How I Negotiated my Bank Fees Down to Zero Dollars

The path to Financial Independence (FI) at its core is all about cutting the fat out of your budget and increasing your savings rate as much as possible. One of the first things that people in the FI point to first is your recurring monthly expenses such as your cable bill. Before you go and cancel your Netflix account, I would like to draw your attention to another monthly expense that is costing you more than you think and providing absolutely no value to your life: Bank Fees.

Most people don’t really stop to think about how much they pay in bank fees, and if they do it’s with a sigh and shrug of the shoulder as if to say “there’s nothing I can really do about it, so best not to think about it”. That’s how we’ve to the point where the average Canadian spends $185 per year on banking fees while the average American spends $290 per year, according to the New York Post.

“Then I heard the magic words: let me talk to my manager and see what I can do”

Many banks distract their customers from the outrageous fees they charge by advertising that they will “waive their bank fees” if you keep a minimum balance in your account. Which is another way of saying “if you give us an interest-free loan, and not use that money to invest in assets that will build your personal wealth, we will be willing to waive our fees”. If that sounds like a good offer to you, also consider the fact that the “minimum balance” required to wave the fees is increasing by as much as $500 per year. It could be worse, and it is as I found out recently my bank eliminated the minimum balance all together giving me no option but to pay the fees.

This was the final straw that drove me to take action and set an appointment to go in and speak with my bank (something I hate doing). Below are some tips I used to bring my banking fees down from about $100 per year to $0.

Use Your Leverage

Almost everyone you speak with at most banks is at least in part, a salesperson. You will do well to remember that the salary of the person you are speaking with is tied in part to how many accounts and other financial products they can sell you. I know this because I used to work in a bank. I also know that a measly chequing account is worth next to nothing compared to a bigger game such as mortgages and investment accounts.

If you have a mortgage at the same bank you hold your chequing account, start by putting that on the table. When I recently sat down with my bank the first thing I brought up, after I complained about the fees on my chequing account, was the fact that my mortgage was coming up for renewal and that I would have no hesitation to move it to another bank if I didn’t feel my current bank was taking proper care of me.

Then I heard the magic words “let me talk to my manager and see what I can do”. 5 minutes later the financial service rep was back in front of me with “Good news”, she went on to tell me that since I have been such a loyal customer they were willing to waive my monthly bank fees.

If at First, You Don’t Succeed…

The lesson I hope you take away from my experience is that the people who work at the bank have more power to make changes then they would like you to think. That doesn’t mean every single one of them will give in to your demands. Some of them will be hardline about the issue and not be willing to waive the fees, even if you threaten to move all your accounts to another bank.

If you don’t succeed on your first attempt, don’t be afraid to repeat this process at another branch location or even through the bank’s telephone banking services. If you are persistent, you are likely to eventually succeed.

If it turns out that no one at your current bank is willing to waive your fees…

Be Willing To Follow Through

It is a major headache to move all of your accounts to another bank, you have to cancel and your pre-authorized payments back up and sit down with your payroll department to set up a new direct deposit form for your pay cheque, not to mention the paperwork involved in closing down your current accounts and opening up new ones. This is why most people don’t actually go through with it, which is exactly what your current bank is counting on.

Be willing to shop around and find a bank that will waive your banking fees in exchange for bringing over all of your accounts to them. Put simply, pit the banks against each other for your benefit.

Don’t Use the ATM in the Bathroom of the Bar

Even if you are successful at bringing your monthly banking fees down to zero, there are a few other things you’ll need to watch out for:

• 3rd Party ATM’s charge a fee to withdraw money, and since the fee is not charged by your bank they are unlikely to ever reimburse you for that so avoid these ATM’s if at all possible.
• If you are living pay cheque to pay cheque, watch out for the “overdraft” fees that you may be charged and be willing to negotiate them down if you can.
• Check if your bank charges you an “E-Transfer” fee for sending money via email and be willing to negotiate these fees down too.

Have you ever tried to negotiate the fees with your bank how did it go? Do you know how much you are paying for in bank fees? Let me know in the comments below.

This article is for informational purposes only not all information will be accurate. This should not be considered Financial or Legal Advice. Consult a financial professional before making any major financial decisions.