How to Save Hundreds in Banking Fees Per Year

Banks are essential to managing your money, but they’re also notorious for their hidden fees and asinine charges. In the worst of cases, these charges parlay into each other. For instance, a monthly service charge on your new account with $0 in it will become $-20 which will then become a $-60 after an overdraft charge.

Many of us know the pain of getting this money pulled out from underneath us. For me, the worst experience by far was a few Christmases ago when I had preemptively transferred some money into my savings so that I wouldn’t spend that money during the holiday. I ended up spending a bit too much and overdrafted, it was a mistake, but it happens. Of course, I didn’t know about this till after Christmas when I went back into my account and saw nearly $200 in fees. Apparently, each time I bought a stocking stuffer I was causing an additional overdraft fee of about $35. That was probably the most expensive gum I’ve ever bought.

Luckily, when trying to fix this issue, I stumbled upon a few tips and tricks of how I could save money each and every year and in this guide I’d like to share with you exactly how you can save one to two hundred dollars a year with a few minutes of your time.

Call Them And Ask

Surprisingly, when I called Chase, I discovered that they are able to waive up to $200 in banking fees for the entirety of the year! They call this a courtesy waiver at Chase but in my research it seems like most banks have a similar ability to waive fees once or twice per year depending on the bank (amounts may vary as well). For Chase specifically, I asked the service rep that night how often I could waive these fees and he responded “We’re given authorization to waive up to $200 in fees and charges once per year”. So now, every holiday season I call Chase and get back all of my fees from the previous year.

Of course, this is more of a remedy than a cure. If you don’t want to worry about these pesky fees, there are alternatives to consider.

*Note: This waiver from Chase includes all types of fees, including domestic and international wire charges.

Switch to Online No-Fee Banking

My favorite alternative is switch from physical banks all together. You should really take note of how you interact with your bank. If you haven’t been to a branch in a year or only go in to make deposits and withdraws, I might consider using an online bank. Switching to an online bank can not only save you money, but you can typically make money in the process.

For example, Varo, at the time of writing this, has an APR (annual percentage rate) of 2.80% which is about 400x the national average. This means you’re not only avoiding monthly charges, ATM and overdraft fees, but you’re also get $28 for every $1000 you have in the bank per year. It may not sound like a lot but that’s a net positive rather than a substantial net negative you may have at in-person banks.

There are two great options for online banking, Varo or Simple. Simple I’ve used longer, but Varo has a better APR (closer to 2.8% with qualifying activity), and you can talk to a live agent if you need, which is great for an online bank.

Keep Your Existing Bank Account

Here are some tips to reduce your fees if you’d like to stay with your bank.

Downgrade Your Account

You may simply be paying too much per month for features you don’t use. A lot of times when you hit a certain threshold, banks will use this as an opportunity for an upsell and get you into the “Platinum” or “Gold” or whatever precious metal they think you’ll pay to have associated with you account. Some of these tiers come with decent perks, but a lot of the time they’re selling the same thing with higher fees once your balance goes below a certain threshold.

I recommend staying on the basic tier as long as it makes economic sense. If you’re sending out wires for a business or incurring other fees that are waived by going up a tier, then that’s when you can do a cost/benefit analysis.

Set Up Overdraft Protection

This isn’t a highly advertised feature at most banks, but all of them have it in one shape or another. Each bank will give you two options for overdraft protection.

1. Decline the transaction altogether so that you don’t overdraft.
2. If you don’t have money in your checking account, pull from savings.

The second sometimes comes with automated transfer fees, so be mindful and ask of that as well. Don’t rely on this system, use it only as a safety net.

You can make this switch online, over the phone or in person, just ask about overdraft protection for your accounts.

Know How to Avoid Fees

If a bank has a monthly charge for an account, there is typically a way to avoid it. For instance, at the basic tier of Chase Checking Accounts. You can waive your monthly fee of $12 if you do any of the following:

1. Deposit $500 into the account that month.
2. Hold a daily balance of $1,500 in the account for that month.
3. Hold a daily balance of $5,000 in any associate Chase account that month.

It’ll pay to learn these rules for your accounts so that you can make smarter decisions as to when to move money and how so that you can satisfy these rules.

Total Savings

At the end of these money saving guides I like to do a recap to see how much this simple change is worth. If you keep your bank the same, this guide will most likely save you between $100–200 per year (depending on how many fees you incur per year). If you are to switch to an online bank, you may be able to save that $100–200 that you would’ve been paying in fees per, plus make a decent APR which could make you an additional couple hundred or even thousands per year (depending on how much you hold in your account).