Thrifty tips--Banking

In Canada, we feel very comfortable with our banks. But, we must not forget that banking is a business. In the past, banks made most of their money from mortgages and loans. These days, an increasing proportion of their profits come from non-interest income.

What is non-interest income?

These are the service fees, ATM fees, overdraft fees, stop-payments fees, dormant account fees, and a number of other convenience fees that can make our one-stop financial shopping very expensive.

Keep the following tips in mind when selecting and using a bank:

• Banks charge fees based on how much you use your account. If you do only online banking and never write cheques, you may be able to qualify for an account with lower fees.

• Avoid NSF cheques. If you do not have sufficient funds to cover a cheque you have written, you could be charged $40 or more. At TD Bank, the current charge is $42.50.
  

• Try not to use your overdraft protection. It is a good idea to check your balance frequently; some banks charge up to 21% if you account dips below zero.

• Avoid ATM charges. If you withdraw from other bank machines, you can end up paying $1.50 or more for each withdrawal.
  

• Do not obtain a cash advance from a credit card. You can end up paying over 20% in interest from the day you withdraw the money until you pay off the balance.