When you go into a bank, the truth is that you are probably on your own when it comes to your own financial interests. Everyone may be friendly and eager to help when you walk in the door, but the bank is a business, and it exists to make a profit. That means that your bank wants to make money off of you. Helping you with your finances may not be high on your banker’s to-do list. Here are nine things your banker probably won’t tell you:
1. Your whole deposit isn’t available immediately
This information is somewhere in your account materials, but your banker isn’t going to actually tell you this when you make your deposit. Some banks only allow you access to the first $50 or $100 of your deposit. So, if you make a $500 deposit, $400 of it may not be available until the next business day – or later. That means that you can still bounce checks or overdraw your account (and the bank can collect the fee), even though you made your deposit. Ask your banker when the full deposit will become available, since he or she is unlikely to volunteer the information.
2. A post-date on a check means nothing
If you are giving out a post-dated check, you have to trust the recipient not to cash it ahead of schedule, because the bank is likely to just run it through when it arrives without looking at the date on it. Even if the teller looks at the date, a bank has no legal obligation to honor the date on the post-dated check. The bank will accept the check and it could bounce.
3. Fees are the big money maker
Your banker probably won’t tell you that fees are the biggest money maker for banks. The interest earned on loans – and even on credit cards – pales in comparison to the fees that banks charge. In 2009, it was estimated that banks made more than $38 billion in overdraft fees alone, according to a study by Moebs Services. Add in other fees, such as the smaller fees charged at ATMs, for paper statements, and for not maintaining minimum balances, and that number is even bigger. The fees you pay are more valuable to banks than just about anything else that you do.
4. You can get some fees waived – just ask
Some banks have a policy of waiving one or two fees each year – just because you asked. You can have a single overdraft fee waived at your request, or ask for refunds on ATM fees. While these policies exist, many bankers aren’t forthcoming about them. Banks make more if you just pay the fees, fuming in silence. Ask if there is a policy to waive at least a fee or two at your bank.
5. Your refusal to opt in for "overdraft protection" doesn’t apply to checks
Recently, rules regulating "standard overdraft practices" went into effect for checking accounts. Now, before banks can approve transactions that you do not have sufficient funds for, you have to opt in. If you choose not to opt in, your debit card transaction will be denied if you don’t have enough money in your account. However, what the bank may not tell you is that checks you write, and automatic bill payments you have scheduled are not included in the new rules. Banks can still approve checks and bills over the amount you have in your account – and charge you a fee for the overdraft.
6. Your online account information may not be accurate
You might be interested in checking your online account information to find out where you stand. However, your information may not be up to date. Sometimes, there are inaccuracies in your online account information, or it doesn’t take account for the way that transactions are actually processed. While your online account can be a good guide, it is not always exactly accurate, and if you are cutting things close, you may find yourself in trouble if you rely on your online account information.
7. Bankers are salespeople
Your banker may tell you that he or she is offering a great product or service, but this might not be the best financial decision for you. Indeed, bankers are salespeople, as well as bankers. The more products they can get you to "buy," the more money the bank makes. Many banks now offer insurance, retirement accounts and more services beyond checking and savings accounts and loans. Be wary when the bank pitches you on a product or service. It might be more about the bank’s bottom line than your bottom line.
8. You should shop around for financial products and services
Many people just go to their bank for loans and other products. It seems easier and more convenient to keep their financial accounts at one institution. Additionally, many assume that, because they have been loyal customers, they will get a good deal. Unfortunately, this is not always the case. In fact, your bank may not have the best interest rate on a home equity loan, or your bank’s retirement plan may charge higher fees. While you want to include your bank in the search, it’s best to shop around for the best deal. Make sure your banker knows when you find a better deal elsewhere. Your bank should be competing for your business, not just assuming that they should have it.
9. The system is likely to decide on your loan application
One of the assumptions that people make is that they are getting a personal decision when they talk with a banker in person. The perception is that the banker can make decisions locally. However, if the bank is branch of a national bank, it is far more likely that the system will make the decision. A banker may talk to you about your options, but ultimately your information is fed into a computer system and reduced to a number. Which means the system is deciding. Unless you are banking at a smaller, community bank, and talking to the owner or manager, chances are an impersonal system will make the ultimate decision about your loan.
Reprinted with permission from Money-Rates.com.
Miranda Marquit is a columnist for Money-Rates.com.