One of the things that you will come to discover quite quickly about banking is that it tends to generate a lot of fees. Fees are a natural part of banking because bankers, just like any other type of businessmen, are looking to make money. If you leave your money in one of their bank accounts and there are no fees associated with it then it means they make a lot less money and the end result is that they don’t get to be the wealthy banker archetype we hear so much about all the time in the news. The fact of the matter is that banks are the epitome of a capitalist society and in that capitalist society bankers are always going to be looking for more ways to make more money from their customers; it is just a simple fact of life. Here are some of the different ways in which banks are able to levy fees on their customers and make that extra amount of money.
There are a number of different kinds of fees associated with bank accounts. Fees come in all different places and you might be surprised if you take a very close look at your account contract the different types of things that a bank will bill you for. Listed below are some of the more common types of fees.
Service Charge: This is the most common type of fee and indeed every single conventional bank in the world will have accounts with this type of fee. A service charge is simply a monthly amount taken from the bank account that you have with the bank in order to pay for your account services. It is usually anywhere from $1 to $5 depending on the bank and the bank account but the monthly withdrawal will usually be at the end of the month for the month that has just passed. These types of service charges are used by the bank to maintain facilities, pay staff, administer your account and provide things like ATM services.
Conditional Service Charge: This is exactly like the previous service charge except it will only kick in during a very specific time period. In other words, one or more conditions have to be fulfilled for the service charge to be taken out of your account. Student accounts offered by most banks are good examples of conditional service charges because in most of those account schemes usually the student will not pay a service charge if they maintain a balance in excess of a certain amount (usually around $1000-$1,500).
No Fee Accounts
There are many different accounts that the conditional service charge applies to and many more that the conventional service charge applies to. There are some accounts however that have no service charges whatsoever. ING Direct is a very good example of this and many people reading this article might be wondering how they are capable of it. Well, ING Direct has no branches whatsoever and very few ATMs around the world. Most of their business is conducted either online or through the phone. They don’t have to hire as much staff as everyone else and they don’t have to pay to maintain physical branches. This allows them to save a very large amount of money which they in turn pass across to their customers in the form of higher interest rates and no service charges.