Banks have salespeople who have targets to meet. They receive a commission on opening a new customer account, which means that their commission depends on the deposit you make. The bigger the deposit amount, the higher is the commission. If you appear a bit hesitant, they will coax you into making an appointment. But trust us, it’s a lot easier to say no on the phone than face to face.



Every time you swipe your debit or credit card at a store, the bank makes more money by charging the merchant. They tempt you into spending more with promotional offers, and you think you’re being rewarded. However, that’s the quickest way for banks to make money, and when you’ve racked up a good $1000 in debt, you get trapped into paying interest.

Many banks charge a fee when you don’t maintain a minimum balance. When a payment is made directly to your account from your employer or the government, it reflects as Automated Clearing House (ACH) payment. You can completely waive off the monthly fees with Prearranged Payment and Deposit (PPD), which fulfills the requirement of direct deposit from other products like dividends, pension, online savings, etc.

Universal Default Clause is a condition that allows banks to raise the interest rates of your credit card. This happens when you fail to pay your payments on the due date. The good news is that the Credit CARD Act brought in the provision that the interest rate can’t be raised without informing the user at least 45 days in advance.

We’re sure you are aware that when you use an ATM that’s not affiliated with your bank, you have to pay some penalty. An average of $4.35 per transaction is standard. Your bank charges this for using another bank’s ATM, and the ATM that you used, charges you as well. To avoid these fees, you can opt for online banking.

Up until 2010, banks would provide overdraft protection. However, today, the average overdraft fee charged for a transaction is $33.36, according to the Bank rate’s 2019 checking account and ATM fee study. The best way to avoid overdraft fees is to track your expenses and set up balance alerts. These fees are often unnecessary expenses, and by understanding how they work, you can easily work your way around them.

Banks tend to run debits before running your deposits that make on the same day. This hits your account with an overdraft fee despite depositing the required money. To save yourself from the fee, develop the habit of depositing cash, the first chance you get. It has been observed that those who can least afford it, end up spending the most on overdraft fees.

Banks usually don’t always offer the rate of interest they advertise. The rate advertised is typically the lowest, and not many customers are qualified for it. Only those with good credit scores are offered that rate, and this scenario is rare. Quite a few are given loans at a higher rate of interest, making it harder for them to pay the bank back.

Yeah, who thought that could happen! Before committing to a loan, ensure that you know of all the terms and conditions. Banks sometimes have a prepayment penalty clause that doesn’t allow you to pay the principal in advance. However, the good news is that quite a few banks today offer loans with no prepayment penalty clause attached to it.

If you are moving to another state, don’t like your bank’s service, or have found a bank that fulfills all your requirements, you should reconsider closing your account. You should especially avoid closing a bank account that’s overdraft or has a negative balance. If you go ahead with this, the third-party will get in touch with the credit bureau. This will reflect negatively on your credit score.

Did you know the banks have the authority to change your Annual Percentage Rate (APR)? Yes, APRs aren’t consistent but are directly proportional to the prime interest rate. This means that if the prime interest rate changes, your APR will change, too. All your bank would do is let you know before altering the terms. You can, of course, opt out of it but that comes with other obligations attached.

Yes, you read that right! Never turn to your bank to exchange your foreign currency to US dollars. An actual currency exchange service offers updated currency rates and doesn’t charge high prices in exchange for cash. But, also remember that not all currency exchanges charge the same rate, so ensure you compare the fees before rushing to get your money’s worth.

The interest on saving rates are constantly fluctuating. The Annual Percentage Yield on any savings account is variable and fluctuates depending on the state of the economy. While some may be aware of this, banks don’t necessarily disclose this information. The interest rates may not be the same as the day we open our savings account, so always keep that in mind.

Banks will try everything they can and lure you to open an account with them. They are more likely to lure you with a credit card. The 0% introductory offers come with terms and conditions, so ensure you read and understand them before buying it. All banks want to make money off you, and one late payment could drop that 0% annual percentage rate.

Many universities have a tie-up with banks that pay them for every student who signs up with the bank. Students, of course, enjoy the freedom of owning debit and credit cards and often fall prey to the bank’s introductory rewards. Universities are also a great place for banks to grow their database, which, eventually, will help get them closer to potential customers—both students and their parents.

Most banks charge for excessive activity and transfers from a savings account to a checking account, which is capped at six by the Federal Reserve Board Regulation. However, transfers from your checking account to savings accounts have no limit. This is because a savings account remains with the bank longer, and banks always need enough liquidity to lend out funds.

Paper statements do no good to you or even the environment, especially in this digital age. All bank statements can be viewed online via net banking or emails, which you can easily print in your home or office. Paying fees for printed statements is simply a waste, and by no means will your bank share this advice with you. Yeah, you’re welcome!

If you want to waive off the checking account fees, link all your accounts together. And, if the combined sum of all the accounts crosses a threshold, the bank will have to lay off the fees. This, in banking terms, is called a “relationship waiver.” When we say all your accounts, we mean money market, CDs, IRAs, mortgages, and brokerage accounts.

Be very careful of the checks you accept. A bad check will cost the payer, and you will lose money both ways. Not many know this, but your bank charges you a Deposit Item Return fee (DIR) when this happens. Moreover, no one but you will be held responsible for representing a check against insufficient funds. Doesn’t sound fair at all, but that’s the norm.