Recs

5

Bank Overdraft Fees: Gotcha!

On one of our discussion boards the other day, Fool community member makerta related a rather shocking story. He discovered a $216.84 charge on his bank account, due to an overdraft. He admitted that he had withdrawn more than his account held, but he (reasonably, I think) objected to the magnitude of the fees imposed -- especially considering his overdraft totaled $0.21!

This story illustrates two important points:

Fees
Be careful with fees at banks. They've recently been increasing them considerably. The best way to avoid many of them is to be a careful banker, trying very hard not to bounce any checks, for example, and balancing your checkbook regularly.

You can also get the best overdraft protection by choosing wisely among options offered by your bank. Banks like Wells Fargo (NYSE: WFC  ) , Citigroup (NYSE: C  ) , and Bank of America (NYSE: BAC  ) charge less if you let them transfer money from a savings account to cover an overdraft.

Service
Another important message here is how valuable good customer service can be. We often look only at factors such as fees and minimum balances when bank-shopping, but if the bank is a headache to work with, we'll regret that.

Below are the banks with top ratings on customer service according to the J.D. Power and Associates 2007 Retail Banking Satisfaction Study. Five geographic regions were used. The maximum possible score is 1,000.

Mid-Atlantic: Commerce Bank (NYSE: CBH  ) (828), Community Bank (808).

Midwest: Washington Mutual (NYSE: WM  ) (802), Marshall & Ilsey Bank (762).

Southeast: Bank of America (784), Wachovia (NYSE: WB  ) (780).

Southwest: Woodforest National Bank (790), Wachovia (774).

West/Pacific: Washington Mutual (774), Bank of the West (763).

What to do
So avoid those fees, and seek out good customer service. I encourage you to drop by our Savings Center, where you can gather more tips on how to save effectively, making the most of whatever bank you use.


Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 540494, ~/Articles/ArticleHandler.aspx, 12/19/2014 3:27:52 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Selena Maranjian
TMFSelena

Selena Maranjian has been writing for the Fool since 1996 and covers basic investing and personal finance topics. She also prepares the Fool's syndicated newspaper column and has written or co-written a number of Fool books. For more financial and non-financial fare (as well as silly things), follow her on Twitter...

Today's Market

updated Moments ago Sponsored by:
DOW 17,827.11 48.96 0.28%
S&P 500 2,075.18 13.95 0.68%
NASD 4,769.90 21.50 0.45%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/19/2014 3:11 PM
BAC $17.65 Up +0.12 +0.66%
Bank of America CAPS Rating: ****
C $54.30 Up +0.20 +0.37%
Citigroup Inc CAPS Rating: ***
WAMUQ.DL $0.00 Down +0.00 +0.00%
Washington Mutual,… CAPS Rating: No stars
WB.DL2 $5.54 Down +0.00 +0.00%
Wachovia Corp CAPS Rating: **
WFC $54.82 Down -0.39 -0.70%
Wells Fargo CAPS Rating: ****

Advertisement