Saying No to Standard Overdraft Protection – Link to Your Savings Bank Account Instead

The new consumer friendly reforms that the government has pushed down the throats of the banks have taken effect. And do the banks ever hate it! No more are they going to be able to sign you on for overdraft protection without your permission and charge you a $35 overdraft fee each time you spend more than what you have in your bank with your debit card or a check. Those fees kick in for going over as little as two dollars. They actually make billions of dollars this way each year on the backs of the paycheck-to-paycheck crowd. Some of these families actually pay in excess of $1000 each year just for going overboard a few times each year by as little as two dollars at a time. If the banking customer can’t really manage a simple checking account (or a savings bank account with a debit card on occasion) and make sure they don’t go over, surely it isn’t the bank’s fault, I know is that?

Judge Alsup in a landmark California case has called it an unfair trade practice earlier this year in an August ruling against Wells Fargo. What the bank did is pretty much standard practice all over the country. Let’s say that you have $100 left in your account, and you spend $10 three times on minor purchases through the day. You’re confident now that you have $70 left; you need to buy a $90 coffee machine. You realize that you would need to overdraw by $20; you feel that it might be worth it, because you really need to buy a gift for a wedding. When you get your statement the following month, you see that you’ve been charged a $35 overdraft fee not the one time you expected, but two times. This is because the bank reorders your purchases so that the $90 coffee machine comes first, and the three $10 items come later. This is what the judge says he finds reprehensible. Wells Fargo and that particular lawsuit were forced to refund more than $200 million collected out of these kinds of devious trickery.

The banks are going all out to find a way to trick you into signing up for their fraudulent practices again. What the consultants are telling them is this – only one in five checking account holders (or rarely,savings bank account holders) in the country are routinely careless with their account balances. These are the most profitable accounts for the banks to deal with. So the banks just need to ignore everyone else and somehow get these people to voluntarily sign up to get robbed again. The banks are stationing salespeople next ATMs to get people to sign up. They are calling them, offering them cash bonuses – everything they can possibly do to get them to drop their guard.

So the next time you’re accosted at an ATM or you get a phone call from the bank asking you why you would put yourself in a situation where you could get embarrassed at the restaurant not having enough money on your debit card, tell them that you are happy to be embarrassed. It’s far better than getting robbed blind three times a day.If you do want real overdraft protection, ask them to link your checking account to your savings bank account. That’ll teach them.

What is a Saving Bank Account?

A saving bank account is basically a account where you deposit your money into this account and thus keep it safely. When you keep your money in this account, you will start earning interest on it. In other words, the bank pays you for keeping your money in the savings bank account. This earning is in the form of interest earned on the total amount kept with the bank. The bank takes care of the deposited amount. If you could carry your cash with you, all the time or keep it in the house, you are likely to loose it in the form of robbery or your house could be destroyed along with the money during, calamities. But if the same calamities take place while your money is kept in the bank, it will be the banks responsibility to pay you back at any cost. Thus you will not only cultivate the habit of saving money, by keeping the money in the saving bank account but, you are also assured that your money kept with the bank is safe and sound.

The bank provides interest on your savings and at the same time, banks also earn money for themselves by providing loan money to business people on consumers. So people deposit money in the bank and this same money is then given to other people who pay interest on the borrowed amount. Banks make money by charging interest amount which is more than the interest paid to the person who puts his money in the bank. Everyone including businessman, will benefit by having a bank account for themselves as it provides various facilities such as providing check payments, keeping of records of various transactions involved between the employer and his clients. Thus checks are the best way to keep a track of business transactions, even at a personal level. You can save your time and money without having to travel physically to the person to whom you have to make a payment. All that you need to do is just draw a check in the name of the concerned person and the bank does the needful. These days you have online transactions which are very common. You can transfer money from your own account to other peoples account just by a click of a button. I am speaking about online bank to bank transfer.

These kind of accounts help you to keep your extra money with the bank for which you earn interest amount. So instead of keeping it at home which is prone to risk, you can always keep your cash in a saving bank account. By this way, you also cultivate a habit of saving. You must try to keep a part of your monthly earnings in a saving bank account. Having accumulated enough savings over a particular period of time, you can then use your savings to make specific purchase. You can also use your savings for a rainy day.

This has now become a part and parcel of our lives. As soon as the person starts earning money, he or she must have a account in order to keep his earnings in his account and thus safe guard his own money and also be able to earn interest money paid to you by the bank. You must always keep a track of the amount you have in your bank account. You must maintain an average quarterly balance, otherwise the bank will charge you a penalty for not being able to maintain the minimum balance that is required by the concerned bank.