JULY 2008


Sick of being gouged by bank fees?

Beat the banks at their own game with these simple strategies

5 tips to beat the banks

1 Don't make five $20 bank machine withdrawals. Take out a lump sum of $200.

2 Most low-fee accounts demand a minimum monthly balance to waive bank fees (from between $1,000 to $5,000). That money could be earning higher interest elsewhere. Pay the monthly fee and save on extra fees by keeping your transactions to a minimum.

3 Restrict withdrawals to your own bank's machines.

4 Use your credit card instead of debit for store purchases and pay it off each month. But don't do this if you're already carrying a big balance.

5 If you must debit, combine a purchase with cashback to get the most out of a transaction.

Bank fees can hit your wallet hard — sometimes sucking out $30 or even more each month, often without you even noticing. Physicians are too busy to take the time to shop around for an account that fits their lifestyle, so chances are you're spending much more than you need to. Doctor, it's time to stop contributing to those billion dollar bank profits.

Our guide will let you in on strategies to beat bank and bank machine fees while keeping your money where it should be — in your wallet.

It's much easier — not to mention safer — to carry around a debit card than a wad of rolled up bills, so many physicians prefer to make debit purchases and carry small amounts of cash.

But that's where the banks really get you. The cheapest chequing accounts only offer a limited number of uncharged transactions before billing you a dollar or more every time you make one. If you're the type to use your debit card for every chocolate bar or newspaper purchase, you're surely being fleeced.

To find an account that fits the way you spend, check out the Financial Consumer Agency of Canada's online account finder — it's a small questionnaire that evaluates your needs and picks an account that's right for you (www.fcac-acfc.gc.ca/eng/consumers/ITools/CoB/default.asp). Avoid pricey unlimited transaction plans, though, as they can cost you over $140 a year.

When you use another bank's machine you may turn a blind eye to the $1.50 to $3.00 you're being charged. Don't! These fees add up. One clear strategy is to stay away from no-name ATMs and only visit your own bank.

Many stores also offer 'cash back,' a debit arrangement where you ask the store for an additional amount charged on top of your purchase, which is then given to you as though it were a withdrawal. Using 'cash back' you can lump a withdrawal and purchase together as a single transaction.

After you've set up your low-fee chequing account and started using the strategies to save your cash, you may want to squirrel away some of that dough in a high-interest savings account at one of Canada's online banks.

Why an online bank? Unlike most regular savings accounts, which only offer about 2.5% interest, virtual banks, like ING Direct, HSBC Direct and the Citizens Bank of Canada, offer 3% to 3.15% interest on your savings without any fees. President's Choice has a no-fee chequing account with unlimited transactions.



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