Bank of America, the second largest bank in the U.S., was the final to cave. They joined Chase (the largest bank), Wells Fargo, SunTrust, and Regions in abandoning their strategy to add new debit card fees on their customers.

This comes just days before “Bank Transfer Day” – a consumer advocate movement urging Americans to switch from (for-profit) banks to (non-profit) credit unions. The movement was created by a Bank of America customer who was upset with the implementation of the debit card fees and created a Facebook event. The Facebook page has since grown to over 36,000 followers.

A separate online petition was created to urge BofA to abandon the debit card fees. It received over 300,000 signatures online.

Bank of America Chief Operating Officer, David Darnell, released the following statement on their decision to drop the debit card fees:

“We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee. As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so.”

Power in Numbers

As I stated in my post on banks with no checking account or debit card fees, you can vote by taking your business elsewhere. This is happening more and more lately, and to surprisingly effective results.

The Internet has truly powered consumers by providing a means to communicate information like new corporate fees and providing a platform for consumers to join together to create movements against unreasonable corporate actions.

Netflix’s streak of price increases and foolish move to split the company in two enraged customers to the level of millions unsubscribing, tens of thousands of negative comments on the Netflix blog, and the company stock price dropping 75% this year. Finally, the company caved, and decided to abandon splitting the company.

I find these examples absolutely exhilarating and refreshing. It gives me renewed faith in the power of the Internet, in consumer awareness and advocacy, and in our country. And it all happened without government intervention. Good stuff!

Just the Beginning

Consumers have won this battle, but I don’t think that it will stop banks from finding other crafty new fees to implement in order to drive corporate profits higher. Banks exist for one reason – to make money. And when an egotistical banking executive’s bonus or job is on the line if he/she can’t drive year over year profit growth, price increases and new fees are often bound to be passed on to customers.

Stay on your toes, stay vocal, and don’t be afraid to take your business elsewhere if you need to.

Maybe someone needs to start a “Comcast Transfer Day”… hmmm….

Big Banks Abandon Debit Card Fees: Score Another Win for Consumers! is copyrighted by 20somethingfinance.com without consent to republish.

Bank of America ($5 monthly debit card fee) and CitiBank ($15 or $20 monthly checking account fee) started adding new fees to help replace billions of lost revenue that resulted from an amendment to the Wall Street Reform & Consumer Protection Act that cuts debit card swipe fees by the banks 44 cents to 23.9 cents on an average transaction. This change, lobbied by merchants, was intended to lower the costs for merchants and ideally consumers. The change kicked in October 1.

The other, unspoken agenda in adding these fees is that these banks are hoping that those who use their debit cards will simply switch to a credit card, which will be more profitable for the bank if these customers end up paying interest on their debt.

Is this the start of a bigger fee-happy trend? Absolutely. Banks will look to increase their fees to replace the lost revenue, estimated to be around $1.3 billion per month. They threatened Congress prior to the passage of the legislation that they would retaliate by increasing fees and they have delivered.

Did you expect anything less? These greedy banks still get 23.9 cents per swipe, ATM fees, and the needed liquidity that you allowing them to hold your cash provides. And now they want to charge you to use your own money so that their executives can maintain the same ridiculous bonuses? NO. EFFING. WAY!

So where can you take your business?

You can protest by taking your business elsewhere. In the process, you might start wondering why you haven’t done so earlier. Reader, Sandi, writes to me in response to that post:

It’s for that reason that I plan on leaving Bank of America before the end of this year. The $5/mo debit card fee is the last straw. I’m looking into alternative banking options and am strongly considering Charles Schwab. What do you know about their checking accounts and do you recommend any others. I’ve been spoiled by Bank of America’s online bill pay, and most other banks aren’t as good. I’d love your input.

Awesome to see readers standing up for themselves. Fortunately, there are still plenty of alternatives out there for free checking accounts and debit cards. Offers with credit unions can vary, but the four banks that made the list all offer:

• free debit cards
• free checking accounts
• no minimum balance to avoid fees
• free online banking & bill pay

1. EverBank

This was a late addition, but EverBank has perhaps the best offering right now with no fees, an interest bearing account, reimbursed ATM fees and they’ll even pay you $60 to switch to them!

• Monthly Account Fee: $0
• Debit Card Fee: $0
• Opening Deposit: $1,500 deposit to open
• Checks: free checks
• ATM Fees: zero ATM fees – if your balance is over $5,000 they will reimburse you the ATM fees from other banks.
• Interest: EverBank guarantees that you will earn interest that is in the top 5% of what all banks offer.
• Cashback Rewards on Debit Card: n/a

2. PerkStreet Financial

PerkStreet Financial offers a no fee MasterCard debit card and checking account. With PerkStreet, online bill pay and banking and banking are free and there is:

• Monthly Account Fee: $0 monthly account fee if you have at least one debit card transaction.
• Debit Card Fee: $0
• Opening Deposit: A$25 deposit will get you started.
• Checks: free checks
• ATM fees: 37,000 ATM’s nationally that you can withdraw from without surcharge, otherwise $2 surcharge.
• Interest: no interest earned on your balance.
• Cashback Rewards on Debit Card: Perkstreet’s biggest appeal is that at a time when other banks are beginning to charge you for debit cards, they offer you cash back! If you maintain a $5,000 balance, you get an outstanding 2% cashback. If under $5,000, you’ll get 1%. There are also 5% cash back categories throughout the year with PerkStreet.

3. Ally Bank

I’m a big fan of Ally Bank because they don’t do business like other large, national banks. They create appealing products that don’t take advantage of their customers. Ally Bank Interest Checking offers:

• Monthly Account Fee: $0
• Debit Card Fee: $0
• Opening Deposit: $0 deposit to open
• Checks: free checks
• ATM Fees: zero ATM fees – they actually pay for fees charged by other banks!
• Interest: you earn interest on your balance.
• Cashback Rewards on Debit Card: n/a

4. USAA

USAA offers financial services to active members of the military, veterans, or their family members (here is a list of parties that can become a USAA member). USAA’s free checking account offers:

• Monthly Account Fee: $0
• Debit Card Fee: $0
• Opening Deposit: $0 deposit to open
• Checks: free checks
• ATM Fees: no charge on first 10 withdrawals and they’ll refund up to $15 per month that other banks charge.
• Interest: you earn interest on your balance if over $1,000.
• Cashback Rewards on Debit Card: n/a

5. Ing Direct

One of the first online banks, Ing Direct, is still one of the best. Ing Direct’s Electric Orange checking account offers:

• Monthly Account Fee: $0
• Debit Card Fee: $0
• Opening Deposit: $1 deposit to open
• Checks: free checks
• ATM Fees: No fees at 35,000 Allpoint ATM’s.
• Interest: you earn interest on your balance if over $1,000.
• Cashback Rewards on Debit Card: n/a

Related Posts:

• 10 Free Financial Services
• Does Closing a Savings or Checking Account Hurt your Credit Score?
• New Bank Overdraft Protection Fee Rules
• Ally Bank Raise your Rate CD

5 Banks where Checking Accounts & Debit Cards are Still Free is copyrighted by 20somethingfinance.com without consent to republish.

A reader writes in with a good question on closing a checking account and I thought I’d share the answer, to provide some insight:

“G.E., I have an older checking account that I want to close. Will closing a checking account hurt my credit score or credit history in any way? Are there any other possible negatives to doing this?”

The short answer is NO (so is the long… but let me explain why…).

Credit reports and credit scores are out there as a means for lenders to determine if you are credit worthy based on your past and current borrowing and payment history.

Savings and checking accounts, on the other hand, are both assets that you own. As such, they have no impact on your credit (what you borrow). So they won’t show up on your credit reports and your credit score will not be negatively impacted by shutting them down.

The only time your checking account may come in to play in a lending situation is if a lender asks you to prove your assets. I have had this happen when taking out a mortgage. Sometimes lenders like to see that you actually have liquid cash somewhere that you can tap, if needed, to pay them back. But closing a savings or checking an account would still have no impact on your credit score, whatsoever.

I have heard of banks flagging customers for abuse of closing and opening checking accounts to score free promotions. So that might be your only downside. Who would do such a thing?

Related Posts:

• How to Improve your Credit Score
• How to Get Free Credit Reports
• What is a VantageScore?
• CreditKarma Review

Does Closing a Savings or Checking Account Hurt your Credit Score? is copyrighted by 20somethingfinance.com without consent to republish.

Overdraft Fees: The No Permission ‘Service’ Fee

At my local bank, the kind teller made it sound as though the bank had gone above and beyond competition by offering me ‘overdraft fee protection’ in the past. In reality, they were charging me a $35 ‘convenience’ fee for covering purchases that I didn’t have enough of a balance to cover with my debit card. Up until now, banks were able to automatically enroll you into this service. Not anymore.

The Federal Reserve is beginning to require financial institutions to get your permission to enroll you in a program that covers overdrawn debit and ATM transactions for a fee. The rules took effect July 1 for new customers and will kick in Aug. 15 for existing checking account customers.

Your two options look like this:

1. Enroll for ‘overdraft protection’.
2. Don’t enroll for ‘overdraft protection’.

What is Overdraft Protection?

If you decide to enroll for overdraft protection, your bank or credit union will ‘save you the embarrassment’ (as many of them are phrasing it) of having your debit card declined by covering the charge that you have made. For this ‘convenience’, they will tack on an overdraft protection fee. Often times, this fee is in the range of $30-$40. Enrolling in overdraft protection often means keeping things the same way that they’ve been in regards to bank overdraft fees.

Note that the new federal opt-in requirement does not apply to checks. It only applies debit card and ATM transactions.

What if I Opt Out of Overdraft Protection Services?

Simply declining overdraft protection service is the equivalent of saying, “If this charge takes me below a $0 balance in my checking account, then don’t let the purchase go through.” You will not be able to make the purchase, but you will also save yourself the overdraft service fee.

Not only do you save the fee, but not being able to make the charge gives you a warning that you’re out of money in your account. This, in itself, is an automatic protective measure against spending money that you don’t have.

Simply ask yourself if being charged $35 to avoid getting your card turned down for a $2 cup of coffee is a service that you really want.

Playing devil’s advocate, if you have an emergency, and are willing to accept the overdraft fee, you will want to choose a bank that has a forgiving overdraft policy. I’ve highlighted a few examples below.

How Online Banks are Handling Overdraft Protection Fees

I can’t tell you how your local bank or credit union is handling overdraft fees, but I can give you an overview of how the national online players are handling them at the moment for comparison. In general, they are very lenient in comparison to the standard $35 fee that most banks have charged historically. Here’s a look at the three best policies towards overdraft fees that I was able to find for online checking accounts.

Ally Bank Overdraft Fees

Ally Bank does not charge you for an ATM or debit card overdraft (but your transaction probably will not go through). They have a $9 daily 1-time maximum fee for checks. Ally also lets you link your checking account to an Ally savings or money market account so that if you overdraw funds from your checking, it will automatically transfer from one of them. They do not charge a fee for this (most banks do). All-in-all, Ally is very consumer-friendly in these overdraft policies.

Ing Direct Overdraft Fees

Ing Direct’s Electric Orange account has an overdraft fee calculator. They charge a small APR (recently 7.25% APR) on the overdraft versus a dollar amount. The overdraft fees end up being very low. For example, at current rates, if you overdraft by $1,000 and maintain that negative balance for 10 days, you’d only pay $1.99 in overdraft fees. If you’re looking for some leeway with overdrafts and don’t want a hard-stop, this is not a bad option.

Everbank Overdraft Fees

Everbank’s checking account overdraft fee is similar to Ing Direct’s in that they charge a % rate (currently .03% daily), which equates to about 10.65% annually.

Overdraft Fee Discussion:

• Has your bank approached you about the overdraft protection fee changes? How did they phrase the opt-in to you?
• Have you opted in to an overdraft protection service? Why or why not?

Related Posts:

• Everbank MarketSafe Metals CD
• Ally Bank Rising Rate CD
• How to Wipe Out Bank Overdraft Fees
• 5 Banks with Free Checking Accounts & Debit Cards

A Guide to the New Bank Overdraft Protection Fees Rules is copyrighted by 20somethingfinance.com without consent to republish.

If you’ve been in the same situation, you might want to look into a ‘raise your rate’ CD. I discovered one of these offered by Ally Bank, called the Ally Bank Raise Your Rate CD. I didn’t have any luck finding a similar option at another bank, so if you are able to, please share in the comments.

What is a ‘Rising Rate CD’?

Essentially, a ‘rising rate CD’ is a Certificate of Deposit that allows you to increase the interest rate from whatever it is at the time you make your deposit to a higher interest rate at a later time within your CD’s life. It is a great option if you want to make a decent yield on your savings at a rate higher than a savings account, but are fairly certain that rates will go up during the length of your CD’s term. We’re exactly in that situation right now, in my opinion. I can’t see interest rates staying at these historical lows for much longer, particularly with the impending inflation coming from the debt our country is in. So why not earn a decent yield now and an even better yield later?

The Ally Bank Raise Your Rate CD

I’m a big fan of Ally Bank because they really do offer products that are in their customers’ best interests. The Ally Raise Your Rate CD is definitely one of those products. It is a 2-year term CD with some great features that put it at the top of its class:

• Open with $0 – no minimum to open
• No monthly fees for the CD
• Ten Day Best Rate Guarantee – note that this is one of my favorite features. Instead of taking whatever the interest rate is the day you fund the CD (like most banks), Ally will apply the best interest rate within ten days of opening or when your Ally CD renews, you automatically get the best rate offered during those ten days.
• Daily compound interest for maximum earnings (most banks do monthly or quarterly compounding).
• FDIC insured.
• Automatic renewal at maturity – Initial deposit plus earned interest

But, the key feature, and the reason that I thought this product was worthy of review on 20somethingfinance, is the ability to ‘raise your rate’ on the CD. If, at any point, during the 2 year CD term you would like to increase your initial interest rate yield to whatever it is at the present time, you can call Ally and ask them to increase the rate. And there is no cost to do so. How beautiful is that? Protection, or insurance, against rising rates! Now there is no excuse to sit on the sidelines with your cash because you are afraid rates will increase.

Bank CD Rate Comparison

How do Ally Bank CD Rates compare with other banks? Pretty darn well, actually. At the time of this post, Ally is offering 1.99% on this CD (you may want to check their site for the latest rate). At the same time, their biggest online bank competitors were offering much less for the same term – Ing Direct at 1.10%, Bank of America at 1.10%, Chase at 1.01%, and HSBC Advance at 0.75%. I’d encourage you to compare Ally’s yield at the time you read this with the other banks listed to make sure it is still the best. But as of right now, they are not only beating the competition, they are blowing it out.

Any Downsides to the CD?

I always try to give fair product reviews and cover the downsides. No erroneous fees – check. No high minimum – check. No huge penalty for early withdrawal – check. Like most CD’s, the Ally Raise Your Rate CD has an early withdrawal fee if you pull your money out before it matures. The early withdrawal fee is 60 days of earned interest, which is actually much more lenient than other CD’s that I have owned. I couldn’t find any downsides or ‘tricks’ to screw over the little guy in the fine print.

Final Thoughts on the Ally Raise Your Rate CD

If you’re in the market for a CD or have cash sitting around in a checking or savings account, I don’t think there is a better CD on the market right now than the Ally Bank Raise Your Rate CD. If you’re looking for an alternative CD, you might want to check out my review on the EverBank MarketSafe Diversified Metals CD, but that closes May 13.

Ally Bank CD Discussion:

• Have you purchased a CD from Ally before?
• What interest rate are you currently earning on your CD’s?
• What do you think of this CD?

Ally Bank Raise Your Rate CD: Insurance Against Rising Interest Rates is copyrighted by 20somethingfinance.com without consent to republish.

Since it’s a unique product, I thought it would be best to cover the questions that I had about it and provide the researched answers I found.

What is the EverBank Diversified Metals CD?

• It is a 5-year CD that takes the spot price of gold, silver, and platinum and offers a potential 50% upside (plus the initial deposit), with a 100% principal deposit protection (meaning that your won’t lose money if the value of those commodities goes down).

What is the Term for the CD?

• 5-years. You cannot withdraw your funds early – it is a 5-year commitment.

What is the Minimum Deposit?

• $1,500

Is it FDIC insured?

• Yes

Any Fees?

• No

How does EverBank figure out the Return?

Is there a Downside? Only the Opportunity Cost of Having your Money Elsewhere

• Well, technically, no, if you were in cash the entire time. If you were in the stock market, your return would be unknown – and nobody knows where the stock market will be in 5 years. If you were in a CD over a 5 year period that earned 2.86%, your compound return would be approximately 15% on top of your original deposit.

Would you Give the Everbank Marketsafe Metals CD a Shot?

• Whether or not you put your money into this EverBank offering, I think it begs a discussion about where you will be putting your money over the next 5 years?
• Do you think the market run-up will continue over the next 5 years and exceed a 50% return?
• Do you think commodity prices will continue to grow?
• Have you had an experience with a unique bank product like this before?

Related Posts:

• Ally Raise your Rate CD
• 5 Banks with Free Checking Accounts & Debit Cards

EverBank MarketSafe Diversified Metals CD – 50% Upside, Zero Downside is copyrighted by 20somethingfinance.com without consent to republish.

Something about this season always makes me want to de-clutter things, particularly my finances. Here’s a list of the things that I’m doing this Spring (and typically do every Spring) to keep my finances in order. All can be accomplished in an afternoon. It will be time well spent.

1. Shred Old Financial Documents

De-cluttering your finances starts with reducing paper clutter. I’m conservative in keeping tax records going back 7 years and about 1 year on everything else. Beyond that, I have been shredding everything. I recently shredded enough documents to fill 5 paper grocery bags! I’d recommend getting a cross-cutting shredder that shreds 8 or more pieces at the same time and also shreds old plastic cards, like the Fellowes Powershredder. If you’re throwing this stuff in the trash, un-shredded, you’re leaving yourself vulnerable to identity theft and fraud.

2. Check your Free Credit Report and Clean Up Any Discrepancies

AnnualCreditReport.com (the real-deal website, mandated by the federal government) offers you three free credit reports annually. Space them out every 4 months to check for discrepancies and avoid taking any unnecessary credit score hits. For more on annualcreditreport.com, check out my post on how to make the most out of these free credit reports.

3. It’s Budget Cleanup Time!

Yes, I know you didn’t want to hear this one, but it’s oh so important. I wrote a pretty comprehensive post that includes a budget spreadsheet that I designed and used personally. Check it out, and see where the holes in the bucket are. Then plug them ASAP.

4. Stop Settling for Paltry Interest Rates on Short-Term Cash Holdings

For your emergency savings fund and other short-term cash holdings, you might as well earn best in industry rate yields on your savings. Right now, that is around 1.25%, but it changes frequently. The 5 online banks that I usually see at the top of the list for savings rate yields are Discover Bank, Ally Bank, EverBank, and Ing Direct. All offer a pretty comprehensive product offering if you want to expand beyond a savings account.

5. Move Long-Term Investment Funds From Savings & Checking Accounts to Investment Accounts

I give myself low marks for letting long-term investment funds sit in my bank account. With the market run-up, I missed out on thousands of dollars worth of capital gains because I simply wasn’t keeping up on moving those assets over to investment accounts. Don’t get caught sitting on interest rates of 1% or below and having inflation eat away at it.

6. Consolidate Your Brokerages

Having too many brokerage accounts is a great way to easily lose track of your financial allocations. I recently switched my IRA from ETrade to TradeKing. More recently, my wife rolled over her Roth and Traditional 401K from her last job to a TradeKing Roth and Traditional IRA. TradeKing offers IRA’s without annual fees or inactivity fees. And trades are just $4.95.

For non-retirement accounts, I moved my funds from Scottrade to Zecco last year. I give Zecco high scores for having zero annual fees, no inactivity fees, and free trades (however, they do charge an annual fee for IRA’s, which is why I prefer TradeKing for that).

7. Re-Allocate Investments

Once you have consolidated brokerage accounts, it’s time to do a little re-allocation. With the market having the run that it has had, now would be a great time to go through  your stocks, mutual funds, and other investments and make sure that the asset allocation is re-distributing to the correct portions. This might require moving some money around. In my case, it also means moving my accounts around.

8. Get the Best Debit & Credit Card Rewards

First off, cancel any credit cards you are not paying in full each month. Glad we cleared that up. If you ARE going to effectively use a credit card, make sure it is one that is giving good rewards. I average about 2% cash back on the TrueEarnings Card from Costco and American Express (check out my Costco American Express review for more info).

I also get 6% cash back from the best grocery rewards card on the market, the American Express Blue Preferred card.

Additionally, if you are using a debit card, you might as well get cash back on it as well. That’s where PerkStreet Financialcomes in. They offer a Visa® Debit Card that actually pays you back at a rate of 1% (versus the standard 0.4%). PerkStreet is currently offering a special promotion of 2% cash back for the next 4 months. Additionally, you are eligible for a bonus $50 just for funding your account with $250 and making 25 transactions in the first 90 days. Not bad!

What are you Doing to Spruce Up your Finances this Spring?

8 Personal Finance Spring Cleaning Ninja Moves is copyrighted by 20somethingfinance.com without consent to republish.

With the impending Credit Card Act looming, a large number of credit card providers are starting to charge annual fees for the use of their cards for the first time in a long time. I find this problematic, since the only reason I use credit cards for right now is for the perks that they provide, and annual fees deeply cut into that benefit.

That’s why I’ve been looking for a debit card with comparable benefits. Debit cards typically don’t offer good rewards programs, however.

But I just discovered PerkStreet Financial and I’m still trying to figure out what the catch is. It really does seem like a great deal.

What is PerkStreet Financial?

The PerkStreet Financial Debit MasterCard actually offers rewards comparable to or better than a lot of credit cards along with a FREE checking account. You get your option of the following with PerkStreet: coffee, music, or 2% cash back on non-PIN based transactions when you have a balance over $5,000. I’d opt for the cash.

PerkStreet’s cash back is definitely better than most debit cards. The average debit card offers .04% rewards vs. PerkStreet at 2%. Only 17% of debit cards offer rewards (Source: BAI/HItachi 2008 Study of Consumer Payment Preferences).

Other PerkStreet Financial Benefits

- your first box of checks are free
- no fees for using your account
- nationwide network of 37,000 ATM’s (largest in the nation)
- FDIC insured up to $250,000 through a partnership with Bancorp Bank to offer financial services
- free online banking and bill pay
- no account minimums

The Drawbacks on PerkStreet

The only I could find was a $4.50 fee if your account is completely inactive for the month (which shouldn’t happen if you pay any of your bills or make any charges with your card). Standard overdraft charges apply ($30), less than most banks.

PerkStreet Financial definitely seems like it’s a great alternative to credit cards!

Related Posts:

• 10 Free Financial Services

PerkStreet Financial Review: A Free Debit Card with Rewards is copyrighted by 20somethingfinance.com without consent to republish.

Back in 2005, I started a Roth IRA with ETrade because they offered a ‘no-fee IRA’ and they had a reputable name. They were my first online broker. All stock market losses aside, everything had been running smoothly until I noticed something recently. I had a negative cash balance in my account (and I never trade on margin, or borrow from a broker). Of course, I decided to do a little digging.

What I found was that on my December, 2008 statement there was a $25 ‘Annual Custodial Fee’ charged to my account. Being that I signed up for a ‘no-fee IRA’ to avoid these kinds of nickel and dime charges, I was a little upset about this. So I called ETrade and went back and forth with an agent on the phone for about half an hour debating the merits of this $25 fee. His side of the tale, echoed on their website is that:

There is no annual custodial fee for IRAs if you sign up for and maintain electronic delivery of statements and confirmations. If you choose paper delivery of these documents, you will be subject to a $25 annual custodial fee unless the total assets in your linked E*TRADE Bank and E*TRADE Securities brokerage accounts are $25,000 or more. Other fees may apply. May be subject to change.

Yes, I was receiving paper statements (but only for the last year or so). I had not received a ‘Custodial Fee‘ in each of the previous 3 years. All of a sudden in 2008, I started getting paper statements again. I really didn’t think anything of it and had forgotten the ‘must get electronic delivery’ catch. But why did I start getting paper statements again? I hadn’t re-opted to get them. I also didn’t receive any notification that I’d be getting them again either.

The agent on the phone couldn’t tell me when I opted to receive paper statements again. My thought is that E-Trade periodically updates their users electronic delivery settings – but this is speculative based on my experience.

Twenty minutes of being nice and debating the merits of the fee got me nowhere on the call, so I finally firmed up and said ‘the only way that I’m going to leave this call happy is if you refund the $25 fee, or you can shut down my account right now.”

He did. I’ll give them credit for that. Threatening to leave usually works.

Lessons Learned from the ETrade Custodial Fee Fiasco

1. Check your cash balances in your accounts periodically to make sure that you are truly getting a ‘no-fee’ account.
2. If you start receiving paper statements out of the blue, remedy it before you get charged.
3. Read all the fine print when starting brokerage accounts. ‘No-fee’ is not always as certain as it sounds with all the little catches here and there.
4. If you do get dinged with fees you didn’t expect, fight them. New customer acquisition is always going to be more expensive for brokerage firms than a frivelous custodial fee. They know that, and if they are smart they will choose not to lose you.

Online Broker Fee Discussion:

• Have you had similar experiences being dinged on fees that you were not expecting? What did you do?
• Do you have any positive ‘no fee’ really means no fee stories to share?

Related Posts:

• My Review of Zecco
• TradeKing Review
• How to Wipe Out Credit Card Late Fees and Bank Overdrafts

My Battle with ETrade Over a $25 Fee on a No-Fee IRA is copyrighted by 20somethingfinance.com without consent to republish.

If that’s your outlook, it’s time to change our mindset and look to why everyone should be focusing on building up savings. After all, our entire financial futures are at stake. An automatic savings plan is the way to do it.

Why an Automatic Savings Plan is Essential

1. Saving for Emergencies

A savings account can act like a sort of fire extinguisher when an unexpected catastrophe puts fire to your wallet. It’s a good idea to have three to six months of living expenses socked away in case of a job loss. That might take some time to build, so in the meantime, put aside $1,000 to help pay for sudden expenses. Then, build your ideal emergency fund.

2. Saving for retirement

You’d like to stop working at some point, right? Of course, you do. Well, without money in retirement, how do you expect to pay your bills after you’re no longer working? Saving money for retirement helps ensure you’ll have money to cover necessary expenses (and some luxuries) during your golden years.

3. Saving for a vacation

A lot of people don’t think twice about putting a vacation on a credit card. When you do it that way, you end up paying more for your vacation that it actually cost. That’s because the credit card balance accrues interest until you pay it off completely. But, when you save up for a vacation, everything’s paid for in advance. You can also relax without worrying about the credit card debt you face when your vacation’s over.

4. Saving for financial goals

The most coveted things in life are also the most expensive. A house, a car, and an education are all things you have to work toward. Putting money away makes each of those easier for you to reach.

Why You Should Save Automatically

No matter how much you realize that saving is important, it’s still not as easy as it seems. There’s just something about parting with money without an immediate benefit that makes saving boring. Before you give up on saving all together, consider making your savings automatic.

When you save automatically, the money automatically deposited into your savings account on some periodic basis. For example, you might have $100 automatically deposited into your savings account each month. After a year, you’d have at least $1,200 saved up, more if your account has a good interest rate.

As a result, your financial future is no longer based on your will-power – it’s just going to happen.

How to Plan Your Savings

Trying to understand personal finance without a heavy dose of financial planning will get you no where fast. You have to know what your goals are before you can determine if you’re doing the right thing. You always need to plan your finances.

Saving money is no different. Before you set up your automatic savings, you have to figure out three things.

How much will you save? Coming up with the answer to this question can be easy or hard. If you have a written budget that you use to manage your money, it will be easier to refer to your budget to see how much you have left over for saving. On the other hand, if you don’t have a budget, you’ll have to do some calculating to see what’s left over after you pay bills.

How often will you save? Base the frequency of your automatic savings on your pay periods. If you get paid once a month, then save once a month. If you get paid every other week, then save every other week.

What are you saving for? You should have a savings goal. Without one, it will be easy to stop saving and start spending the money on something else.

Once you’ve made those critical decisions, you’re ready to move on and make your savings automatic.

How to Set up an Automatic Savings Plan

There are two basic ways to save automatically, and either one works perfectly fine depending on your situation.

1. Automatic Savings through your Bank:

Save automatically, just divide your bank accounts into two: the account where you spend money, and the account where you save money. Every month, have X% automatically taken from your checking account and placed in your savings account. Check out EverBank, Ally Bank, or Ing Direct if you’re looking for a bank to do this with.

You just made your savings automatic.

If you’re comfortable with computers at all, then a high-yield online savings account is probably your best shot. One of the benefits of having an online account is that it keeps your money far enough away that you can avoid spending impulses, but close enough to reach in an emergency.

Make sure set your automatic transfer to occur close to the payday, but not before. That way you can be sure the money is available and you won’t have to deal with a potentially expensive overdraft.

If you choose not to open an online account, check with your bank to see if you can connect a savings account to your existing checking account and set up a recurring transfer from one to the other.

2. Automatic Savings from Direct Deposit

Finally, if your employer uses direct deposit, you might ask your human resources or payroll department if you can set up a direct deposit for two accounts. You would have your savings deposited into your savings account and the remainder into your checking account.

The best thing about automatic savings it that once you set it up, you don’t have to worry about saving again. You can monitor progress toward your financial goes without feeling the sting of losing money. In some ways, it’s like getting paid twice.

Automatic Savings Discussion:

• Do you have an online bank account? Where?
• Do you have your savings set automatically?
• Do you have any tips for making the process smoother or more effective?

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How to Set up an Automatic Savings Plan is copyrighted by 20somethingfinance.com without consent to republish.