The Lifestyle Digs

Dreaded Bank Fees

Dreaded Bank Fees

It’s tough enough being a single woman and trying to manage our finances. We shouldn’t have to worry about our bank taking money away from us with dreaded service fees.

Women are generally more financially stressed than men because we tend to be more responsible and worry about paying bills. Especially when it comes to having enough money that month to cover all our bills for our basic living expenses. Unfortunately, women typically earn less money than men, and continue to struggle financially.

In my post what single women need to know about opening an account at a bank or credit union, I recommended choosing a financial institution that offers a no fee chequing/checking account with unlimited transactions and no minimum balance.

I hate bank fees

Why am I paying a bank for the privilege of keeping my money there? Why should I pay a bank a monthly fee to have my money grace their institution? It’s even worse paying fees on unexpected charges the bank or credit union dings you with.

Who reads all the small print on the contract you signed when opening a bank account? Those hidden bank fees probably aren’t listed in that contract anyway. They like to stay hidden that way. Shhh. Secret.

We’re working hard at managing our money and finding ways to make our money work for us. We don’t need to lose dollars due to poor money management. We must monitor our bank accounts for unexpected fees and charges that might show up. Then question the bank about it. Maybe the credit union will reverse the charge. Don’t expect a bank to do that, by they way. They’re more about profits, not about people.

Dreaded bank fees

Hopefully you signed up with a financial institution that has a no fee account with no strings attached. I’ve been a member of Coast Capital since it was called Surrey Credit Union and my mom opened an account for me when I was a baby. Coast Capital was the first financial institution in Canada to offer a free chequing account. There’s no monthly fee and I get unlimited transactions: using my debit card to buy stuff, going online to transfer money and pay bills, etc. I don’t earn any interest on my chequing account.

Most financial institutions offer a free saving account, but they’ll only allow one or two transactions a month, and after that you’re paying a dreaded bank fee. Keep an eye on it. Coast Capital charges a $5 fee per transaction once you go over the two free transactions they allow on a savings account.

Overdraft fees

If you overdraw your account – spend more money than you actually have available in your account to spend – you will be charged a fee every time.

If being overdrawn is something you’re concerned about, you can pay a service fee for overdraft protection on your account. That fee varies from bank to bank and the amount you’re allowed to be overdrawn will also vary.

You can ask about a line of credit on your account, which might be a few thousand dollars. This is similar to a high interest loan.

You really want to avoid overdraft protection or a line of credit on your account because you’re paying dreaded bank fees and this debt can be tough to dig out of. However, there may be times in your life when you’re having cash flow problems and these services can give you peace of mind.

If you overdraw your bank account the dreaded bank fee is $20, $50 or more. The offending transaction can be rejected by your financial institution. That means a cheque (check) you wrote could bounce and be returned to the person you wrote it out to. If you have an automatic withdrawal set up for insurance or rent, and that transaction overdraws your account, your bank might reverse it.

Dormant fees

Even if you have a “no fee” bank account, did you know you can be charged by your bank or credit union if you haven’t used your account in awhile?

I really hate this one. If you have accounts at a few financial institutions and money is tight, you’re forced to stop making regular deposits. Maybe you’ve been out of work, sick, or moved and you’re not dealing with that saving account. You haven’t forgotten about it. You just haven’t needed to use it in awhile. You’re not worrying about it because you’re not charged a monthly fee on this account. It’s not costing you any money to ignore it until you’re ready to make deposits again.

Then one day you go to withdraw money or make a deposit and realize there’s no money in your account! Even worse, you might be overdrawn!

Yikes! Did someone hack into your account and you’re a victim of fraud?

You scroll through the activity on your account and realize your money got sucked away by a dormant bank account fee!

What!

It happens. Horror stories are all over the Internet of getting charged $20/month just because you haven’t recently used your account. If you only started out with $100 or so in that account – it’s gone! And that monthly dormant fee continues to wipe out your account, putting you into overdraft once your account has zeroed out. You’re getting hit with dormant fees!

If it doesn’t look like you’ll be using your account for awhile due to unemployment or other life circumstances, make sure you know what the dormant fee is and how long it takes to come into effect. Could be six months, maybe longer.

An ugly fee on my Tangerine no fee account

Check out these fees from Tangerine that are coming into effect in 2020 on a supposedly “no fee” account. The dormant fee is $20/year which isn’t so bad when you consider some banks charge that a month on a dormant account.

One thing I never noticed before is a $10 inactive fee after one year.

I have a few savings accounts with Tangerine that I don’t really do anything with. Two accounts are for income tax and GST that came from a former business the deadbeat and I ran. I kept the money in Tangerine so it’d earn a bit of interest. It’s also harder to access money from online banks. It’s not an instant transaction. It takes a few days to transfer money to your bricks and mortar bank or credit union. I’m going to close both of them because they’ve not been actively used in years other than a few withdrawals.

So – make sure you deposit a buck or two every few months into rarely used accounts to keep them from going asleep.

It might just be smarter to close those accounts and transfer the money somewhere more convenient for you.

Those dormant fees really irritate me. The money is just sitting there in the account minding its own business, not causing anyone any trouble. How can a bank charge a fee when someone chooses to leave their money alone, letting it earn whatever paltry interest rate it makes?

Last word on the dreaded bank fees

If an unexpected fee shows up in your bank account, contact your financial institution and ask about it. Maybe it was your fault, whether or not you understood you could get charged a fee, such as that dormant account thing.

Sometimes you can get a service charge reversed. Maybe the bank policy allows you to use ATMs at other banks three times a month for free and after that it’s $5 for the withdrawals at other banks. You didn’t understand that. You can apologize and promise it won’t happen again and ask if the charge can be reversed. However, if you do it again, they likely won’t reverse that dreaded bank fee a second time. They leave notes on your account so other staff can read them and see this issue has already been discussed.

Is this fee going to recur? Policies change all the time. Tell me I’m not the only one who doesn’t bother reading the propaganda the credit union sends me regarding fee changes! Maybe your no fee bank account now costs $10 a month. That sounds like an unpopular policy change. A lot of customers will jump ship on that one!

If you’re unhappy with how the fee was handled, especially if you unknowingly did something wrong and the bank doesn’t care, you’re under no obligation to stay anywhere that you’re unhappy. Check out the problems I had with Envision Financial and TD Canada trust – and then I walked!

Ass Wipe Envision Financial

I’m a Survivor of a Rogue TD Bank Employee

Customer loyalty is a thing of the past. We want to go where we get the best deal with the least amount of hassle. Another financial institution will be happy to have our business.

More reading

What do Single Women need to know about Banking?Are Single Women mostly Ignored by Financial Experts?

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