How to get fee-free banking

How much do you pay in bank fees every month? Some people pay tens or even hundreds (if they have a lot of dishonour fees)  of dollars a month in fees to the bank. Personally I hate paying even fifty cents. It’s really not necessary. There are a number of ways to get free banking.

Sometimes all it requires is a bit of fact finding and/or negotiation with your bank. Don’t be afraid to ask. The bank can only say “no”.

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The most straightforward ways to get fee free banking are:

Mortgage holders: If you’ve got a mortgage, your bank shouldn’t be charging you any monthly or transaction fees on your banking. Talk to a staff member if you are being charged.

Students and graduates:  Banks are keen to get students and graduates on board in the hope you’ll stay with them for life. As a result they offer great deals.  Usually you’ll pay no base fee or EFTPOS/ATM fees and you’ll be given a free overdraft – but try not to use this because living on credit not a good habit to get into this young in life.

Over 65s: If you’re aged over 65 then your bank is likely to offer a SuperGold package, with much the same discounts as offered to students and graduates.

Even if you don’t qualify for any of those options, there are other ways to bank for free:

Understand your banking: Take a look at your statements and find out what you’re being charged for. There may be fees you’re not even aware of such as contact centre high use fees for more than five calls per month. It could be something such as setting up automatic payments. Not every bank charges for this.

Shop around: If your bank doesn’t have a suitable fee free product for your needs, then shop around. Although the majority of us bank with ANZ, ASB, BNZ  and Westpac, there are other options.  Smaller banks include Kiwibank, TSB , SBS, Co-operative, and Heartland. Credit Unions offer “banking” and are not for profit.

Use Internet banking:  Ask your bank for an online account that has no fees if you use Internet, EFTPOS, ATM, mobile or TXT banking. You will probably need to cancel your paper statements.  The move to Internet banking may need behavioural changes. But those changes really pay off.

Avoid other banks’ ATM machines.  Use your own banks’ machines for fee-free withdrawals or get cash back on EFTPOS. That can save you a lot of money in fees.

Don’t get pinged for honour and dishonour fees: Every time you go into the red you’re charged honour or dishonour fees by most banks. Even those that don’t charge these fees have unarranged overdraft fees. You can avoid these fees by managing your accounts better. Use sweep facilities and free alerts to make sure you never go into the red.  Sweep quite literally sweeps money into one account from another automatically if the balance falls below a certain level. Setting up a budget is the best way to ensure you always have enough money in your accounts to cover bills.

Think first: Every time you pay for something, ask yourself: ‘am I incurring fees?’  Use your online banking app when you’re out and about to check your balances and consider upcoming direct debits and automatic payments before spending.

Pay your loans on time:  Banks and other lenders charge fees if your payment fails. Don’t let them.  While you’re at it, set up a direct debit to pay your credit card off in full every month. A lot of Kiwis do this.

Log in daily: It’s a really good idea to get into the habit of logging into your accounts daily. That helps you keep track of your financial position and will alert you to any fraudulent activity. If you know your balance you won’t be tempted to spend when you don’t have the funds.

Your bank will be helpful if you telephone or visit and ask the question: “how can I avoid paying fees?”  Sometimes the bank’s staff will make suggestions that you may not have thought of. My bank, for example, suggested I choose a particular current account that had no monthly fee, but charged $3 for every cheque I wrote. I haven’t written a single cheque in three years as a result.

If you deposit cash over the counter, or have Trade Me customers who do, then look for a bank that doesn’t charge a fee for this. They do exist.


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