A long time ago, I had written a note about some banking tips, seeing as how I’m a banker myself. I totally forgot about it until I had found it while wasting time on the Facebook. It bugs me that I hadn’t posted it on the blog, but I intend to remedy that now, with a few modifications/additions.
I’ve been working in the banking industry for the past six years, and I learned a lot about how to handle my own finances. Seeing many many many customers with overdrawn accounts and hit with countless fees, I feel a little pity for them since they don’t know how to handle a debit card. And now most of you are in/done with college. As adults, we pretty much have to take care of our own money situations and have checking accounts. While it goes without saying, the basic principle to handling a checking account is to never ever withdraw more than you have in your balance, aka OVERDRAW YOUR ACCOUNT. You will be hit with crazy NSF (Non-Sufficient Funds) and/or Overdrawn fees, which can amount to $35 each, depending on your bank. So keep track of your purchases!
But here are my other little tips that you may or may not know:
CASHING CHECKS
- I always try to cash a check out first and then deposit the cash. Cash will post IMMEDIATELY to your account balance and is there to spend. This also avoids the trouble having a bounced check deposited. This will always generate a fee for you from your bank, even though it wasn’t your check that was bad. This leads me to…
- Always try to take the check to the bank it was from (it will always say who on the check) and try to cash it there. Depending on the bank, you shouldn’t be charged a fee for not being a customer since it is THEIR check. You WILL need two forms of ID. And most banks ask for your thumbprint on the check for fraud protection (aka stolen checks). Doing this also lets you know if the check is bad or not, but due to privacy rules, the bank cannot say that there is no money in the account; they can only usually say “We can’t negotiate this check at this time. Please check with whomever wrote you this.” Now you can go see that poor bum who wrote you that bad $.05 check and punch his face.
- Primary forms of ID that banks will accept: Driver’s License, Motor Vehicle Administration ID Card, Passport, Military ID.
- Secondary forms of ID that some banks will sometimes accept: Employment ID, Student ID, Credit Card, Bank debit card.
- Forms of ID that banks will NOT accept: Membership IDs (i.e. Sam’s Club, Blockbuster), Social Security Card, Birth Certificate.
- If it is a form of ID that is acceptable, make sure it has NOT expired! Banks cannot accept expired ID! They don’t put them on there for nothing!
DIRECT DEPOSIT
- I also have my work direct deposit my paycheck. This means that on payday, they will deposit my pay directly into my account. The money is there immediately for me to use. Therefore, I don’t have to have a check that I need to go personally and deposit and then wait for it to clear. Direct deposit is the way to go; easy and no hassle.
- Not really a banking tip, but more of a savings one: have a portion of your paycheck direct deposited to your savings or money market. That way you don’t see the cash in your checking and will be less likely to spend it. SAVE SAVE SAVE!!!!
DEPOSITING CHECKS
- Know when the business date ends. It usually is around 5PM for my bank. Most banks close at that time, but others (like in stores such as Safeway or Giant) will most likely be open until the evening as well as on the weekends. But note this: depositing a check after the business date ends means the check doesn’t get sent to the processing dept until the next business day. So if you come into a branch and deposit a check on Friday at say 6:30PM (cut off time is at 6 on Fridays at my bank), do not expect it to post over the weekend. The next business day is Monday and it will be sent that afternoon, and clear by Tuesday morning at the earliest.
- Checks usually clear by the next business day. If it is out of state (look on the check), then it will most likely take another 1-2 days. Depositing a check does NOT mean it is good to spend right then and there! Like I said, cash the check and then deposit the cash! It may be more of a hassle to go to the other bank (heck it may be impossible if there aren’t any branches in your area), but you should try to do it that way if you want to avoid some possible hassles.
ATM
- This should be obvious, but I’ll post it anyway. When using an ATM, try to use your bank’s ATM. Using another bank’s ATM will result in paying a $1-$3 fee per transaction from that bank for using their ATM. And depending on your bank, they might impose a foreign ATM fee on their side as well. Use your own bank’s ATM and get your cash for free. If there is no ATM around, you can also go to a grocery store, buy something, and use the debit option with cash back. You spend a little bit, but at least you get something and not throw cash away to the bank.
DEBIT CARDS
- Debit cards and ATM cards are two different things!!! Debit cards usually have the Visa logo on them, meaning you can use them to make purchases at merchants that accept Visa cards (in life and online). ATM cards are ONLY for ATM withdrawals! They cannot be used for purchases.
- Using a debit card will automatically authorize the bank to place a hold on those funds in your account. Buying that $5 meal with a debit purchase will mean that a pending $5 will post to your account. So if you had $4 in there, you will most likely be hit with a NSF fee. The only way I usually counteract this is to deposit cash the same day to avoid the fee.
- But really, you shouldn’t try that. Instead, try to always keep a $100 buffer in your checking. Don’t risk going in the red. That’s more of a personal tip than anything.
BRANCH BANKING
- As a bank teller, I can personally say that the mantra that you can “catch more flies with honey” works. If you hate dealing with a teller/banker, just be nice and polite and they will be courteous as well. If they aren’t, always ask for the manager, but always always ALWAYS be firm, polite, and not raise your voice.
- If you get hit with an overdraft fee, talk with the branch that you opened your account at. If not, any branch is fine as well, but the personal relationship with the branch personnel usually helps. If they know you, they are more receptive. Even though you know it is your fault for incurring an overdraft, be polite and ask the bank rep if it is in any way possible to reverse the fee. If this is your first, state that it is and that you will be more careful. Most reps can see how many times you have had your fees reversed, so be honest. If the rep cannot help, again speak with management. Be firm and state that you would appreciate the gesture of a fee refund. Do not abuse this! Meaning do not just overdraft all the time and expect your branch to refund you each time!
- The relationship with your bank helps with this instance, so if you can, try to visit your local branch a bit more frequently to make yourself familiar to the staff. As a banker, I love having customers who I know and treat me with respect and care. I always reciprocated that back to them when I could (this means making exceptions!)
- I might go into what these exceptions are, but I predict people reading them and go ahead and abuse/misuse the tip. These exceptions are usually on a case-by-case basis and I’ll probably grant it to you if: you are polite, have a great relationship with the bank (i.e. long banking history, steady balance, little to no overdrafts). I can’t/will not grant them to you simply because you have an emergency (too many fraud cases use that excuse, and they’re total liars! Way to ruin it for the rest of us, jerks!) or I know you personally outside of work.
- Also, if you get a teller trying to recommend you something, please don’t be mean! This is their job, but they are also looking out for you. We only recommend services that we think you might need. They won’t pressure you, so if you politely decline, they’ll of course thank you for your business with a smile and hope to see you again next time.
NSF
- Ah, yes… the dreaded Non-Sufficient Funds fee. There’s also a UAF (Unavailable Funds Fee) and Returned Item (you wrote a bad check) fee. But basically I want to cover the NSF fee.
- I get a good amount of people who come to me, crying about how they overdraft their account with some pretty creative excuses. You can tell me all sorts of sob stories, but it all comes down to this: We are only supposed to give fee refunds if it was due to a bank error. You are responsible for your account, and basically you should know how much you have and how much you can spend. It is not our fault you are spending money that isn’t yours!
- I am not totally heartless. I’ll grant courtesy refunds, as covered earlier, if you aren’t a complete jerk and haven’t had a history of constant NSFs.
- I hear these A LOT: “The bank shouldn’t let me overdraft my account! They only let me overdraft my account so they can make money off of me! I got charged $35 for overdrawing my account for $1.05?!” Yeah, those crack me up. I know you’re upset. I know you don’t like being in the negative. But I know that you need to know the rules; we give you the rules and regulations of the account when we open it. Here are my responses to those complaints:
-The bank shouldn’t let me overdraft my account! I kind of agree with you there. Personally, I think people should know that they have the option to opt out of using overdraft. What? You didn’t know that? Yeah, we try not to advertise that mostly because yes, we make money off the fees, and that’s how I get paid! But on the other side of it, I think it helps consumers be more responsible/less whiny if they can select to not be able to overdraft. But I also say this: We cannot tell every time a person is about to go into the overdraft if they are willing to or not. There are times when people will go into overdraft and are willing to pay the fees due to emergencies. Like they really need gas or they really need cash for something, the times where they need the cash and are willing to pay for it rather than face some dire problem where it could get worse without the money. Some simply don’t want the embarrassment of having their card rejected. If we set it up that no one is allowed to overdraft their account all the time, not only will the bank lose income, but I can see people complaining to us that they really could use the money. I mean essentially, you are using credit that you didn’t have to apply for (although you do have to pass a background check and a “soft” hit on your credit history).
- They only let me overdraft my account so they can make money off of me! Well, duh! Yes, we make money off of it! But why not? You are essentially using money that’s not yours, like credit! You have to pay for the service! And I’m able to still get paid because of it. However, I want to point out that you can usually avoid the large, crazy NSF fees by setting up Overdraft Protection. This means linking your checking account to either a savings or credit card/line of credit. If you should overdraw your checking account, a set amount (usually $100 increments) is transferred from the savings/credit card/line of credit to cover the amount drawn and not put you in the negative. And the fee is usually a lot more reasonable ($10 per transfer at my bank). Of course, you need to make sure you have enough in your savings/credit card/line of credit to cover the drawn amount, but you shouldn’t be spending more than you have in checking anyway, right? 
- I got charged $35 for overdrawing my account for $1.05?! Yes. It may seem ridiculous, but again it’s money that isn’t yours to spend. Most of the times in these cases I’ll grant a fee refund, but if you yell at me for stuff like that, you are screwed. That’s why I suggested the $100 buffer to keep from getting into this problem. And most of the times I see this, they could have been avoided by not spending aimlessly at fast food joints and other such wasteful places. That’s why you should: BUDGET.
BUDGETING
- I recently got into working within a budget around May this year. This was in part thanks to Mint. This is a great free online money management application. I link all my bank accounts, credit cards, loans, and even my 401k to it. If you can access your accounts online, Mint can access them, pull your transactions, and show your financial activity in some very helpful, informative, and comprehensive ways. You can categorize your purchases, and therefore see how much you spend on say Food or Gas each month. There’s a budget tracker too, to show how much your spending in regards to how much you set aside for that particular budgeted item. I use it all the time and highly, highly recommend it. It has helped me keep track and pay down my debt and I’ve been able to cut a lot of costs down. I also just love the interface. You can read more about Mint from here.
Now all of these tips don’t apply to all banks, of course. Different banks have different rules, but these tips have helped me keep in the positive and then some. I’m only sharing what has worked for me. I’m not rich, but I do have enough to live contently for a while, stress free. You can too, if you exercise discipline, restraint, patience, and good manners. If you have any banking questions, don’t hesitate to ask.
