Recently I was reviewing a client's cash flow statement and learned that he had paid over $250 in bank fees on an account of only $9,000. That is a little more than $20 per month. The fees alone cost him just over 2.5% of his investment, and with banks paying a pittance for interest, he was actually losing money after taxes on this account. Now, don't get me wrong - banks serve a very important function in each and every one of our financial lives, but this "nickel and diming" to death is really getting out of hand.
The National Bank of Chicago decided to charge customers three bucks every time they talked to a human teller. This was a simple business decision made on the part of management to encourage customers to utilize electronic banking services such as ATM's and banking by phone. This move prompted quite an annoyance to many bank customers. The national media feasted on the event and created animosity between the reminiscent, way-things-used-to-be-folk, and the net-surfing, need it in a hurry, "can't you do that any faster" customers.
Banks have learned that automation, computerization and electronic banking, though intimidating to many, is not only cost effective but more efficient and fool-proof than ordinary human tellers. Since many of us refuse to deposit our paycheck, withdraw money or make a loan payment through the ATM, banks are forced to raise fees because it costs a lot of money to continue paying a human workforce for tasks that could be executed electronically.
The fact is, banks have been raising fees and instituting new ones for several years now. According to one report, banks charged 95 different types of fees in 1989. Four years later they charged more than 225. Another study found that fees on simple checking and savings accounts rose 50%.
You may think you don't have much of a choice now that you're already with your bank. But there are things you can do to make your present situation better.
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