Saturday, January 28, 2012

Are Banks Nickel and Diming Their Clients to Death?

Given that in hard economic times, banks should be incentivizing the populace o save some money, shouldn’t banks avoid at all costs in nickel and diming their clients to death with exorbitant processing fees?

By: Ringo Bones

Since 2010, banks around the world had since increased their service charges on checking accounts on average greater than the intended deposited cash’s interest rates. Since then, minimum balance for savings accounts to earn interest and avoid penalties had been raised 137%. But what should bank clients do to avoid being nickel and dimed to death out of their due savings account interests?

As of late, many a smart saver had been moving to smaller community banks and credit unions because these smaller financial institutions offer better growth on savings accounts. On-line banks too ate gaining new customers because they offer deals that are as good as that of smaller community banks and credit unions with even smaller processing fees because all transactions are done electronically on line.

Even though community banks and credit unions are still the way to go for folks who are not very computer savvy, community banks and credit unions have a very distinct disadvantage of a lack of nearby branches. Transportation costs could become very significant when moving and checking your accounts from one community bank or credit union to another. But then, how much do you have to move around your savings and time deposits given the very attractive interest rates offered by credit unions and smaller rural community banks that they provide to their clients?

1 comment:

Madison Scott said...

Most "small-town" credit unions that I do my business with had been also the very first ones to adopt the Dr. Muhammad Yunus style microfinance schemes in North America.