest way to get this information is to call your bank’s customer service hotline and ask what you’re paying each month.
The representative may also be also to recommend a new account or combination of services to help you bring down costs.
2. Add services and money.
Banks charge fees on savings and checking accounts because these accounts don’t provide much of a profit margin.
It does not usually make sense for a bank to offer free checking to someone who only keeps a few hundred dollars at the bank. Most banks waive fees on your savings account as long as you keep a minimum amount of money in there each month.
They also may waive the fees if you add on other services like an investment account or a direct deposit of your work paycheck.
“To avoid these fees, you can add
more services to your account.”
3. Cancel unnecessary benefits.
Think about your bank services. Do you really use them all?
Banks often charge extra fees for accounts that offer free checks, paper statements and unlimited transactions per month.
If you can switch to online statements only, buy checks only when you need them and stick to a fixed number of transactions per month, you will have a better shot of avoiding fees that will hurt your savings.
4. Move online.
One of the biggest expenses banks need to pay for is their physical locations. Those buildings and staff don’t come for free.
If you switch to a company that handles everything well online, for example Ally or ING, you will be dealing with a company that doesn’t have these expenses.
As a result, it is easier for them to make a profit and they can better afford to offer customers a free savings account.
You don’t get the same personal touch of being able to walk into your bank, but the tradeoff is lower fees.
5. Consider a credit union.
Another option is to switch to a credit union.
These companies are owned by their members, not by private shareholders. They are more focused on giving service and aren’t under as much pressure to increase profits.
As a result, credit unions are less likely to charge fees on your savings account than a normal bank.
You worked hard to build up your savings, so don’t let that money slip away.
Use these strategies and you should be able to protect your savings from extra bank fees.
Photo source: huffingtonpost.com