Saturday 28 November 2009

Avoiding 'bank' fees

Although I have many (too many?) different bank accounts, and our biggest 'relationship' with St George bank (our home mortgages, a margin loan account and a portfolio loan account), I've always considered my 'main' bank account to the credit union savings account I opened thirty years ago while at uni. It's always been economical to have my wages paid directly into the credit union account as there is no monthly account keeping fee, and, until recently, there were no fees for writing cheques or making on-line bill payments or transfers. There was a limit to the number of "free" transactions each month, but I had never exceeded the limit.

A few months ago the credit union announced a new, variable monthly transaction fee 'allowance' that is based on the total size of the 'relationship' you have with the credit union each month. As my savings account balance tends to fluctuate between $0 and several thousands of dollars during the month, some months I only have the minimum $25 fee "allowance" and other months I'm allocated a $50 "allowance". As my usual monthly activity (bill payments, transfers, cheques and ATM cash withdrawals) usually adds up to around $25 dollars in notional "fees" some months I've ended up having to pay out $2 or $5 in fees. It was especially annoying when I thought I was just under the monthly limit, only to have a couple of cheques presented on the last business day of the month!

To avoid having to pay any fees I now transfer some money from my personal credit union account to the "joint" account DW and I opened after getting married and pay some of my bills out of that account. A transfer between accounts within the credit union has no fee, and while the joint account generally has almost no cash in it, it is still allocated the minimum $25 "fee allowance" each month. By paying some of my bills using the joint account I can effectively double my monthly fee "allowance" to $50, which means I can make around 25 transactions each month without being charged a fee.

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