I received an email from my bank telling me they were updating their fee structure.
The email didn’t explain what the updates were, but referred me to their website if I wanted to learn more.
That was two weeks ago…
I forgot all about it until I stumbled across the email again while looking for something else.
Now, I’m not saying my bank was being deliberately elusive, but I will say that most of us are time poor and squinting at pages of fine print isn’t at the top of our to-do lists.
Bank fees may not seem like a lot of money, but that’s exactly why they’re dangerous. We may not miss a dollar or two here and there, but in the long term it can really add up.
What are fees for?
It’s important to understand what banks are charging for.
Cash is no longer king, and some financial institutions may charge customers for withdrawing or depositing cash at a branch.
Overseas transactions can attract fees, as can EFTPOS and tap and go transactions.
You may get charged for using ATMs not owned by your bank, and there can also be fees for account keeping, paper statements, dishonoured or late payments, going overdrawn or having an overdraft, and for both setting up loans and early termination. Credits cards and loans can also have an annual fee.
Get the right account
Banks are having to pay back money to one million low-income earners who had high-fee accounts despite being eligible for products with low fees.
It shows that we can’t just trust we’ll be told how to make savings, we have to seek information ourselves. Ask your bank if low-fee options are available to you, then compare with accounts from other banks.
Low-fee accounts may come with lower interest rates on savings accounts, or higher interest rates on credit cards or loans, so take that into account too!
How to pay less in fees
If withdrawing cash, stick to using your own bank’s ATMs.
An independent ATM I used at a petrol station wanted to charge me $2.50 to withdraw $20!
Swipe your card at the shops instead of tapping, get your statements emailed instead of posted. And keep track of when automatic payments are due so you have the funds to cover them.
Make credit card and loan payments on time and, if you’re experiencing financial hardship, speak to your bank.
Great idea
Whether we’re facing an interest rate cut or rise is a topic hotly debated by finance boffins in the lead up to each Reserve Bank’s cash rate announcement.
There’s one thing most experts agree on, however, and that’s trying to maintain your current higher mortgage repayments even if rates do drop.
This helps chip away at your principal, reducing the amount of interest you’ll pay over the life of your loan.
Making use of offset accounts, where the balance helps reduce the amount of interest you pay on your home loan, is another effective way to get ahead on what is, for most people, life’s biggest expense.
Ms MoneySaver’s tips are prepared in good faith. That’s Life cannot assure readers that they will be effective in all cases and is not responsible for any loss or damage resulting from following them.
