5 Things You Probably Don't Know About Your Own Bank

How much do you actually know about the policies of the company you've entrusted with your money?

We think of banks as the safeguards of our money, and a helping hand to turn to when we need to finance a large purchase. But you can't forget that banks are businesses first and foremost and their bottom line is always going to be their highest concern. And although they can't outright lie or steal from, many banks often fail to mention some of their terms, especially those that may paint them in a bad light. Here are five of them that you probably didn't know about.

1. Your free account may not actually be free

Many checking accounts don't charge monthly fees, provided you meet certain criteria. But if you don't, they'll quietly pull money out of your account every month. There are several ways to waive these fees. You may have to maintain a certain daily or average monthly balance, make a certain number of direct deposits to the account every month, or switch to paperless statements. But to do any of them, you need to be aware of what you are being charged for.

When you open your account, your bank should give you a list of all associated fees, along with any requirements you must meet in order to have your monthly fee waived. Look them over and compare them with the fees and interest rates that other banks charge to decide which one offers the best value.

2. You aren't always free to use your money how you want to

I ran into this problem a few months back when I needed $600 in cash. I went to my bank and attempted to withdraw the funds only to be told that I had a maximum daily cash withdrawal limit of $500 per day. They claimed it was for my protection, but it's also an inconvenience, because now I have to plan ahead if I'm ever in that situation again. 

Some banks may also limit how much you can charge to a debit card per day as well, but these limits are usually around several thousand dollars, so you are unlikely to have an issue. Federal law limits you to six savings account withdrawals or transfers per statement cycle, so if you exceed this limit, you could pay an excessive withdrawal fee. 

3. It can still charge you overdraft fees even if you opt out

Overdraft fees aren't as common as they once were. Banks used to automatically enroll their clients in overdraft protection so that they could still make their purchases even without sufficient funds in their account. The catch was, they'd pay a $30-$35 fee each time they had overdrawn their account. This practice got so out of hand that in 2010, the government passed a law requiring banks to stop automatically enrolling clients in overdraft protection. Now, if you try to spend money you don't have, the transaction will simply be declined unless you opt into the overdraft protection program.

This law has helped curb some of the problem, but it hasn't eliminated it entirely. Even if you haven't opted into overdraft protection, your bank can still charge you overdraft fees for checks you've written, online payments, or recurring bank account withdrawals. Since more and more bills are being paid online these days, this still leaves banks with plenty of opportunities to hit you with extra fees. You can avoid them by budgeting better, or linking your checking account to your savings account. The latter will tell the bank to take money out of your savings account if what's in your checking account isn't enough, but there may be a small fee associated with this as well.

4. You may be able to negotiate fees

Remember how I said that a bank is first and foremost a business? Well, businesses don't survive for very long if they don't keep their customers happy. That means that many banks are willing to negotiate some of their fees if you call and complain. But, it depends on your situation and how you handle it. You're unlikely to make much headway if you're rude and you chronically overdraw your account. But if this is a first-time offense and you're polite, the bank will probably be more accommodating.

It's best to visit the bank in person if you can, or contact them by phone. Don't try to negotiate via email. Highlight your loyalty to the bank and explain why you think the fee should be waived. If you believe the bank charged you the fee in error, point out why you think it was a mistake. Stay polite and friendly, but don't be afraid to point out that there are plenty of other banks you could take your business to. 

5. It might share your personal information with third parties

Even though privacy is a huge issue today, you may not realize that your friendly neighborhood bank could be selling your personal information or data on your spending habits to its affiliates, or third-parties. The 1999 Gramm-Leach-Bliley Act attempted to impose limitations on what financial institutions can do with your personal information, and it does require all banks to offer customers the option to opt out, but it hasn't stopped this practice.

Banks don't readily advertise how to opt out because they make more money when they can sell your data. And even if you do opt out, it's difficult to know whether the bank actually keeps its word. If this concerns you, talk to your bank about how it's using your personal information, and see if you can opt out. 

Banks don't advertise any of these things, but they're still important for consumers to know. Understanding the above facts can help you avoid costly fees and inconveniences that could affect your ability to manage your own money.