I’ve had the same checking account since the day I was old enough to own one. The account began with a bank that had branches in 11 eastern states before it merged with another bank to become a larger, nationwide bank at which point the account stayed the same. When I initially opened the account, there were no monthly fees or minimum balances affixed to the account.
Flash forward several years to when this author began an account with another bank because of very good terms on credit cards and fantastic auto insurance rates. This new bank, however, didn’t have as many ATMs available. So it seemed a natural decision to leave the older account open for ease of withdrawing cash when cash was needed.
That all changed when monthly maintenance fees started popping up on the old account. While a $2 charge may not seem like very much, it’s money you’re paying for nothing, especially if you have no reason to keep the account open. And there’s simply no sense in paying extra fees for services you don’t need. To make matters worse, the newer account is no longer less convenient in terms of automatic teller machines. To keep the old account open makes no sense, as I’m paying fees for something I don’t use, right?
Loyalty only goes so far these days, and considering that my original bank snuck a disclaimer in my monthly statement telling me about this $2 fee, I moved on. Perhaps if I had known about this $2 fee 18 months ago when it was implemented, I would have changed banks in 2009. Foolish me, I never checked my bank statements and never noticed the difference in a few bucks each month. Shame on me.
If you have several accounts in several banks, now might be a good time to reexamine them and see if consolidating accounts would be advantageous.
First things first. Examine all of your bank statements. Identify any fees and what they’re for. If they’re for minimum account balances, chances are that consolidating accounts will be beneficial to you. If you can close an account with a minimum balance fee and add it to an account without the fee, then you can save yourself some money every month.
Next, you’ll want to understand whether you’re free to close any or all of the accounts. For example, some mortgage lenders offer better loan terms to borrowers who agree to switch their accounts. Some banks require you to keep an account open for a certain period of time after opening the account. (Usually, these terms are for accounts with promotional offers.)
If you have accounts you cannot close yet, examine the minimum balance fee and try to move cash around to avoid paying the fee in the future. Find out when you’ll be able to close the account, and wait it out. If you have to keep the account open permanently—because of mortgage terms or other requirements—then you may want to consider closing other accounts and using the one you’re stuck with for your primary banking. If you find yourself faced with other fees, try to figure out how to arrange your accounts to avoid them.
Remember, many banks have intimated that their fee schedules will rise after financial reform. Much of the industry is complaining that new regulations will make it impossible for banking to be profitable. Don’t let that deter you from taking advantage of the best account terms available. Research accounts from different banks and move your banking to the one that’s best for you.
Published or updated March 24, 2011.
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