5. Banks Get Creative
While shopping for any kind of account at different banks, be sure to ask about any start up fees they may have. Fees could be for general maintenance, minimum account balance, online banking, large cash deposits, and tellers. While some of these fees have been made illegal with recent bank and lender regulations, that just means the banks are getting more creative with new fees.
4. Meager Savings Rates
When you were younger, you were probably told to start a savings account and then let your interest build over time. However, leaving your money sit in a bank pays off less than you might think, or not at all. This is because initial promotional rates you eventually are lowered and is likely to lose value over time, rather than grow, due to inflation fluctuations.
3. Banks Prey on Complacency
If you aren’t paying attention to your bank statements, the bank may be robbing you blind with secret fees, interest hikes, and credit rate changes. Online banking has done a lot to help you track your transactions and fees, and it is important that you question any unknown or suspicious fees and charges and demand full disclosure from your bank.
2. Time & Market Sector Capitalization
University and college students beware of this point. With student loan debt at an all-time high, universities and banks are working together to make on campus ATMs available and convince students to open accounts with banks. This is because a percentage of the students who open an account will become long-term customers.
1. Making a Relative Premium
If you are buying trading stocks, bonds, mutual funds, and ETFs at a bank, you are likely incurring higher fees than you would at an online brokerage. Make your money work for you by investing in low fee investments and limiting how much money you leave in the bank.
Banks are a necessary part for financial investment, but it doesn’t mean you need to be taken by them. Always ask questions and for full-disclosure when you are suspicious, and remain alert for any fees you don’t recognize.