The Free Checking Lie

[Anonymous]

The state of the banking market isn’t anything exciting or interesting.  There is an inverse relationship between the consumer and the banker.  

With tha being said, the Wells Fargo Greenhouse product seems to be okay but could use greater interest rates.  I had HSBC Online in the past with online savings and online billpayment but their product wasn’t good.  I kept it because savings rates were highest I could get at the time, then rates plummeted so I got rid of my relationship with them.  Wells Fargo may not offer interest now but has superior online systems and lots more branch and ATM’s in better locations.  Chase Finn is also competitive.  

[jamesdwi]

I guess I could say I have 3 non-free checking accounts, well not exactly, each of my checking accounts have put money in my pocket this year to the tune of $450 this year accross all 3 accounts. US Bank put in $200 in the account shortly after I openned it and setup direct deposit of $500 a month, 30 minutes in the branch, and 10 minutes on employers HR website to setup the direct deposit. No fees, I had no checks printed I simply added the account to a couple credit cards I use frequently, its also the local property tax department has an  arrangement to pay my tax bill monthly.

Chase checking account was quicker,  10 minutes on there website, and a $50 deposit from my primary credit union debit card, account funded,  and 10 minutes setting up the direct deposit, again I didn't have check printed.  Then a short 10 days later a $200 deposit.  Both of these were basicly painless.

My primary checking account is at my local credit union,  landmarkcu.com.  Have been banking there for 20 plus years. Yes it sounds crazy.  But even more crazy is that they pay 7.5% APR on the first $500 in my VIP checking account. Which last year netted me $45.04. I just leave at least $500 in the account that I never budget for, I haven't bothered to have checks printed for this account in probably 15 years or so, and rarely use the debit card, perhaps once or twice a month at a discount grocery store that doesn't take credit cards. No fee's and they also allow 1 bank check per day free of charge. Since I have an long history with the bank as a good customer, we have been known to get a second free bank check free, if we ask and in the rare occausion the 2nd bank charge wasn't waived,  a manager at another branch removed it later when we were in making small talk about it. 

For me to keep a checking account fee free, is don't get checks printed. Most companies handle electronic transfers as easy as checks. Limit debit card purchases, going over the budget is too expensive, my credit cards are far more freindly about going a few dollars over my budgeted amount which I catch up with the following month or two. Establish a history with your primary checking account establishment, get to know the people at your local branch, should a fee happen or special service needed, fees are often waived for good customers. 

[Anonymous]

Helpful thoughts by James.  I really love his emphasis on having banks pay him to open accounts, via signup bonuses.  I make about $1000 a year doing that, and I could make quite a bit more if I worked at it.

One thing that works for James is to avoid printed checks entirely.  But just in case a person needs to write paper checks, bear in mind that some banks will give them to you for free.

I pay Discover no fees of any kind, and they give you free paper checks as part of their service.  (Also there is no minimum balance on the checking account.)  My local CU (which is my brick and mortar choice) also gives me free paper checks.

[Anonymous]

---

@Anonymous wrote:

There is really no excuse for overdrafting. It's simple: if expense if greater than balance, do not pay with check or debit. As others have said, it's not rocket science.

---

True of course, but it is happening. So apparently overdrafting is a way of life, or habit for some people. I've noticed that it's more prevelant with College kids, perhaps in their mind it's the only way to get a cheap short term loan. IDK...

Because it doesn't explain why a person continues to pay a $35 fee for a $4.95 coffee overdraft etc. 

Like I said, for someone who keeps thousands in their accounts often don't have to worry about which bill is getting pain when or when it hits. Some people do not have that luxury.

I've been overdrawn a few times in my life, both at my fault and the Bank. For which I received a reversal on those. 

When I was going through my rebuilding phase, I had a couple garnishments hit my accounts. Thus causing overdrafts, because they were unexpected. While at the same time other charges come through such as Bill payments. So it is totally possible for it to happen unaware.

Fortunately I haven't had one in several years, now that it's much easier to manage finances online at anytime. In additon to having a larger income than I did in the past.

[Andypanda]

---

@Anonymous wrote:

Nothing is ever truly free though, right? In this case it is free so long as you abide by the rules governing the account. Which means no over drafting, keeping a minimum balance or making certain number of Direct deposits per month. 

While most people think free checking is aimed at lower level income earners, it's really only beneficial to those with higher income. 

Because most people on a budget will always overdraft at some point, either by a missed paycheck or unexpected expense. 

FDIC Data Shows that Banks Collected $11.45 Billion in Overdraft Fees in 2017, and Forbes reported that Banks collected over $34 Billion in overdraft fees in 2018. This tells me that Banks are litterally surviving on the backs of poor people, to counteract all the interest paid to the rich people's Money Market accounts etc.

---

The money paid in money market funds are from investing the money in various short term investments, not from bank fees. The FDIC and SEC tightly control the defention of a mony market account and how tge money can be invested.

[ScoreSizzle]

I bank locally and with credit unions.