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Bankroll with the Punches

Five ways to stop the bank from breaking you

1. Account Holds: Patience is a Virtue

We use banks to safely store our money and give us interest on our investment. Using a bank is easy and convenient: when we need our money we can get it. However, there are times when banks will hold onto our funds and not allow an immediate withdrawal. This is called a hold, and there are several reasons why you might see it on your account.

These holds usually last a few days, but it may take up to two weeks for a check to go through the proper clearinghouses (and for the funds to actually transfer to your account). But what happens if you need cash now — I mean, it’s your money, right? The solution may be simpler than you think! Just call your bank and ask — the money may have already cleared and the bank may just need to update your account. But beware: if you spend the cash and the held money never shows up, you’re still on the hook (and liable for any fees that may go along with it).

2. Banking Fees: When You Want to Save Money, You Have to Spend Money

Fees are nearly inevitable when using a bank — it’s how they stay in business. However, the more you know about these fees, the better off your bank account will be.

The most common fee banks charge is for maintenance. This is the set amount banks charge you for keeping your account with them. There are conditions that will allow you to avoid some of these charges: for example, your checking account maintenance fee may be waived if you set up direct deposit for your paycheck, or if you keep a specified minimum balance. Many banks offer “student accounts” that waive monthly maintenance fees, so be a smart consumer and ask!

3. Stopping a Payment: You Only Lose Once

Have you ever made a big purchase, then realized later that you didn’t have the money for it? I can assure you it’s a terrible feeling, second only to discovering your dog ate a long string of dental floss: you don’t know how bad it’s going to be yet, but it’s definitely going to get worse.

Fortunately, there is a way to avoid massive overage charges: by requesting that your bank or financial institution not honor the transaction. This is called a stop payment. It’s best known for stopping checks, but can also be used to stop credit card and debit card purchases, and even automatic debits from your bank account. This can be very convenient, but also should be done very rarely. Why? A stop payment fee is going to cost you.

4. ATM Fees: Rise of the Machines

You should also be smart with ATMs, because with the convenience comes a price. Nearly all ATMs charge a fee (around $2 or $3) if you’re not accessing an account associated with their bank… and your bank may also charge a fee for using an out-of-network ATM (again, around $2 or $3). Those fees can add up quickly! For example, say you take $20 from an ATM five times a month. Multiply that $5 or $6 fee by five, and you could pay $20-$30 in fees — just to access $100 of your own money!

So how do you keep ATM fees down? Start by using ATMs that are associated with your bank. Most banks have a feature on their website showing where you can find nearby ATMs where you won’t be charged for withdrawing money. And when you have no choice and must use an out-of-network ATM, make it count: take out a larger amount of money at one time, rather than smaller amounts several times. Most ATM fees are flat (not based on a percentage). In the earlier example, you’d pay $20-$30 in fees to take out $100. By taking the $100 at one time, you only have to pay $5 or $6. Those savings add up!

5. Reconciliation: Keep Those Receipts!

Look, I know all this stuff is far from exciting; after all, it’s personal finance and my humor is almost as dry as a squeegee in the Sahara. All I can do is hope you can forgive me and we can reconcile.

See what I did there? That was a seamless introduction to reconciliation, a crucial part of financial fitness. Reconciling occurs when you compare your banking accounts to your check copies, receipts, and credit card statements. This allows you to keep track of your spending, make sure that all your past purchases and deposits have been accounted for, and catch any potential fraud or identity theft before it’s too late.