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75 Personal Finance Tips on How to Save Money in 2019 and Be Wealthy

Ready to take charge of your finances for 2019?

Diving into the waters of personal finance can be exciting, but also overwhelming. There are so many personal finance blogs to read and personal finance tips to discover. It can be easy to get lost in the information and hard to find the nuggets of wisdom you really need. That’s why we’ve rounded up 75 personal finance tips for you to navigate your finances in all areas: from saving to spending, earning and investing, and of course budgeting (it’s not as scary as it sounds).

Read on to get the best personal finance tips:

How to Save Money

1. Open up a high interest savings account.

2. Set up automatic withdrawals from your checking to your saving account after payday.

3. Save at least 10 percent of your income, more if possible. If that’s not possible, save a minimum of one percent.

4. Have a rainy day fund that has one to two month’s worth of expenses saved up.

5. Have a longer-term emergency fund of three to six month’s worth of expenses.

6. Negotiate your Internet, phone and cable bills to lower your costs.

7. Save money by paying premiums annually instead of month to month.

8. Use any windfalls of cash from a tax refund, birthday gift, or work raise to pad your savings account.

9. Batch cook your meals on the weekend so you’re prepared for the week ahead.

10. Always use leftovers after going out to eat.

11. Have food staples like beans, rice, soup and frozen pizza to avoid “food emergencies” after a long day of work.

12. Download Ibotta to save money on groceries and get cash back.

13. Create targeted savings goals for everything you want to save for, including travel, emergencies, pet expenses and home renovations.

14. Consider walking, biking, or taking the bus to save money on transportation.

15. When it’s time to fill up your gas tank, check out GasBuddy first for the best deals.

16. Focus on quality when it comes to new purchases, so you won’t end up replacing that item every few months.

17. Focus on lowering expenses on housing, transportation and food to create bigger wins.

How to Curb Spending

18. Track every cent you spend for 30 days to get a wake-up call on where your money is actually going.

19. To avoid over-spending on food, don’t go to the grocery store hungry.

20. Always check your receipts for any errors or overcharges.

21. Use personal finance apps that save you money when shopping like EBates or Honey.

22. If you have good credit and are a responsible borrower, get a cash-back credit card.

23. Take out a specific amount of cash for your discretionary spending and stick to that amount each week.

24. Pay off your credit card on time and in full every month.

25. Spend on items and experiences that truly bring value to your life — things that make you happier, make your life easier, etc.

26. Splurge, within reason, on something that you really want.

27. Know your spending triggers, like exhaustion or stress, that encourage you to spend more on things you don’t necessarily need (like retail therapy, eating out, etc.)

28. When making a big purchase, check out several options and compare the prices and packages to ensure you’re getting the best deal.

29. Spend on life insurance now to protect you and your family down the line.

30. Do a spending audit and look for expenses that you can cut completely or somehow lower.

31. Check your insurance premiums and deductibles on home, rental, health and car insurance. Make any changes that can help you avoid overpaying.

32. Understand what all of your insurance really covers and see if there are any gaps that need to be covered.

33. Cut back or eliminate spending on vices like alcohol, cigarettes, or any other substances.

34. Avoid spending traps like the lottery, MLM schemes and more…because you don’t really need flat tummy tea or essential oils.

35. Get receipts for any tax-deductible donations to charities and write them off on your taxes.

36. Avoid impulse purchases by holding off for 48 hours to see if you really want it.

37. Calculate each purchase as hours worked for a different perspective — i.e. that one happy hour will cost me two hours of work.

38. Focus on paying off high-interest debt first to save money on interest (aka the Debt Avalanche method).

39. Review interest rates on all home loans, credit cards, personal loans etc. and know how much it will add to the cost of the loan.

40. Make biweekly student loan payments instead of one monthly payment to save money, as interest accrues daily.

41. When in doubt or distress, talk to your loan servicer or lender and never miss a payment because of hardship.

How to Budget

42. Make sure your income exceeds your expenses.

43. Understand the difference between “wants” and “needs” and budget accordingly.

44. Create a realistic budget based on your current income and expenses. Take into account debt repayment, saving and splurging.

45. Add a miscellaneous category with a $100 buffer for the random and unexpected things that may come up during the month. (Parking ticket anyone?)

46. Track your expenses to stay aligned with your budget, as this is the only way you’ll know if you go over budget or not.

47. Use personal finance apps like Mint or Tiller to help you budget.

48. Have a money date with yourself and/or spouse every week to check in on your finances, track progress on your goals and stay accountable.

49. Check your credit report each year at AnnualCreditReport, as any errors on your credit can affect your interest rates.

50. Read one of the best personal finance books on budgeting, “All Your Worth: The Ultimate Lifetime Money Plan” by Elizabeth Warren to understand the 50-30-20 rule.

51. Practice and start saying “no” to things that don’t align with your values or your budget.

52. Cultivate a sense of gratitude for what you already have to help you curb the desire to have more of the things you don’t have.

53. Check out NextDoor or Craigslist first before buying furniture or other items for your home to save money or get items for free.

54. Switch to a bank account with no hidden fees: no minimums, monthly maintenance fees or overdraft charges (Hint: Chime has all that and more)

How to Earn More Money

55. Check GlassDoor and Payscale to make sure you’re getting paid what you’re worth for your job in your area.

56. Negotiate a raise at work and use that extra money to fund your financial goals, without any lifestyle inflation.

57. Use direct deposit so your funds come to you faster (Pro tip: Chime has a get paid early function!)

58. Review your tax withholding to see if you’re saving too much and giving Uncle Sam a loan from your hard-earned dough.

59. Create another stream of income with a side hustle that focuses on your expertise or passion, like pet sitting, graphic design, writing, tutoring, etc.

60. Rent out your car, parking spot, garage, spare room and more using AirBnB, PaveMint, GetAround and more.

61. Sell the items in your home that you no longer use; donate the rest.

How to Grow Your Money

62. Play the long game and don’t focus on selling stocks with every little change in the market.

63. Understand your risk tolerance based on your current lifestyle and expenses.

64. Have a grasp on investing terms and understand how they work.

65. Know what you’re investing in and have a strategy to get the returns you want.

66. Find a low-cost brokerage with minimal fees.

67. Contribute to a 401(k) and get a match, if eligible.

68. Invest in either a Traditional IRA or a Roth IRA.

69. Set aside and put money in your retirement vehicles every month through automatic transfer.

70. Invest in yourself by taking a class, getting a certificate, etc.

71. Update your investments as your life changes and your risk tolerance changes, such as having kids, getting divorced, etc.

72. Read personal finance books on investing like “The Intelligent Investor” by Benjamin Graham.

73. Take notes from bonafide investor Warren Buffet and invest in low-cost index funds.

74. Protect your financial future and family by creating a will for free using Tomorrow or Fabric.

75. Find the right asset allocation for you to drive your investing strategy.

The Bottom Line

Personal finance can be simple but not easy – at the same time. It’s all about implementing a plan and taking action.

If you want to change your financial life in 2019 (or at any time!), just start where you are with what you have. Don’t compare your journey to anyone else’s. Read personal finance blogs, personal finance books, listen to personal finance podcasts and connect with ideas that ignite your passion for finance. Though it can seem like it’s all about the money, it’s really about affording the life you want and buying your freedom and time.

 

Banks With Free Checking and No Minimum Balance

Bank Fees

It is a fact that banks earn a huge amount of money on fees. A lot of them apply to the checking account and it is one of the most overlooked things in our finances. From opening a checking account, paying monthly maintenance fees and overdraft fees, banks can take more than $350 a year per average household. Some households have reported that after reviewing how much they spend on extra fees they gave away more than $700. Just think of what you could do with that extra money, is it really worth giving it away? With that in mind, it is clear that this is not only stressful but it can be quite a burden, especially for those stuck with stagnant wages and outstanding debt. Aside from the fees mentioned above, there are card replacement fees and ATM fees. There are also penalties for exceeding the daily withdrawal limit on ATMs and additional charges for overdraft if an account has insufficient funds after 5 days. All of these things have to be considered when choosing the correct checking account.

Online advice on how to save money in banking

The real goal is to show how and in what way a person can save some extra cash without paying all of these unwanted fees. The advice offered online is not always good, and it just does not work in real life situations. Many banks offer advice on how to avoid ATM fees and overdraft fees, but be careful. Bank advice is to withdraw money from an ATM less often, withdraw large amounts of cash so it lasts longer, carefully monitor and visit the bank branches to check on your financial status so you avoid overdraft fees and so on… This, in fact, does the trick, but it works only on paper and only a minority of people can do this. For this to work everything must always be constant and if anything unpredictable were to happen, this plan would fall apart and you would still end up paying for fees. Imagine a situation where you have just picked up cash from the ATM for that week and suddenly you realize you forgot about an upcoming event for that weekend. Or if you withdraw your entire paycheck from your checking account at once and then misplace that money somewhere. In this case, you also risk of not maintaining the minimum balance requirements on your account, which would then initiate the monthly service fees. As you can see, it is a constant loop of problems where all of this is certain to cause a lot of headaches for many account holders.

Traditional Banking System

Since the 2008 recession, many things have changed. The economy slowly recovered and the banking system stabilized. The main problem that remains is the traditional way in which the banks operate. The large number of fees, including ATM, that are all connected to the bank account only work in favor of the bank and all the rules created to avoid the fees are complicated and well-designed so the average person will incur additional charges on their checking account. The banks should not be the ones taking our money this way. When you choose a checking or banking account, the bank has plenty of ways to earn money by investing it and turning it to profit, so why all the fees? Easy, answer… More profit. It is on rare occasions we hear the bank has gone broke, especially the large traditional ones. More often is that we read about billions of profit they earn. It is an established fact that the banks earned over $22 billion during the 2016 just from additional banking fees implemented.

Minimum Balance

One way for banks to apply fees is to set a minimum balance requirement for the checking account. This way, if account holders do not meet the minimum required, additional fees like monthly maintenance fee activate. Traditional banks still use fees like this and instead of helping, they are punishing people who do not have the ability to reach their minimum balance. Thankfully, there are new options out on the market that can help us choose an account that has none of the fees we mentioned so far and offer an account with no minimum balance. Online banking is becoming a big thing and it is constantly growing and improving. With mobile banking apps, support, easy to use interface and quality services, new systems are starting to become popular. To go with the tide, traditional banks have also implemented all of the above mentioned, but the thing that remains unchanged are the fees on which these banks so heavily rely on, and very few have a minimum balance requirement for opening a checking account, or off a free checking account with no minimum balance.

Let us compare some of the banks and see what they provide

Options for Wells Fargo Accounts:

Wells Fargo is one of the top 5 largest banks in the US. To open a checking account, you need $25 and there is a monthly maintenance fee of $10. There is a $35 overdraft fee when account has insufficient funds. There are some ways to waive the fees but be careful to read all of the rules on how to do this. One way to waive the monthly checking maintenance fee is the $1500 minimum daily balance and for a student, or someone with debt issues this is not an easy thing to do. There is one positive thing, Wells Fargo gives an option to avoid this fee if you are of age 17-24. The number of ATMs for Wells Fargo is 13,000, but you should always double check if there are ATMs near your home and the places you regularly visit. If this is not the case, you may end up paying an additional withdrawal fee of $3. As for international ATM fee, most of the banks including Wells Fargo have this set to $5 plus 3% from the transaction.

Options for Chase Banking and Checking Accounts:

Chase, one of the Big Four Banks, checking account has a $12 monthly checking maintenance fee and you need a $25 opening deposit. The overdraft fee is $34. With this account, you will have access to 16,000 ATMs connected to Chase checking. When using an ATM that is not from the Chase branch system, the fee is $2.50 and the international ATM is $5 and 3%. Similar to Wells Fargo, Chase offers options to waive the monthly maintenance fee. Consumers can do this by either making a direct deposit of $500 each month, or having a $1500 minimum daily balance, or having a $5000 combined on all your Chase qualifying accounts.

Banking Options for Bank of America:

Bank of America has similar options as Chase. It has 16,000 ATMs, $25 opening deposit and a $12 monthly maintenance fee. The monthly maintenance fee can be waived by making a direct deposit of $250 for each statement cycle, by having a $1500 minimum daily balance or by being a student under 24 years of age enrolled in college. The same as the previously mentioned banks, there is an overdraft fee of $35, a $2.50 ATM fee for using an ATM outside of the branch system and an international ATM fee of $5 and 3%.

Free Bank Account Options for Chime:

Last, we will look at the options for Chime. A Chime account is an online spending account with none of the fees mentioned above. It has no monthly maintenance fee and no minimum balance requirements. With Chime, you also get access to 38,000 fee-free MoneyPass and Visa Plus Alliance ATMs. Chime has a $2.50 ATM fee when not using an ATM machine from its own branch, but this does not occur often. As mentioned above, Chime as many other banks has a great mobile app and search system. This helps find an ATM near you that you can safely use without the fear of getting charge for the service. In addition to this, Chime also has the largest number of ATMs free of fees and spread across the state so wherever you go, you do not need to worry. As for saving money with Chime, the system rounds up the change from every purchase and adds to the savings account, and you can opt for 10% of every paycheck to go to the savings account. We all know that it is a good feeling when we have an additional bundle of cash that we can spend on whatever we please every couple of months.

Banking Account Results

What we see listed above is that all of the traditional, large banks have a $25 opening deposit, $10 or higher monthly maintenance fee, $35 overdraft fee. They all have banking fees for using the ATM outside of its original bank that is either $2 or $3 and an international ATM fee of $5 and 3% of transaction value. As for the number of ATMs, that number is around 15,000. When we compare these stats to the free Chime account, we can see the clear picture. Chime has twice as many ATMs without fees, has no minimum deposit, no monthly maintenance fee, no overdraft fee. The Chime account does have a $2.50 ATM fee but with Chime, there is no international ATM fee. One thing we did not mention in the lists above is the fee for receiving a new card if you happen to lose one. All of the traditional banks have this fee set at $10, sometimes going as high as $25, but Chime issues a new card free of charge. Out of all mentioned above, Chime account is the only option with a checking account that is free. It does not matter if this is the first time you are opening an account or if you are switching to a new account because you were not satisfied. The only thing that is important is to get to know your facts before choosing so you can be certain that you made the best possible choice.

WHAT IS THE BEST CHECKING ACCOUNT OPTION?

It is understandable that things are not always black and white. What works for one group of people does not necessarily apply for another group. There are many examples of this. One person that has a high income and may not be burdened by debt and has no problem with choosing a traditional checking account because they can easily reach all of the requirements to have their fees waived. This way, they can even apply for special checking account programs that offer a lot of benefits with a decent interest rate. The problem is, not all of us have $100,000 just laying around and waiting to be placed in a checking account. So, if you are just starting with your financial independence, it is wise to consider a free account that is not full of so many fees and rules. These may end up complicating your balance if you miscalculate. Chime has a lot more pros when compared with other traditional banks and their systems, it erases all of the problems with online checking and banking advice given on saving money and it automatically saves you some extra cash when you make purchases. In conclusion, the best choice for someone searching for a checking account that is free of charges and has no minimum balance is the Chime account.

 

Best free checking accounts of 2019

Checking accounts

Most people use their checking account as a main tool to receive income, pay bills and make purchases. For many, it represents the foundation of personal finances. The checking account has a link to other financial accounts that people use for money transfers. What people tend to forget is the fact that in the beginning, most of the checking accounts were fee-free. However, this changed and today, account holders from almost every large bank face a hefty amount of fees. These fees cover monthly maintenance, overdraft, card replacement, ATM and international ATM transfers and many more. Here, we will cover the details of what makes a free-checking account free and explain how the banks are actually taking our money to give us our money. As strange as it sounds, this is the way banks function and that is why billions of dollars of profit are reported each year by those same banks just from fees alone. This article will research and compare several fee-free checking accounts that might look best and could be a good account option for the upcoming year of 2019.

Advantages of a free checking account

The banking system in the US currently seems to be using the old traditional ways of banking. Burdening the common consumer with unnecessary fees is one of the things banks do to increase their profit. The only way to avoid the fees is if you have thousands of dollars in your account. Because this is not acceptable to many people, there came a need for alternative ways people can use and manage their finances. Monthly maintenance, overdraft and many other fees are becoming outdated as free checking accounts are making their way to the market. These free checking accounts are designed to have zero fees and have no hidden charges or conditions that complicate your financial life. Some of the benefits provided by the traditional banking system are still tempting to people but after reviewing the terms and conditions, one might come to the realization that it is just not worth it. The need for a free checking account is real, and it is only a matter of time until these types of accounts replace the ones burdened with fees. If you are searching for an account that you can use for paying bills, receiving paychecks, transferring money across accounts, withdrawing cash from a large number of fee-free ATMs and receiving cash-back rewards from several thousands of locations without all the fees, then you need to read this article to examine the best available options.

Highest Annual percentage yield (APY)

Before we begin the comparison, it is important to mention APY and what it represents in the world of banking. You earn this interest by having money in your debit account, or in your savings account. It does require a bit of complex math to do the real calculations but the focus should be on one thing. If the APY is bigger, you earn more money. There are people who judge this as a valuable advantage for a bank, but truthfully, for a checking account, this is not very important. A checking account is a core structure for our in and out flow of cash. With it, we pay our expenses, we receive paychecks, so it is not exactly a main tool we would use to increase our financial balance. There are many different savings accounts and options where we can deposit our money and slowly watch it grow. Searching for a checking account that has the highest APY only makes sense if we can keep the balance on that card around $20000 or more. This means only a minority of people should actually pay attention to the highest APY while most should focus on which banks offer accounts with no fees or those with easily avoidable fees.

Bank offers for checking accounts in 2018

Let us look at options from several large US banks that offer for fee-free checking accounts. It is not rare to see that one bank offers two or even more checking accounts, each with unique specifications that a customer would need. Below, in the offers for Citibank and PNC, you can see that these are not completely free checking accounts but there are great benefits for elderly citizens, so take note if you are of age 62 or older and additionally, check on these two banks.

Chase

Based on the latest research from September 2018, Chase Total Checking Account gives customers many benefits. Because of the $12 monthly maintenance fee, it is not exactly free, but Chase Bank does offer ways to avoid this fee. For the bank to waive the fee, the account holder must have monthly direct deposits totaling $500 or more made to this account or keep a minimum daily balance of $1,500 or more in your checking account. One more way to waive this monthly maintenance fee is to keep an average daily balance of $5,000 or more in any combination of qualifying Chase checking, savings and other balances, but this implies that the person already has accounts affiliated with Chase. Pros for Chase are 5000+ physical branches, solid mobile app for banking online and a $200 sign up bonus. As for the ATMs, the 16000 ATMs does not sound bad, however, always check if there are ATMs available near your place of residence. The APY is low and similar to the rest of traditional banks so the chance to earn through interest with this account is not great.

BBVA Compass

The BBVA Compass ClearConnect Free Checking account has a minimum opening deposit of $25. There is no monthly maintenance fee, but to avoid the $3 fee for this service, be sure to opt out the Paper Statements. In addition, with this account you have access to over 55000 AllPoint and BBVA Compass ATMs worldwide so this would be a great choice if you are looking for a checking account with the most fee-free ATMs available.

The BBVA Compass ClearChoice Free Checking account is more suitable for customers who still need access to physical branches. Of course, this means they will be limited to only a portion of states as BBVA Compass has branches in Alabama, Arizona, California, Colorado, Florida, New Mexico and Texas. This account has additional features that all come at a cost but if you choose to opt out, these features of your account will remain with no monthly fee. The number of fee-free ATMs you can use with this account is 12,000 but there is an option for opting to use non-network ATMs free. This comes with a price of $5 per month and returns us to a loop of paying money to get our money. Neither one of these offers any APY rates, so there is no ability to earn interest using the BBVA Compass free checking accounts.

Chime

One of the best free checking accounts available is the Chime account. It is widely popular with the generation that wants to do as much as they using their smartphones. It has great online banking options and easy to use mobile apps. With a Chime account, you actually have a checking account and a savings account. There is access to over 30,000 fee-free ATMs and there are over 30,000 cash-back locations you can use. The pros for Chime are numerous. There is no monthly maintenance fee, no minimum balance requirements, no overdraft fees and no minimum opening deposits. Same as the banks mentioned above, Chime provides a low APY of 0.01% for the saving account but as we mentioned before, this should come secondary when looking for an optimal fee-free checking account. Still, even without earning interest and increasing balance, Chime does have a way to help account holders to save through each purchase by rounding up the remaining cents to a dollar and sending them to a savings account. Additionally, there is a free option to transfer 10% of the paycheck to the savings account each month automatically. One more thing worth of mentioning is the ability to receive your paycheck up to 48 hours earlier.

PNC

The PNC Standard Checking account has a $7 monthly service fee, but if you can meet a certain requirement, you avoid this fee. These requirements include making a $500 amount in direct deposits per statement year, or has a $500 average monthly balance on the standard checking account; or if they are of age 62 or older. The overdraft fee is similar as other banks $36 and there is an option for overdraft protection but this feature comes at a price. When opening the standard account, there is a $25 dollars deposit. With this account, you have access to around 9000 ATMs from the PNC network that are fee-free so be sure to check if you live in a place where you can easily find an ATM machine connected to your bank.

Citibank

Citibank gives people an option to open a basic banking package called Simple Checking. This account has a $12 monthly service fee and there are three options to avoid it. To waive this fee, make one qualifying direct deposit and one qualifying bill payment per statement period, or maintain a $1500 combined average monthly balance in eligible linked accounts. The final option is to fulfill the 62+ age requirement. There is an overdraft fee of $34, but there is a $10 per month charge option to activate the overdraft protection system. Citibank has a large amount of ATMs all across the US and with close to 35,000 ATMs, there should be no problem in finding one.

Bank Checking Comparison

Chase Total Checking Account

Monthly service fee: $12 (none if you fulfill one of the needed requirements)

Overdraft fee: $34 (Chase will not charge this insufficient funds fee if the account balance at the end of the business day is overdrawn by $5 or less, and the overdraft fee can be avoided if the account holder makes a deposit or transfers funds to cover the overdraft before the business day ends)

Mobile app: iOS & android (rated good)

Minimum opening deposit: $25

Earn interest (APY): 0.01%

Access to ATMs: 16000 ATMs and 5000+ physical branches

The BBVA Compass ClearConnect Free Checking

Monthly service fee: none

Overdraft fee: $38 (there are overdraft safety measures but these all come at a price)

Mobile app: iOS & android (rated solid)

Minimum opening deposit: $25

Earn interest (APY): none

Access to ATMs: No ATM fees at 55,000 AllPoint and BBVA Compass ATMs worldwide

The BBVA Compass ClearChoice Free Checking

Monthly service fee: none

Overdraft fee: $38 (there are overdraft safety measures but these all come at a price)

Mobile app: iOS & android (rated solid)

Minimum opening deposit: $25

Earn interest (APY): none

Access to ATMs: 12000 BBVA Compass fee free ATMs (available option for $5 per month to use non-network ATMs)

Chime Account

Monthly service fee: none

Overdraft fee: none

Mobile app: iOS & android (rated excellent)

Minimum opening deposit: none

Earn interest (APY): 0.01%

Access to ATMs: 30,000 fee free ATMs (interesting to note that Chime will not charge for using an ATM out of its network, but there is chance the ATM service provider will)

PNC Standard Checking

Monthly service fee: $7 (waived if account holder meets one of the requirements)

Overdraft fee: $36 (price account holders can activate overdraft protection)

Mobile app: iOS & android (excellent for iOS, average for android)

Minimum opening deposit: $25

Earn interest: 0.01%

Access to ATMs: 9000 ATMs from PNC fee-free network

Citibank Simple Checking

Monthly service fee: $12 (waived if account holder meets one of the requirements)

Overdraft fee: $34 (option available to activate overdraft protection for $10 per month)

Mobile app: iOS & android (rated very good)

Minimum opening deposit: none

Earn interest: 0.01%

Access to ATMs: 3500 ATMs from the Citibank network (as mentioned above, special perks for elderly citizens ages 62 or older – no ATM fees for non-network transactions)

No Monthly Fee Results

From this, we can see that for the year 2018, there is a clear difference between traditional banks and their alternatives. More online banking accounts are becoming available and Chime is one of them. From the beginning, Chime stands out as an account with zero fees and no hidden charges. Compared to many others where you must meet loads of requirements, there are options that do not force us to calculate until our head starts to hurt. As time goes by, more and more free checking accounts will become available and in the future even traditional banks will have to turn to completely free checking accounts. For now, however, they are slowly starting to catch up to the new and improved banking systems. Among the online banking accounts, new options are appearing and will need to be researched further. For Chime, it is clear it has solidified a strong position in the world of online banking with no fees, which will continue into the next year where the Chime account will definitely remain in the top 10 free checking accounts.

Free Checking Comparison

For the comparison and choosing of the best option for a free checking account for the following year, we used several services that the banks provide for their checking accounts. We did however mention that some banks have special no banking fee offers for citizens that are age 62 or older but there are many more we did not mention. Bank offer these specific accounts that apply and provide benefits only for a selected group that do not represent the majority. Certain banks offer great bonuses and higher APY for local residents of a specific state or part of the state. Others offer possibilities to waive all fees for military veterans. Some even offer special treatments for those enlisted in certain colleges or have sport scholarships. To include all of these would complicate things and make the research impractical. It is already hard enough to determine which option is actually best for each individual, but with this comparison above, we can observe the pros and cons of alternative banking options compared to the traditional ones.

CHECKING ACCOUNTS CONCLUSION

Even though we are in an era of vast technological breakthroughs, there is still a large window for banking expansion and improvement. The banking system should be working for the people and not using tricks and hidden fees to take money from a person that chose it. Better options are arising, new financial systems are appearing and people are not limited to pick one out of only five existing national banks. Truth is, we can never be completely certain if we make a good choice, but if we do our research, we can lessen the damage. Always make sure you know what your priorities are and choose your account according to that. Pick the best bank account that suits you and always plan ahead. It is not the worst thing if you are not satisfied with your initial choice, the worst thing is not trying to correct the mistake. Just be careful not to switch to a new bank too soon as some of the large traditional banks like PNC still have a $25 fee for closing their account before the first 180 days from opening. Good luck!

 

Beware of These 6 Holiday Budget Breakers

Classic Christmas movies like to depict the holidays as a time of cheer, warmth, and blissed-out festivities with loved ones.

But the reality? Holiday blues can emerge full-throttle. Plus, awkward scenarios with the fam and the stress of travel and last-minute shopping can up the anxiety levels. And when it comes to your pocketbook, the holidays can be a season of utmost terror. In 2017, Americans racked up more than $1,000 in holiday debt, according to a survey.

What’s worse, only half of those surveyed said they planned to pay down their debt in less than three months. The rest? They expected that debt to linger for five months or more. Frightening? You betcha.

But there’s a silver lining: By being mindful of common culprits that devour your money, you can avoid the plunging depths of holiday debt hangover (HDH).

Here are 6 budget breakers to beware of – and how you can avoid them.

Pumpkin Spice Lattes

Oh, these autumn treats are so-very-delicious, yet dangerous to thee pocketbook. Whether it’s a Jack Skellington Latte, apple cider donuts, or pumpkin scones, these seasonal favorite drinks and goodies can really do you in financially. Even five bucks a day during the week for two months adds up to $200.

We get it. The colder climes may send you into cozy nesting mode, making it even more tempting to splurge on sugary, warm libations. Plus, since you’re donning heavier coats and oversized sweaters, who will even notice that bit of extra padding around your waistline?

How to Avoid HDH: While it’s unrealistic to deny yourself a pumpkin spice latte during the season, set limits. For instance, commit to just one drink a week. Or load up a gift card to your favorite coffee shop, and indulge in seasonal goodies until you’re out of funds.

If you’re afraid of overdoing it, turn on notifications for transactions you make on your Chime debit card. This will keep you in check.

Impromptu Holiday Gatherings

A company holiday party is one thing, but those last-minute happy hour hangs and spur-of-the-moment gatherings with out-of-town friends can really add up. And it’s not just your food and drinks that can be pricey. Because you’re in the giving spirit, you may treat folks to rounds of drinks you may not be able to afford. Plus, to look your festive best, you may want to buy new garb for those holiday soirees.

How to Avoid HDH: Be selective in the gatherings you attend. We all experience bouts of FOMO, but make sure you won’t be paying for that nice dinner six months later. And there’s nothing wrong with suggesting a cheaper alternative, such as lunch instead of dinner, or a happy hour.

And when it comes to your attire? Sure, you want to look awesome for the gram. But take it from someone who wore the same four dollar sale dress as a maid of honor and officiant for two weddings. Most people won’t notice if you dust off an outfit.

Another option: Try mixing and matching an outfit that’s already in your closet with inexpensive accessories like a fun tie, cuff links, or perhaps a glittery wrap or stand-out neckpiece. There’s no shortage of discount retailers, from Poshmark to eBay to Nordstrom Rack. And you can also find stylish finds at a thrift store or consignment shop.

Last-Minute Gifts

Yes, I am one of those nerdy people who creates a spreadsheet for holiday gifts. But guess what? It comes in super handy when you’re trying to stick to a holiday spending plan. My spreadsheet includes gift ideas, added costs like shipping, and the amount I can spend for each giftee. So, for a last-minute gift, I first check to make sure I can afford it. If not, I can make adjustments in my current list and free up the cash that way.

How to Avoid HDH: Check that list, and see where you can consolidate. For instance, instead of buying a gift for your Aunt Jenie, Uncle Fred, and three kids, would it be appropo to buy a single gift for the entire fam bam? And instead of getting something for each of your co-workers, what about baking goodies for the entire office to share?

Another way to cut down on your holiday gift-giving is to come up with a no-gift pact. Over the years I’ve done this with my friends and some family members. It prevents any hard feelings, and we can all breathe a shared sigh of relief. My extended family also has a no-gift policy for adults. We just give gifts for the kids.

Obligatory Gifts

We all have people that we feel like we have to buy gifts for. It may be that aunt we see only once a year. Or that cousin we secretly dislike. But if we don’t get them gifts for the holidays? We might be met with awkward silence or “how could you” glares from family members on Christmas morning.

How to Avoid HDH: See if you can skirt around it by suggesting a Secret Santa or White Elephant exchange among the adults. Or give yourself permission to send that distant relative a card. If you’re still feeling a tinge of guilt, then consider spending a bit less than you planned to. Or if you’ve racked up a bunch of rewards points on a credit card, consider redeeming them for a gift card.

Impulse Buys for Yourself

We’ve all done it. During the manic of Black Friday or Cyber Monday, we may trick ourselves into believing we’re purely buying stuff for others. But in fact, we add a few items here and there for ourselves. How can you resist a killer deal, right?

How to Avoid HDH: Set limits. Remember: the best way to save money is not to spend any in the first place. And, once again, set alerts on your banking app for transactions you make with your debit or credit cards.

Overlooked Expenses

Those little overlooked expenses, such as Lyft rides to and from parties, buying gift wrap and bows at the last minute, and babysitting or pet sitting costs can sneak up on you.

How to Avoid HDH: When putting together your holiday budget, don’t forget to include these little expenses. Also, look for pockets of money you may have forgotten about. For instance, don’t forget about that jar of spare change in your closet. Or money you forgot you had in your Venmo or savings account. You can use that spare cash toward these expenses.

Tis the Season to Watch Your Spending

You know full well it’s far too easy to go overboard during the holidays. But, by minding these 6 budget breakers, you can avoid falling into debt. Your 2019 self will thank you.

 

Learn How To Avoid Checking Account Fees

Most Americans own a checking account. And most of the banks who offer checking accounts charge a variety of fees for account holders to use them. What are these fees? Is it possible to bank with paying them? Are there alternatives to traditional banks? We will take a close look at these questions and also compare one of the major multinational banks, Chase, with a new online banking option, Chime, to see who comes out on top in the game of checking account fees.

Checking Accounts – What Is The Purpose Of Having One?

A checking account is a kind of deposit bank account that allows withdrawals and deposits. It can be accessed using checks, setting up an automatic transfer, or using your debit card. Consumers use this account for paying bills and making most financial transactions. For this reason they are referred to as demand accounts or transactional accounts. Another factor that sets this account apart from a saving account is the fact that there are no limits on the number of transactions you can complete in a month. Also, it allows you unlimited deposits.

How Checking Accounts Work

There are two ways of setting up a checking account – at a bank branch or through a financial institution’s website. Once they are set up, you are able to deposit funds. Account holders can use ATMs, direct deposit and over-the-counter deposits. As we have already mentioned, accessing funds is a lot easier with a checking account. Account holders can write checks, use ATMs or use electronic debit or credit cards connected to their accounts.

Even easier, they can set up internet or smartphone applications for making deposits or transfers.The majority of consumers are already informed about the advantages of electronic banking. Advances in this field of banking have made checking accounts more convenient to use. Paying bills via electronic transfers eliminates the need for writing and mailing paper checks. Also, it is possible to set up automatic payments for routine monthly expenses.

What To Consider Before Opening A Checking Account

First, it is good to know that banks often offer different versions of the account for different types of clients. This is the first thing that makes a difference in finding the right bank. There are many features to consider before opening a checking account.

Fees: The best account will have no fees or low fees, if possible. Try to find accounts with little to no monthly maintenance fees and large ATM networks tol help you avoid becoming a victim of fine print and ending up with hefty fees.

Service Charges: Banks make much of their money by charging fees, and they can charge you for any number of things. For example, there are charges for duplicate bank statements, PIN generation, demand draft, and account balance updates, among other things.

The best solution to avoid paying non-recurring fees is to explain the situation to the bank. This is a potential option in the case that you are a customer of a big bank. Customer service representatives at big banks are often authorized to overturn hundreds of dollars in charges if you ask them to cancel the charge. However please be aware of one thing – these are usually one-time deals.

Overdraft Protection: Why is it important to choose an account with a lenient overdraft policy? In a situation where you have spent more money than is in your account, the bank may cover the difference. This is known as overdraft protection.

Overdraft protection is one way in which banks make a lot of money to the detriment of its account holders. The less you know the better for the bank. Many banks don’t tell customers about charging for each transaction that leads the account to use an overdraft. For example, if you overdraft your account, you will be charged an overdraft fee for that particular purchase as well as for each subsequent purchase after you’re in the red.

This is not all, be aware of something else. According to the account holder agreement, many banks have provisions stating that in the event of an overdraft, transactions will be grouped in the order of their size, regardless of the order in which they occurred. At the end of the day, the bank will charge a fee for each of the transactions on the day the account is overdrawn. If you do not cover the amount, your bank may also charge you daily interest on the loan.

You can avoid these fees if you choose to link your checking account to another one of your accounts, such as a savings account or line of credit. Another way is by opting out of overdraft coverage.

Electronic Funds Transfer: With an electronic funds transfer (EFT), it’s possible to have money directly transferred into your account without having to wait for a check to come in the mail. Additionally, when you use your debit card to make a purchase at a store or online, the transaction is processed using an EFT system. Most banks no longer charge to make an EFT.

Direct Deposit: Direct deposit is another form of electronic funds transfer and another feature from which banks are able to benefit. This feature allows your employer to electronically deposit your paycheck into your bank account. Direct deposit is important since it gives the bank a steady flow of income to lend to customers. Because of this, many banks will give you free checking if you get direct deposit for your account.

ATMs: Be aware of fees that may be associated with the use of ATMs. ATMs make it convenient to access cash from your checking account or savings after hours. However, sometimes using an ATM from another bank could result in surcharges from both the bank that owns the ATM and your bank. Nevertheless, surcharge-free ATMs are becoming even more popular. They can be as much as $5 or more in different parts of the country.

Cashless Banking: The debit card provides the ease of use and portability of a major credit card. Anyone who uses a checking account knows how important it is to keep it safe. Many banks offer zero-liability fraud protection for debit cards. This is one way of fighting against the identity theft and a good way to protect your account.

Interest: Those who were thinking about opening an interest-bearing checking account should be prepared to pay plenty of fees. If you can’t maintain a minimum balance, you’ll have to pay a monthly service fee. This minimum amount is typically the combined total of all your accounts at the bank, including checking accounts, savings accounts, and certificates of deposit.

Chase vs. Chime

Chase

Chase is the consumer and commercial banking subsidiary of JPMorgan Chase & Co. It is one of the four largest banks in the United States. Chase does offer basic checking and savings accounts that may be an option for second chance banking customers. The opening deposit fee is $25, and the maintenance fee is $12.

However, you can waive the monthly fee if you meet the required criteria:

  • Direct deposits totaling $500 or more made to this account
  • OR, a balance at the beginning of each day of $1,500 or more in this account
  • OR, an average beginning daily balance of $5,000 or more in any combination of this account and linked qualifying deposits/investments

Chase ATM Fees

That’s just the beginning. When it comes to ATM´s, the situation is pretty much the same. If you have a checking account at Chase bank you will have to pay these fees when using ATM from a different bank:

  • $2.50 for any inquiries, transfers or withdrawals while using a non-Chase ATM in the U.S., Puerto Rico and the U.S. Virgin Islands. Fees from the ATM owner still apply
  • $5 per withdrawal and $2.50 for any transfers or inquiries at ATMs outside the U.S., Puerto Rico and the U.S. Virgin Islands. Fees from the ATM owner still apply

Chase Overdraft Fees

What will happen in case you don’t have enough money in your account, or it is already overdrawn? Chase will charge a fee. In case of insufficient funds, Chase pays an item and then will charge you $34 for each item (maximum 3 Insufficient Funds and Returned Item Fees per day). However, they will not charge you in certain situations:

  • If your account balance at the end of the business day is overdrawn by $5 or less
  • They will not charge these fees for any item that is $5 or less, even if your account balance at the end of the business day is overdrawn

Chase will return an item when your account doesn’t have enough money and charge you $34. In the case where they return the same item multiple times, you will be charged the Returned Item Fee only once for for that item within a 30-day period. The good thing is that these fees do not apply to withdrawals made at an ATM.

It is important to know that you can avoid overdrawing your account by making a deposit or transferring funds to cover the overdraft before the business day ends. Here are the options, the places where you can do it:

  • At a branch before it closes
  • At an ATM or when using the Transfer Money option on chase.com, Chase Mobile, or using Chase QuickPay, with Zelle, before 11 p.m. Eastern Time (8 p.m. Pacific Time)

Chime

Chime is an online-based account. There are no brick and mortar locations. Rather, all business is conducted through the internet platform or mobile app. It is free to open a Chime account, with no monthly fee required. That means you aren’t required to put any money in to start or to keep a certain amount of money in your account to avoid a monthly fee.

There are no ATM fees to use a Chime issued Visa debit card, so long as you use one of the 60,000 approved machines around the country. There are also no overdraft fees to worry about. If an account is in danger of going into the negative, Chime will simply decline the transaction. No charge, no punishment.

You Can Find A Way Around Banking Fees

This world is full of opportunities. Advances in electronic banking and banking, in general, should make our lives easier. So it makes sense to consider the option of online banking, like Chime. There is convenience as well as the benefit of no banking fees.

 

How To Avoid Checking Account Fees

Financial institutions and retail banks offer checking accounts, also known as a demand accounts or transactional accounts, to allow account holders to access money using checks, cash withdrawals, automated teller machines (ATM), or electronic debit cards. It simplifies the transactions for individuals with its accessibility and automated deposits, payments, and withdrawals. However, some banks charge their account holders a checking fee for their checking accounts. These fees may range from $4 to $20, it varies depending on the bank and nature of checking account.

MyBankTracker, a website that provides financial services and aids to consumers, conducted a survey in 2017 concerning the checking account usage in the United States. They found that 13,347 or roughly 67% of 21,186 respondents had less than $1,000 available in their checking accounts. Moreover, the data showed that Americans contributed an approximate $3.5 billion in monthly service fees to the top U.S. banks – Bank of America, Citibank, Wells Fargo, Chase, and U.S. Bank. Additionally, the average monthly fee for checking accounts of multinational banks is $10.99 a month, while the minimum maintenance balance to waive the checking fee is $1,500.

Avoiding Bank Fees

Generally, the primary way to avoid monthly bank fees is to maintain the required minimum balance in your accounts. The minimum balance requirement of most banks in the United States for standard checking accounts is anywhere from $100 to $1,500. Additionally, account holders can waive fees through the following methods:

  1. Direct Deposits – direct deposit is the electronic transfer deposit from an employer or benefits provider (social security or pension) to the account of the recipient. Many banks will waive monthly fees if the account holder makes a certain number of regular deposits.
  2. Debit Card Purchase – account holders can often waive monthly fees by making a certain number of purchases or payments using their bank issued debit cards.
  3. Customer Age – many banks do not charge fees to customers under the age of 21. However, once they attain the legal age, financial institutions will require payment on their accounts. Some banks offer a variety of checking account especially for teens with provision from an adult.
  4. Overdraft Protection – banks have mechanisms in place to prevent account holders from spending more money than they have. Those mechanisms often require hefty fees, though. The best way to avoid them is to opt out of overdraft protection and to link your checking account with a savings account or line of credit to cover any instances of overdraft.

Comparing Two Banking Options

The question becomes, is it really possible to use banking services in the United States without paying checking account fees. We will now take a closer look at two banking options to see what consumers face. The traditional bank, Wells Fargo, offers services similar to its main competitors and charges a variety of fees to do so. The modern non-traditional banking account, Chime, offers the same kinds of services but does so without fees or brick and mortar locations.

A Closer Look At Chime Accounts

Chime offers an alternative to traditional banking. These accounts operate entirely online. There are no brick and mortar locations. As a result, there is virtually no overhead for Chime to operate. This equates to no fees for account holders. Customers can open both checking and savings accounts. They can make deposits, do online bill pay, transfer funds, check balances, and budget their finances all online. Chime also issues Visa debit cards for customer use. Chime offers an online platform as well as an award winning mobile banking app. So account holders can access their accounts any time and from anywhere.

Chime has no minimum opening deposit, no monthly maintenance fees, no minimum balance requirement, no overdraft fees (charges are simply declined if they would put an account in the negative), no ATM fees (for in-network withdrawals), and no card replacement fees. There are no hidden fees either.

A Closer Look At Wells Fargo Accounts

Wells Fargo offers five different personal checking accounts to its account holders — Opportunity Checking, Everyday Checking, Teen Checking, Preferred Checking, and Portfolio. All types of Wells Fargo checking account require a minimum of $25 deposit to open and conditions to waive the checking account fees.

Opportunity Checking

This checking account comes with online banking where account holders can view their balances, transfer funds, and statements online. They also have free access to the Wells Fargo Online Banking with BillPay and My Spending Report with Budget Watch to track their finances and expenditure. Wells Fargo also offers a platinum debit card for everyday purchases and bill payment for participating retail shops and providers online or via smartphones and tablets. Account holders also get free access to Wells Fargo branches and ATMs nationwide. Opportunity Checking guarantees a zero liability protection for unauthorized debit transactions, 24/7 fraud monitoring, account alerts for low balances and suspicious activities, and a debit card with a unique security code for fraud protection.

The Opportunity Checking is best for lower account balances with the lowest monthly service fee, and individuals who are unable to open standard accounts. The minimum opening deposit for Opportunity Checking is $25, while the monthly service fee is $10. However, account holders can waive the monthly service fee during each period with:

  • A minimum daily balance of $1500, or
  • Direct deposit with a sum of at least $500, or
  • At least ten debit card payments which include purchases using signature, PIN, online, and phone or mobile wallet. Wells Fargo does not include ATM and ACH (Automated Clearing House) in debit card transactions.

Everyday Checking

Everyday Checking is suitable for a variety of customers including college students from 17 to 24 years old with low account balances. It offers online bill payments and transfers, mobile deposit, security-enhanced chip platinum debit card, text banking, budgeting, expenditure, and cash flow tools, 24/7 customer service, text banking, and access to ATMs. Everyday Checking also includes Wells Fargo Mobile where account holders can check their balance, pay bills, or transfer money through smartphones and tablets via the Wells Fargo Mobile application. Moreover, the members can send money to anyone with a bank account from the United States without sharing their account numbers.

The minimum opening deposit for Everyday Checking is $25, and the monthly service fee is $10. To waive the fee, account holders have the option to do one of the following each statement period:

  • The principal account holder is 17-24 years old. Wells Fargo will impose the standard monthly fee on the 25th birthday of the account holder, or
  • A minimum of $1,500 daily balance, or
  • At least ten debit card purchases and payments, or
  • A total of at least $500 direct deposit from pension, social security, or salary, or
  • A linked Wells Fargo Campus Debit Card or ATM for college students.

Teen Checking

Wells Fargo offers a Teen Checking account for adolescent individuals from ages 13 to 17 (ages 13 to 18 in Alabama) with an adult account co-owner. It allows teens to spend money using their debit cards or ATMs independently with the proper guidance of their parents in withdrawals and purchases. Some benefits that Teen Checking holds for its primary owners are 24/7 online access to manage their accounts, accessibility of money management tools to develop their budgeting skills, and an online alert and notification via text message or email. Parents have the ability to evaluate the account activities of their child, transfer funds from their account to their child’s, and to enroll in the optional Overdraft Protection from their Wells Fargo savings account to avoid unintended overdrafts.

There is a $15 overdraft fee for every deficiency on Teen Checking account. The minimum initial deposit to open a Teen Checking account is $25, but there is no monthly service fee.

Preferred Checking

Preferred Checking is appropriate for customers who want to earn interest, who maintain higher account balances, and Wells Fargo Home Mortgage holders. Account holders can earn interest with a balance of at least $500 in their checking accounts and can receive a discount of $10 on personal style checks. It comes with a security-enhanced chip platinum debit card, 24/7 customer service, online bill payments and transfers, mobile deposit, tools for the budget, expenditure, and cash flow, and text banking.

There is a minimum $25 initial deposit to open a Preferred Checking account and a $15 monthly service fee. Wells Fargo can waive the charge if the account holders meet one of the following during the statement period:

  • A total of $10,000 in minimum deposit balances, or
  • A sum of at least $1,000 direct deposits from social security, salary, and pension, or
  • A connected Wells Fargo Home Mortgage.

Portfolio Account

This type of checking account is designed for customers who carry high balances. It has an interest rate discount on personal loans, home equity credit (subject to approval), and auto loans. It also comes with a personal credit card from Wells Fargo Visa, chip technology-enhanced platinum debit card, and an annual relationship bonus for Wells Fargo Propel World American Express Card. The Portfolio Account has no monthly maintenance fee for secondary linked accounts, no fee for bank services including Wells Fargo Personal Wallet checks, Overdraft Protection advance fee, and money orders. There are also added benefits, particularly for customers with a total qualifying balances of at least $250,000 or the Wells Fargo Plus holders such as waived fees for services, reimbursement of ATM fees, and no Overdraft Protection transfer fee.

The minimum initial deposit for opening a Portfolio Account is $25, and there is a monthly service fee of $30. Wells Fargo can waive the service fee if the customer meets one of the following requirements during the statement period:

  • At least $25,000 in qualifying connected bank deposit accounts, or
  • At least $50,000 qualifying linked brokerage, credit, and bank balances.

Can Those Pesky Fees Be Avoided?

It appears that there is a way to avoid fees associated with checking accounts. One way is to follow the advice of always maintaining a positive balance in your account. Even if you do so, though, you could still be hit with some other hidden fees from your traditional bank. Another option is to open a non-traditional banking account with Chime. With this type of account, you will never have to worry about a negative balance or about hidden fees. There simply are none.

 

What Is An Overdraft Fee?

In recent years, several reports from professional publications and media outlets have revealed an epidemic that is affecting bank consumers in the United States. The Consumer Financial Protection Bureau reported that U.S. account holders spent a total of $33 billion in overdraft fees in 2016. On average, one out of ten account holders spent more than a thousand dollars for overdrafts and approximately $300 on other bank fees.

Multinational financial institutions charge hefty overdraft fees on their consumers – an average of $34 per transaction, which is equivalent to a 17,000% overdraft loan. Meanwhile, the Pew Charitable Trusts stated in a recent study that some of the smaller institutions follow the price model and multiple fee charges of major banks. The result showed that 68% of the 40 million banking consumers prefer a denied transaction, rather than spending for overdraft fees.

These numbers have significantly influenced the profits of various monetary institutions while becoming a burden to cash-strapped consumers.

What is an Overdraft Fee?

Banks charge penalty fees for individual consumers who withdraw, spend, or make purchases more than the available balance in their accounts. This penalty fee is called an overdraft fee, and it is essentially a fine to cover the cost of the transaction.

Types of Bank Overdraft Fees

Listed below are four types of overdraft fees besides the standard overdraft charge of most banks.

1.    Overdraft Fee

The Overdraft Fee occurs when consumers purchase an item that exceeds their available account balance. It is the most common fee that banks impose on checking accounts, and they may limit the number of transactions per day. Several banks offer numerous overdraft services which vary by institution.

The average overdraft fee for major banking institutions, like Citibank, TD Bank, Wells Fargo, and Chase is $34 per item. There are alternative banking accounts, such as Chime and Simple, that do not charge an overdraft fee.

2.  Non-sufficient Funds (NSF) Fee

Banks impose a non-sufficient funds (NSF) fee when they decline a transaction which overdraws an account balance. When a consumer issues a payment check with insufficient funds in the account, the bank will reject the purchase and may charge an NSF fee to prevent the account holder from issuing further check payments with no funding.

Most banks charge a similar amount for overdraft and non-sufficient fee. The NSF fees for the Chase Bank, PNC Bank, and Wells Fargo Bank average $35.

3. Overdraft Protection Fee

The Overdraft Protection Fee or the Overdraft Transfer Fee is the payment charge of banks for every fund transfer transaction made to a checking account from a savings account or line of credit. The Overdraft Protection automatically covers an overdraft with the available funds from the linked account or credit card. Several bank institutions consider credit card settlements as a cash advance, so they impose an added cash advance fee of $10 of 3% of the transaction.

Most banks limit the amount of overdraft protection fees, charging only per day rather than per transaction. For example, Bank of America only charges a $10 Overdraft Protection transfer fee per day to their account holders for transferring available funds from their secondary accounts.

4.  Extended Overdraft Fee

An Extended Overdraft Fee, sometimes referred to as “extended overdrawn balance fee” or “sustained overdraft,” is the amount that bank institutions charge on top of standard overdraft fees when account holders leave a negative balance in their account for five to seven consecutive days.

For example, U.S. Bank charges a $25 extended overdraft fee which starts on the eighth calendar day, and each week afterward if the account holder has $0.00 balance.

Why Do Overdraft Fees Occur?

Overdraft fees occur due to various reasons which include the following:

●     ATM   Overdraft – the inability for the ATM to communicate with the bank of the consumer, may lead to authorization despite insufficient balance.

●     Intentional    Loan – the voluntary overdraft of the consumer is called a short-term loan.         ●     Authorization Holds – purchases using a debit card will require the signature of the handler. It will commonly take one to five business days to approve the transaction. However, if a failure of permission occurs, the funds will be accessible to the purchaser which may then create an overdraft when spent.

●     Bank Fees – Many banks have hidden charges which consumers do not expect. These fees are deducted from the balance of the account holder which can lead to insufficient funds or zero balance.

●     Identity Theft – Fraud can cause an overdraft, especially if criminals subject an account holder to forgery, account takeover, or phishing.

How Much Do Banks Charge For Overdraft Fees?

Although the cost of an overdraft fee varies from one institution to another, some banks do not charge its consumers for overdraft, while some have easy-to-avoid overdraft fees. However, big banks charge their account holder an enormous amount of overdraft fees which can range from $35 to $40 per transaction.

Banks With No Overdraft Fees

1.  Chime

Chime has no additional fees such as monthly maintenance charges, service fees, minimum balance fees, foreign transactions fees, and most especially overdraft fees. To prevent overdraft, any transactions which would result in a negative account balance will be declined by Chime.Furthermore, they ensure the account holders that they have no hidden charges for any transactions.

2.    Simple

This bank partnered with two other financial institutions — BBVA Compass and The Bancorp — to provide FDIC-insured checking accounts to U.S. citizens. The founders designed Simple to avoid or minimize overdraft scenarios. It will decline or return any transactions which can cause an overdraft.

Banks With Easy-to-Avoid Overdraft Fees

1.    Capital One 360

Capital One offers a variety of products and services such as checking and savings account, money market online, credit cards, auto loans, and overdraft options. It does not charge monthly fees, and they offer free checking and savings accounts with equal interest. However, its overdraft fees are quite high compared to other banks, which is why they included the Free Savings Transfer as an overdraft protection option. This feature allows Capital 360 to withdraw money automatically from the linked savings account if the balance of the account holder dips to zero. They ensure their consumers that there will be no charge in using the Free Savings Transfer.

2.  TIAA Bank

TIAA is a Florida-based bank that provides numerous services from investing, banking, and mortgages in the United States. They also offer overdraft protection for purchasers who have insufficient balance in their accounts. To avoid overdraft fees, the account holder should register in High Yield Savings or Money Market accounts and link it with the Interest Checking accounts. However, TIAA Bank will only transfer money from the savings report in $100 increments, so if the account has an insufficient balance and cannot provide the minimum of $100, the bank will charge a $25 overdraft fee on the account holders. Furthermore, the feature only applies to debit transactions and checks.

Banks With Overdraft Fees

1.  Wells Fargo

A multinational California-based financial bank equipped with extensive access to ATMs and efficient online and mobile banking experience. When Wells Fargo consumers purchase products with an insufficient balance on their debit cards, the bank will decline to the purchase. However, Wells Fargo charges their check account holders a standard overdraft fee of $35 with a maximum of three transactions a day (up to $105). They do not charge their customers an extended overdraft fee if their accounts remain negative or maintain a zero balance.

2.  PNC

PNC provides an Overdraft Protection service which allows their account holders to link their PNC accounts to their respective PNC checking accounts. Usually, PNC pays overdrafts for checks, checking account payments, and automatic bill payment transactions on a case-to-case basis. The overdraft policies of PNC include a $36 overdraft and returned item fee with a maximum of four transactions a day (up to $144). Meanwhile, an extended overdraft fee of $98 ($7 per day) for 14 days will also apply if the available balance of an account holder stays on the red line for five consecutive business days.

How to Avoid Overdraft Fees?

Here are some tips to avoid costly overdraft fees on bank transactions.

1.  Link Checking Account to a Savings Account

Financial analysts have advised account holders to link their checking accounts to their savings so that their own money, rather than the bank, will cover the deficiency.

Chime offers a feature which enables its account holders to connect their external accounts to the Chime Spending Account by logging into their online accounts. The process is simple. Select Move Money and tap Transfers. A prompt will appear on where consumers may input their other bank account information to link into their Spending Account.

Chime allows transfer fees of $200 a day and $1,000 a month, which will be available within five business days. Moreover, it supports a variety of external accounts including Wells Fargo, Bank of America, US Bank, Citi, PNC Banks, and Capital One 360.

2.  Sign Up For Call Or Email Notifications From The Bank

Getting an alert from the bank will aid the consumers to keep track of their transactions and account balance. It will prevent the account holders from making transactions which can lead to unintended overdrafts.

The Chime mobile app will notify users immediately of transactions made on their accounts.

3.  Consider Opting Out of Overdraft Protection

Several bank institutions offer overdraft protection which guarantees its consumers a lower fee of $10 to $12.50 per transfer compared to an average of $35 overdraft or non-sufficient funds (NSF) charge. It also ensures purchasers that businesses will not reject or decline a normal overdraft transaction.

Lawmakers created a federal law in 2010 which made opting out overdraft protection services as the default option for consumers. This action can lessen the overdraft fees for account holders when their balance is insufficient.

4.   Avoid Spending More Than the Available Balance

The most convenient way to steer clear of overdraft fees is to avoid spending more than the available account balance. This, of course, requires you to keep up to date with your current balance.

Mobile banking offers an easy solution to this problem. With accounts like Chime you can check your account balance at any time from anywhere.

 

Chime vs. Rize

In today’s technology driven world, apps are all about making your life easier. Need dinner but too tired to cook? You can Postmate your next meal. Need a gift ASAP? Amazon Prime it.

The personal finance world has also embraced technology to simplify your life. There are even automatic savings apps that can help turbocharge your savings and make it effortless.

To learn more about what’s out there, let’s take a look at Chime and Rize. These options can get you on the right path to saving without the hassle. Read on to decide which of these apps is best for you.

Chime

Chime is a fee-free bank that is mobile-only and offers great automatic savings features. If you sign up as a Chime member and open a Spending Account (like a checking account), you can also have a Savings Account with sweet automatic savings features.

Using Chime, users can round up all of their purchases to the next dollar and save that change. In other words, you get rewarded every time you spend and the additional savings helps balance out some of your spending.

Let’s say you go out to lunch and spend $12.35. In this case, you’d pay $13 yet 65 cents would be deposited into your Savings Account. It may not seem like a lot but you have to think about the compound effect. It’s not just saving this time but it’s saving every time you spend money. This kind of consistency is what successful saving is built upon.

Aside from rounding up, you can also automatically save when you get paid. You may have heard that you should “pay yourself first” and Chime takes this to the next level by ensuring that you are saving the basic recommendation of 10 percent of your earnings.

One last thing: Chime is not only an automatic savings app but a fee-free, full-service bank account that can help you better manage your money.

Rize

Another automatic savings app on the market is Rize. Rize is an app that can help you save for short and long-term goals.

Using Rize you can set an unlimited amount of goals and save automatically. Want to save for your next trip and your next car? How about your daughter’s college fund and your birthday? You can save for all of the above – at the same time – using Rize.

The good thing about Rize is that you set up your own savings schedule and earn interest on your deposits. Rize currently offers 1.43% in interest. Chime also offers a tiny bit of interest on Savings Account deposits with an Annual Percentage Rate (APR) of .01%.

Yet, Rize is different from Chime in that it also helps you invest. For example, if you’re saving for long-term goals, Rize will actually invest your money into exchange-traded funds, which are a mix of stock and bonds, as well as cash. This enables you to “invest smarter” and put your money to work for you. It’s important to note that there is a 0.25 percent fee when investing for your long-term goals. Compared to many financial advisors that charge a one percent fee, this is pretty low-priced and competitive.

Aside from this, you can also supercharge your savings using Rize’s ‘Accelerator’ feature, which helps users increase their savings by one percent each month. Rize also has a ‘Boost’ option. This feature transfers spare change up to five dollars or five percent, whichever is less.

Lastly, Rize has a unique ‘pay what you want’ model. This means you can contribute a few bucks a month or nothing at all – if that’s what you wish. The app does recommend paying at least two dollars per month to access the investing part of Rize.

Chime vs. Rize: Which one is better?

Chime and Rize each have their own benefits as automatic savings apps. Chime is a great option if you’re looking to save for a rainy day while also accessing fee-free banking. Rize is a bit more robust in that you can save and invest.

If you want to try one app first, you may want to go with Chime, especially if you’re looking to ditch a big bank while also automating your savings in a simple, effective way. But, if you’re looking to maximize your long-term savings goals and do more than save for a rainy day, Rize could be the better go-to option for you. Since Chime is a fee-free bank and not just a savings app, you could use both Rize and Chime together to save and invest for your short and long-term goals.

Whatever you decide to do, the key is to get started with an automatic savings app. This way you’ll save more money – effortlessly.

 

Are There Any Totally Free Checking Accounts?

When you begin a new career, a major concern is making your salary last until the next one comes along. A lot of people have a hard time managing their finances because they do not have a proper way of managing and saving their money. Some are not aware that they are already spending more of their pay than they should. Overspending can lead to other problems like inability to pay the bills, for example. Not a good way to be financially stable, right?

So how do you avoid those kinds of problems? That’s where banks come into the picture. Some people may doubt their money’s safety, but keeping money in the bank is a lot safer than just hiding it in your house. It is less likely to get stolen or lost and more importantly, banks help you manage your finances wisely with the use of their banking accounts.

Banking fees, unfortunately, can pose a big problem for consumers. It’s just not ideal for some. There are fees which can be avoided temporarily but not permanently. Wouldn’t it be nice if there was a solution to avoiding banking fees completely, like a totally free checking account?

Do You Really Need A Checking Account?

A bank account lets you have the freedom to budget your money according to your spending habits. Bank statements allow you to keep track of your transactions and see how you use your money. You might be scared of putting your money in a bank, but it’s a lot safer than keeping it in your own home where there’s a higher chance of losing it or get stolen. Also, without a bank account and card, carrying your cash everywhere is probably not a good idea.

A checking account may be the best bet for fresh graduates or first-time employees. It is a basic financial management tool that helps young adults to keep their money in order to pay the bills, groceries, and other things. Even without cash in hand, you could still use your checking account as a form of payment. Why give yourself the trouble when you can just carry a debit card instead?

The Right Account For You

Checking is the type of bank account that is perfect for those who value convenience when it comes to their money. A checking account comes with a debit card which is probably the most convenient and easiest way to pay. Most businesses and services now accept it as payment for their goods. It automatically debits the payment straight from your account and deducts it from your available balance. Debit cards are more suitable for day-to-day expenses.

A checking account also creates a safe place for your pay be directly deposited. Nowadays, most banks offer this option to their consumers. It is especially useful when managing your finances since the direct deposit feature allows you to receive your pay earlier than usual. You won’t even have to wait for your employer to give you your paycheck and then line up at the bank to deposit it.

Some advantages of owning a checking account:

  1. It is safe and secure. Keeping your money in your checking account at a bank guarantees better safekeeping and accountability..
  2. It is very convenient. A checking account offers checks or a debit card as forms of payment. Both methods are widely accepted by stores and merchants. You also get a record for each transaction so it makes things easier to manage.
  3. It is very accessible. Banks are now using the internet and smartphones for banking purposes. Almost every bank has their own mobile applications and websites where you can easily access your account through your smartphone or your computer.

While these are great advantages of having a checking account, there are also disadvantages.

Maybe the most common reason why people steer clear of a checking account is the banking fees that come with it. The fees that are included are overdraft fees, monthly maintenance fees, minimum opening deposit, ATM fees, foreign transaction fees, and card replacement fees.

Choosing a Bank

Another important consideration before opening a bank account is which among the many banks are you willing to put your money in. It is essential to pick a bank where you feel safe and what they offer is aligned with your interests. Not all banks are the same so it would be great if you compare each bank and list their pros and cons.

Let’s look at some of the major traditional banks which offer checking accounts for their consumers. Namely Chase, Bank of America, Wells Fargo, Citibank, PNC, and BBVA Compass.

Chase Bank is a subsidiary of JPMorgan & Chase Co. and currently the largest bank in the U.S. in terms of total assets with $2.53 trillion. The second largest bank in the U.S. with $2.28 trillion total assets is Bank of America with its headquarters found in Charlotte, North Carolina. Wells Fargo is the third largest bank in the U.S. in terms of total assets with $1.95 trillion and its headquarters is found in San Francisco, California. Citibank is a subsidiary and the consumer division of the multinational company, Citigroup, and is currently the fourth largest bank with $1.84 trillion total assets. PNC is the 9th largest bank in the U.S. with $380.77 billion total assets and its headquarters is found in Pittsburgh. BBVA Compass is a subsidiary of the Spanish multinational company, Banco Bilbao Vizcaya Argentaria, and it is headquartered in Birmingham, Alabama.

These banks all have their own checking accounts that they offer to the public. They also have mostly the same features and the only difference among them are the fees included. Some banks may offer lower fees and some may have higher ones. Either way, the bottom line is that every major bank imposes charges for their checking accounts. They have the same banking fees and they only differ on the amount. The question is, how do these fees affect you and your money?

What In The World Are These Checking Fees?

Banking fees sound like a nightmare for people who want a healthy financial life. Who would want to lose money on unnecessary fees? Most of the time, consumers don’t even realize they are paying them until they see their bank records.

But what exactly are these banking fees? Let’s go over the common checking account fees one by one.

Checking Account Overdraft Fees

Overdraft fees are one of the problematic fees which consumers encounter in checking accounts. These fees are charged when you withdraw money greater than the available amount in your account. BBVA Compass charges the highest overdraft fee with $38. Next is PNC which charges a $36 overdraft fee per item. Bank of America and Wells Fargo both charge $35 overdraft fee per item, while Chase and Citibank have a $34 overdraft fee per item.

Monthly Maintenance Fees for Checking Accounts

Monthly maintenance fees are charged when your balance falls under the required monthly balance at the end of the statement cycle. Chase, Citibank, and Bank of America checking accounts have a monthly maintenance fee of $12, while Wells Fargo has a $10 monthly fee. PNC only has a $7 monthly service charge and BBVA Compass does not charge. However, monthly maintenance fees can be avoided. Some banks require a minimum balance at the end of a statement cycle or a certain amount of direct deposits.

Minimum Opening Deposits

Minimum opening deposit fees are what you pay when you first open an account. Chase Total Checking Account, Bank of America Core Checking Account, Wells Fargo Everyday Checking Account, PNC Standard Checking Account, and BBVA Compass ClearChoice Free Checking Account all require a $25 minimum opening deposit fee. Only Citibank Simple Checking Account does not require any deposit for opening an account.

ATM Fees

ATM fees are imposed when you withdraw money from a different bank other than yours. Chase, Citibank, Wells Fargo, and Bank of America all have a $2.50 out-of-network ATM fee, while both PNC and BBVA Compass have a $3 out-of-network fee.

Foreign Transaction Fees

Foreign transaction fees occur when money is withdrawn from ATMs outside the country. Citibank has the lowest foreign transaction fee with $2.50 plus 3% of the amount per withdrawal. Next is BBVA Compass with a $3 plus 1% of the amount per withdrawal. Chase, Bank of America, Wells Fargo, and PNC all charge $5 plus 3% of the transaction amount per withdrawal.

Replacement Cards

In case your debit card is lost or has been stolen, banks require you to pay a fee for it to be replaced. Those who have debit cards from Chase, Citibank, and Wells Fargo get to replace their lost or stolen cards for free. On the other hand, BBVA Compass charges its consumers with $5 card replacement fee while PNC charges the highest with $7.50.

No Escape

To summarize, these major banks we mentioned all have banking fees. They don’t offer a completely free checking account. They may waive some of the fees but it’s not entirely free. Sadly, consumers might not escape them and may be forced to pay them just to have their money in a safe place. Remember that some banking fees are hidden and you may not have any knowledge of them being deducted from your account until you review your bank statement.

An Alternative to Traditional Checking Accounts

With the steady rise of technology, another method of banking has risen: mobile banking. One example of a mobile banking account is the Chime Account. Chime is an online banking account which lets you have your own checking account with only the use of your smartphone or laptop. Best of all, it is completely free. It doesn’t even require you to deposit a minimum fee when you open it. Its checking account is the same as what most national banks offer without the intimidating fees.

If you have your own Chime Spending Account, you will get to enjoy the following:

  • No monthly fees
  • No minimum opening deposit fees
  • No overdraft fees
  • No foreign transaction fees
  • No card replacement fees

The only thing you will be charged is for withdrawals from out-of-network ATMs which is really not a problem since you could just withdraw money from any ATMs that support Visa. In short, there are no hidden charges when it comes to Chime. It’s a truly free checking account.

Also, since Chime is an online banking account, it doesn’t have any brick-and-mortar locations meaning it has no physical bank. It is just you and your phone or computer.

Why Chime is A Good Alternative

The totally free checking account offered from Chime is the real deal. It doesn’t have the same fees that most major banks impose, letting you have more freedom with your money. There are no more fees that will burden you and you get to be more wise in your spending habits with the help of its mobile banking app. Unlike traditional banks, Chime’s service is strictly online which means it’s very accessible and easier especially for young professionals.

Checking Accounts in the Modern Age

recent survey concluded that 4 out 10 Americans use mobile banking and 26% of banking consumers use their mobile phones for this kind of purpose. In the same survey, it also showed that almost half of young Americans gravitate towards the use of mobile banking and even people over 65 years old have chosen online banking as their preferred method. The rise of technology has really made a great impact on how we live and that includes our banking preferences. Which is why Chime is perfect for Americans who rely on mobile banking. With only a few clicks, you could already manage your finances no matter when and where you are.

Chime Checking Accounts Operate Entirely Online

Because of its strictly online platform, Chime lets you take care of your banking from anywhere and at any time. You can monitor your account 24/7. Also, Chime Account offers an early direct deposit feature in which you can receive your salary money two days earlier than the actual pay date. You don’t have to worry about waiting for your paycheck to come in the mail. It also saves you time and effort from enduring long lines at the bank.

Chime is a great alternative for consumers who are not very keen on spending more money on ridiculous banking fees. With Chime, you can enjoy the same benefits as checking accounts from major banks without drowning yourself in checking account fees.

How to Get Started with Totally Free Checking

A totally free checking account sounds amazing. So, are you ready for your own free checking account? Here’s how:

  1. Apply for a Chime Spending Account.

You can do this by simply going to their website and be ready to fill out your personal information.

  1. Download the Chime mobile app.

It’s available for download in the App Store and Play Store for free. Just download the app and register your account. Now you can view your account details and view your transactions.

  1. Deposit money to your account.

The easiest way to put money is through enrolling in direct deposit. When your pay comes, it will automatically be put into your account. There is also the option for mobile check deposits and electronic transfers from other institutions.

  1. And you’re good to go.

Now you can use your account to pay bills or send money to your family or friends. It’s that simple and easy.

Free Checking Account For Real?

In a GoBankingRates survey early this year, it was stated that young millennials from ages 18-24 are more influenced by bank account fees, which led them to open multiple accounts in different banks where there are lower fees. But why would you open multiple accounts when you can just own one completely free checking account? Having more than one account sounds very stressful and might lead you to even more financial problems. Chime offers you a way out of them with its Spending Account.

While some checking account fees of banks can be waived under some conditions, they do not offer completely free checking accounts. Traditional banks use these fees to earn profit to pay overhead and operational costs like rent, utilities, employee salaries, and more.

Opening a checking account with one of the major banks might not be a good idea for young professionals especially with hidden charges that could endanger their hard-earned money. Why burden yourself more with unnecessary fees when you could completely prevent that from happening by applying for a free checking account?

Yes, a free checking accounts exist and one of them is the Chime Spending Account. No hidden fees equal no worries! With Chime, you don’t have to shell out money just to open an account. More importantly, you will be able to manage your finances wisely and not lose sleep on how much money is going to be deducted from your account after every month.

Free checking is real and Chime has it. So don’t think about how banking fees would prevent you from having a good life and a healthy pocket. Instead, apply for your own free checking account as soon as possible.

To know more about Chime and its free checking account features, just visit their website for more information: https://www.chimebank.com

 

 

Which Bank Has The Best Overdraft Limit?

The Pew Charitable Trusts reported that the overdraft practices of multinational and small retail banks in the United States have contributed to the 66 percent of domestic deposits in the country since 2013. The organization documented the research in the Checks and Balances report which showed that several U.S. banks partake in debit overdraft fees. Many account holders stated that overdraft fees reduce their access to lower-cost financial services and put them at loss and theft of their funds.

What is an overdraft?

An overdraft occurs when the account balance of a consumer drops to zero or negative and cannot cover a transaction. Many banks give a credit extension to its checking account holders up to a certain limit. However, some banks also charge its consumers an overdraft fee for every settlement which differs from one financial institution to another.

Types of Overdrafts

Overdrafts are short-term debt or emergency fund that banks provide for their account holders. Consumers can also choose to opt-in for overdraft as long as they meet the requirements of the bank. Today, there are two types of overdrafts that consumers can choose from — authorized overdraft and unauthorized overdraft.

Authorized Overdrafts

In an authorized overdraft, the bank and the account holder have an agreement upon opening an account that there will be a corresponding amount limit that the latter can use on standard payment methods. For instance, a company has an overdraft limit of $5,000, which means that they can spend an added $5000 if their account balance reaches zero.

However, an authorized overdraft usually comes with a fixed interest rate which varies from one banking system to another and the amount withdrawn. Some financial institutions charge their account holders with a monthly or daily fee or a 15-20% equivalent annual rate (EAR).

Unauthorized Overdrafts

An unauthorized overdraft may occur in two scenarios:

-If consumers spend more than what they have in their accounts without acknowledging it in advance

-If the bank agreed for an overdraft, but the consumers exceed the arranged overdraft limit

Unauthorized overdrafts have several fees which include a more expensive monthly fee, daily fee, and transaction fees for cash withdrawal, direct debit, and check or card payment.

Reasons for Overdrafts

Overdrafts occur due to a variety of reasons such as the following:

Intraday Overdraft

An intraday overdraft, also called daylight overdraft, occurs when a particular bank transfers more money than it has in its reserve account. The Federal Reserve Banks operate on Fedwire, a reserve which enables fund settlement for numerous banks. For example, a bank has an asset of $100 million, and the Federal Reserve requires a ten percent or $10 million reserve maintenance. If the bank covers a transaction of approximately $11 million to several accounts, it will create a $1 million daylight overdraft since the bank will borrow from the Federal Reserve to cover the deficit. Daylight overdrafts can destabilize the financial services if several banks engage in such a practice.

Bank Fees

Several banks have hidden charges that create an insufficient balance to its consumers if subsequent deductions occur.

Merchant overdraft

Financial institutions offer unsecured overdraft services to merchants to address their amount overdrawn within the authorized overdraft limit.

ATM Overdraft

An automated teller machine (ATM) may allow cardholders to withdraw cash despite the insufficient balance. Although it can be intentional or unintentional, the consumers may acquire an overdraft if the ATM authorizes a withdrawal even when it is unable to communicate with the bank of the consumer.

Merchant Error

A merchant error is the unintentional human error that occurs if the consumer swipes their card twice or if they incorrectly input their pin. For instance, the purchaser authorizes a transaction of $10.00 which posts to the account as $1,000.

Authorization Holds

Another circumstance that pushes the account holders into overdraft is Authorization Holds. It is a banking industry system where the institution verifies a debit or credit card transaction until the handler settles the acquisition. In this scenario, the bank holds the amount of purchase without cash withdrawal from the account of the consumer. The transaction process can take up to five business days before the handler allows the settlement.

What is an Overdraft Fee?

Banks penalize account holders a hefty amount if they withdraw or make purchases with a negative or zero balance. This penalty fee is called an overdraft fee or the fine attributed to consumers when banks cover for their transactions.

According to an article from CNN Money, three of the biggest banks from the United States, Bank of America, JPMorgan Chase, and Wells Fargo, gained approximately $6.4 billion in 2016 from ATM charges and overdraft fees. This amount was $300 million more than their collated revenue in 2015, yet, no bank shows a hint of minimizing unnecessary charges to customers.

Multinational bank institutions impose an expensive overdraft fee that ranges from an average of $30 to $36. Wells Fargo, Chase, and U.S. Bank have overdraft fees of $35, $34, $36, respectively.

Types of Bank Overdraft Fees

An overdraft fee is a general term for the charges that banks impose for every transaction they cover for a consumer. Banks may deduct a different amount of overdraft fees from the checking accounts of consumers depending on the type of overdraft fee. There are four types of overdraft fee that consumers may encounter on their settlements — Overdraft Fee, Non-sufficient Funds (NSF) Fee, Overdraft Protection Fee, and Extended Overdraft Fee.

1.    Overdraft Fee

The most common bank fee which occurs when account holders purchase a product that exceeds their account balance. The overdraft fee for financial entities in the United States varies by institution. Moreover, banks limit the number of transactions per day for consumers. Typical overdraft fees are between $34 and $35..

2.    Non-sufficient Funds (NSF) Fee

Insufficient funds occur when account holders make a transaction with a zero or negative balance in their checking accounts or debit cards. Most banks penalize similar amounts for NSF and overdraft fees. Chase Bank, Wells Fargo, and PNC Bank charge a non-sufficient funds fee of $34, $35, and $36, respectively, to their account holders.

3.    Overdraft Protection Fee

Financial institutions charge a significant amount of Overdraft Protection Fees for every fund transfer transaction made from a credit card or savings account to a checking account to cover insufficient funds. Some bank retailers also consider a credit card settlement as a form of cash advance, so they charge an added fee of $10 or 3% of the transaction amount.

4.    Extended Overdraft Fee

The Extended Overdraft Fee, or sometimes called as the “extended overdrawn balance fee” or “sustained overdraft,” is the penalty that banks impose on top of the standard overdraft fees when consumers leave their checking account with a negative or zero balance for a number of consecutive days.

For instance, the U.S. Bank has an additional extended overdraft fee of $25 to account holders which starts on the eighth calendar day and each week afterward. On the other hand, JPMorgan Chase charges a $15 extended overdraft fee (even if the account is overdrawn by $5 and below) if a particular statement has $0.00 balance for five or more consecutive days.

Are Overdraft Fees Illegal?

The Federal Reserve implemented a federal law in 2010 which altered the overdraft practices and credit unions of financial institutions. They stated that banks should decline transactions if the consumer has an insufficient balance. The Overdraft Protection Law prohibits banks from automatically charging its account holders overdraft fees from ATM withdrawals and one-time debit charges. Consumers can opt-in to an overdraft coverage and service if the bank offers overdraft protection.

The Overdraft Protection Law only covers pre-authorized transactions which are not authorized.  These include ATM cash withdrawals and debit card settlements. Meanwhile, the federal law does not apply to automated bill payments, checks, and money transfers. Banks can still charge an overdraft fee to such transactions.

How to Avoid Overdraft Fees

Listed below are useful tips to limit and avoid overdraft fees and overdraft programs.

1.    Link Checking Account to Secondary, Credit Card, or Line of Credit Accounts

Financial analysts and experts advise account holders to connect their primary checking account to their savings or credit card to cover the deficiency of the transaction. This allows customers to avoid any unwanted and unnecessary overdraft fees.

2.    Set Up a Daily Account Balance Notifications and Alerts

An alert from the bank will aid the account holders to track their balance and transactions. If consumers are conscious of their available balance, they can transfer funds or refrain from purchasing products to avoid unintended overdrafts. Online and mobile banking systems allow their users to set up an email or receive text alerts and notifications when their account balance reaches the maintaining threshold or has low cash.

For instance, the U.S. Bank automatically alerts their account holders via text or email about their current balance, transfers, and transactions. They also allow the consumers to choose and customize their account alerts for credit cards, ATM withdrawals and checking and savings account.

3.    Choose a Checking Account with No Overdraft Fees

Although most banks have an average overdraft fee of $34 for each transaction, some banks do not charge an overdraft fee. Chime offers accounts with no fees and several added features.

●     Chime – Chime does not charge its account holders unnecessary fees such as monthly maintenance fees, service charges, minimum balance fees, foreign transaction fees, and overdraft fees. The founders of Chime ensure its members that there are no hidden charges for a transaction, and it also guarantees its account holders up to $250,000 FDIC insurance through The Bancorp Bank.

Chime also offers a service where account holders can link their external accounts to their Chime Spending Account by logging into their online accounts. After a successful login, account holders then select the Move Money feature and tap the Transfers button. A prompt will appear on the display screen where account users can enter their information and link into their Spending Account.

Chime extends a $200 transfer each day and $1,000 per month which will be available within five business days. It also allows numerous external accounts such as PNC Bank, Capital One 360, Wells Fargo, and U.S. Bank to name a few.

4.    Avoid Spending More Than the Available Account Balance

The most effective and convenient way to steer clear of overdraft fees from banks is to minimize expenditure especially if the account balance is below the maintaining balance or if the transaction costs more than the available cash on the account.

What is an Overdraft Protection?

The miscalculation of budget or oversight in expenses often leads to a shortage of funds. An Overdraft Protection, also called bounce protection or courtesy overdraft, is a convenient feature that consumers may avail from their respective financial institutions to cover their transactions.

Moreover, it is a service that several banks offer their account holders to protect their accounts from reaching a negative or zero balance. Banks automatically transfer funds from their secondary accounts, credit card, or money market savings to their checking accounts.

Benefits of Overdraft Protection

The primary advantage of an Overdraft Protection is the access to quick cash. Although banks impose an interest rate for an Overdraft Protection service, the fees for bounced checks are higher. Furthermore, it reflects positively on the credit score of an account holder compared to unacceptable checks that influence the credit score of the purchaser and limits their access to other forms of credit.

What is an overdraft limit?

An overdraft limit or overdraft protection is the maximum amount that banks allow its consumers to withdraw in their accounts aside from their existing debt. For example, an organization has a checking account balance of $5,000 with an overdraft limit of $500. It means that they can make settlements of up to $5,500, but they cannot withdraw or request for an added money if the payment exceeds the limit.

However, account holders should pay the interest on the amount they withdraw. Banks calculate interest based on the daily balance overdrawn, and this is debited to the account every month. They add outstanding credits to the overdrawn amount for the next month.

Banks with the best overdraft limit

Small and big banks usually offer an overdraft limit which ranges from $100-$1,000 depending on the income of the account holder. Below is brief information on some financial institutions about their overdraft protection services, limits, and fees.

Chase

Chase Bank or JPMorgan Chase & Co. is a global financial firm based in New York City. It is the largest bank in the United States and sixth in the world with total assets of approximately $2.534 trillion. It provides mortgages, auto loans, and a selection of credit cards for its consumers. Chase also offers a checking option of Chase Total Checking which allows its users to access online bill payments that come with a security-enhanced chip debit card.

Chase has an overdraft fee of $34 per transaction and an overdraft limit of three settlements per day. This means that account holders can acquire a total of $102 in overdraft fees per day. Chase offers overdraft protection that allows its account holders to link their savings account to their checking accounts in case the latter lacks fund. However, it does not apply its standard overdraft protection services for a purchase which costs $5 or less or for an overdraft of $5 or less.

Wells Fargo

Wells Fargo is a California-based financial institution with several offices throughout the United States. It offers an economical mobile banking experience and ample access on ATMs to its account holders. Furthermore, Wells Fargo charges its account holders a standard overdraft fee of $35 per transaction with a maximum of four settlements daily that can reach up to $105. Account holders can connect two backup accounts to their chief checking account with a regular charge fee for transfer fees.

Chime

Chime is an upstart account for the tech-savvy generation that offers a cash-back rewards program for its members. Unlike traditional financial institutions, Chime has no unnecessary fees including hidden fees, monthly fees, overdraft fees, service fees, minimum balance requirements or fees, card replacement fees, transfer fee, or in-network ATM fees.

Furthermore, consumers can transfer funds from their Savings Account to their Spending Account without any difficulty through Chime’s online experience or with the Chime App. Chime does not have its own ATM system, but it uses the 24,000 MoneyPass networks nationwide with a fee-free cashback for 30,000 locations.

U.S. Bank

One of the largest banks in the United States that provides a variety of financial services which include mortgages, payment services, and investments to its account holders, businesses, and organizations. U.S. Bank also offers overdraft protection which covers the purchases of the consumers when they have insufficient funds.

If the consumer has overdrawn their account by $5, the U.S. Bank will not charge an overdraft fee. However, for an overdrawn amount of $5.01 and above, U.S. Bank has an overdraft fee of $36 for every transaction with a maximum of four settlements daily. This means that the purchaser can incur up to $144 in overdraft fees each day. Account holders can connect their secondary saving account to their checking account with a transfer fee of $12.50 and $7.50 for Standard and Gold accounts, respectively.

BBVA Compass

An Alabama-based multinational financial institution which originated in 2007 with a variety of branches operating in seven states including Texas, Arizona, California, Florida, New Mexico, Alabama, and Colorado. BBVA Compass belongs to the top 25 biggest commercial banks in the United States, while the Small Business Administration considers it one of the leading small business lenders in the country.

BBVA Compass offers several services which include mortgages, student banking, investments, savings, digital services, and specialty programs. Moreover, it provides numerous overdraft management solutions with tools to notify its account holders and monitor their accounts through Online and Mobile Banking. The Overdraft Payment and Protection Programs feature of BBVA Compass includes the Linked Account Overdraft Sweep Service, Overdraft Protection Line of Credit, and Courtesy Overdraft Option.

PNC Bank

PNC is a bank corporation with over 2,459 branches and approximately 9,000 ATMs nationwide. It provides various financial services such as lending, investments, banking, retirement, property authority, and wealth planning. In addition to that, PNC offers its eligible account holders overdraft protection where they link their checking account to their secondary savings, checking, money market account, personal line of credit, or credit card.

The overdraft protection is less expensive as compared to the standard overdraft fee of PNC which costs $36 for each purchase. PNC also limits the purchasers to only four settlements daily that can reach up to $144 overdraft fee. Meanwhile, PNC declines ATM and one-time debit card transactions with no charge if the account balance of the purchaser is low.

SunTrust Banks

With approximately 1,400 branches and 2,100 ATMs in Washington D.C. and the southeastern states, SunTrust Banks, Inc. gained an asset of $199 billion as of the first quarter of 2018. The bank offers a variety of services which include investment banking, lending, money market services, mortgage, credit cards, and deposits. Furthermore, it provides overdraft assistance, Overdraft Coverage and Overdraft Protection, to its account holders to ensure that they can supply funds when needed.

In Overdraft Coverage, SunTrust allows the consumers to make ATM or debit card transactions daily even with insufficient funds in their accounts. However, the bank will charge an overdraft fee of $36 for each purchase with a maximum of six settlements a day. SunTrust will not penalize the consumer if the overdraft and returned item fees are below $5.

Overdraft Protection service guarantees the consumers that no overdraft or declined transactions will occur once they set up their Overdraft Protection accounts. The account holders are required to link their SunTrust checking account to their SunTrust savings, money market, credit card, or line of credit account to transfer funds in case of transaction deficiency. There is a $12.50 fee for each transfer transactions, but consumers can avoid the charge if they deposit funds to cover the overdraft on the same business day.

Bank of America

The multinational financial institution based in North Carolina is the second largest bank in the United States with a variety of financial services. It provides checking, savings, credit cards, home loans, auto debts, and investment services to its account holders, and several overdraft services.

According to the overdraft scheme of Bank of America, they will not approve ATM withdrawals or debit card purchases if there are inadequate funds in the account of the consumer. Additionally, the bank offers two overdraft options on how the account holders prefer them to process their check payments. The first option is the standard overdraft setting with a $35 fee for every overdraft or declined transaction with a limit of four settlements per day. On the other hand, the Decline-All option is also a $35 fee per item, but the bank will not authorize purchases that will lead to an overdraft.

The Verdict

Based on the overdraft limit of some financial institutions, multinational banks such as PNC, Bank of America, Chase, U.S. Bank, and Wells Fargo have approximately $100 in overdraft limit each day. SunTrust Bank has the highest overdraft limit of seven settlements where account holders can incur up to $252 per day. These figures contribute to the $33 billion overdraft revenue of banks in 2016 according to the report of the Consumer Financial Protection Bureau. Meanwhile, there are great fee-free account options in the United States, such as Chime, which has no overdraft fees or hidden charges.

As a modern consumer, it may make sense to choose a lees traditional option, such as a Chime account, in order to avoid overdraft fees. Chime offers online and mobile access along with the security of a traditional bank, but with none of the hassle.

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