I'll Have No Fees Someday

Banks are evil. We all know this. They got bailed out, we got sold out, etc. But you have to keep your money somewhere, and burying Ziplocs of bundled $20s isn't exactly convenient. What's a working stiff to do? Be prepared.

Inspired by Occupy, you want to move your money from the evil banks to a goody-two-shoes community bank or credit union. But what's the difference?

A community bank is defined by the Federal Deposit Insurance Corporation as any banking organization with assets totaling less than $1 billion. Otherwise they are not fundamentally different from national banks. Some, like Albina Community Bank and One PacificCoast Bank, are explicitly devoted to bettering the communities in which they operate; others are not.

Credit unions are nonprofit institutions owned by their members. They may have restrictions on membership, requiring members to belong to a certain union or company. Others are open to all U.S. residents. Some are quite large: OnPoint reported over $3 billion in assets in 2011. Credit unions often have lower fees than banks.

When you shop for an account, ask to see the fee schedule, the document listing all the fees the institution could charge you. Some institutions make their fee schedules readily available online, but many hide it. They  are dense with jargon, so you may want to go into a branch to have it explained.

You want to avoid a monthly fee for the account itself. If a bank requires a minimum balance to waive a fee, consider whether you will consistently meet that balance. Draft an outline of your spending habits—how much money you keep in your accounts, whether you use checks or debit or automatic bill pay—and ask what accounts a bank has that best fit your needs.

The most common bank fee most consumers encounter is an "overdraft" charge incurred when you spend more than you have in your account and the bank charges an outrageous fee—$35 is standard—for covering the shortfall. Debit overdrafting is, thanks to new federal regulations, always opt-in only on new accounts, so unless you ask for it, your card will just be declined when you lack sufficient funds. However, overdrafting fees for checks and automatic bill-paying still apply. If you use either of those and tend to run out your account balance, consider choosing a bank that offers automatic email or text message alerts when your balance is low.

If you choose a bank that doesn't have a surcharge-free ATM near your home or workplace, you could easily lose hundreds in fees. While the big national banks have many branches, they don't necessarily have the largest ATM networks. Most credit unions belong to the CO-OP Network, which allows customers to use ATMs at any member branch or 7-Eleven location in the U.S. Oh, thank heaven. 

WWeek 2015