You know how banks tell you that they have your best financial interests at
heart and how they try to convince you to open accounts with them enticing
offers and promises can be tempting but not all that glitters is gold especially
as banks are concerned there are several means through which banks earn money and
many of them are a result of taking yours which is why in this video i will
share with you seven ways your bank is ripping you off and if you're new to the
channel then hit the subscribe button below for more life changing content
number one savings account rates there are two popular ways by which you can
operate a savings account you could have a traditional savings account or as a
modern day permits and online savings account regardless of the type of
savings account you operate the interest rates are absolutely nothing to write
home about over the years savings account rates have nosedived drastically
and keeping your money in these accounts will never amount to anything tangible
going by the fdic's reports all you can get in terms of rates via an average us
savings account is about 0.06 percent shocked i know i was when i
read the statistic but let me explain further if for instance you have a
savings account with ten thousand dollars in savings all you would earn in
interest for a full year is a measly six dollars
yes just six dollars how awful is that considering all the
trouble you went through to open the account with the bank you would think
they would at least offer interest that would somewhat fight inflation now you
may be scratching your head wondering why the rates on your savings account
are so low well you can blame the federal reserve's
monetary policy this policy aims at reducing interest rates for the purpose
of stimulating growth but you the customer can take part of the blame as
well i say this because banks are so used to having so many deposits from
their customers that they are nonchalant about offering higher rates
why should they when customers keep making endless deposits without
demanding higher rates like i mentioned earlier the 0.06 interest rate is what
most average banks offer however there are top tier banks that offer as much as
10 times that value in interest if the customers have the mindset that they
deserve more they would logically open accounts with such banks and have their
deposits flow in that direction this singular action would force these
average banks to offer better interest rates since they don't want to lose all
their customers to the banks that offer the more mouth-watering interest rates
on savings accounts sadly many customers are not aware of
the opportunities that top-tier banks offer in terms of rates and therefore
make no attempt to investigate and go for the best options
number two cd rollovers i'm sure you're aware of
what a cd is but if you don't i'll tell you a cd is a certificate of deposit
which is a type of federally insured savings account with a cd account you
are given a fixed interest rate as well as a fixed date of withdrawal this date
is called the maturity date a lot of customers simply allow their cds to roll
over automatically at the same bank here's the question if the bank knows
full and well that the cd is going to roll over passively what makes you think
they will make the effort to give you a better rate with different banks there
are special offers on cds this means you stand a chance of getting a better offer
when your cd is about to mature one good feature of a cd is this if you make the
move and scope for the best rates and find one then you can lock that rate in
for the duration of the cd missing out on the best city rate isn't going to be
all you lose if you allow your cd to roll over passively you would also be
missing out on the chance to reevaluate the length of their cd terms there are
two determinants of the right term one is your interest rate conditions while
the other is your current financial situation both these determinants would
have changed since the last time you chose the cd
number three mortgage refinancing if you're already in business with your
bank they will be less willing to offer you preferential rates when you decide
to do more business with them now logically you would include your bank in
any comparisons you make concerning refinancing your mortgage if they
already hold your loan it means they have already approved of you as a credit
risk and would be more likely to approve you for refinancing keep in mind
mortgage rates among lenders can vary at the same time the risk assessments they
perform are also subjective this means that there are still banks out there
that may feel comfortable with you and proceed to offer you lower rates on your
mortgage it is common to see individuals allow the convenience of being
refinanced by the same bank stick to paying more mortgage interest to them
hence facilitating the rip off number four checking account fees in the past
free checking account transactions were very common but in most circumstances
this is no longer the case that is unless you are motivated to eliminate
these annoying monthly fees there exists thousands of different options for
day-to-day bank accounts yet people continue to subject themselves to these
charges when they can be as high as 150 annually think of how much you would
have saved if you could have avoided these high fees since you began banking
most traditional checking accounts carry these fees however online checking could
be the more favorable option which is what i recommend if you want to stop
getting ripped off number five overdraft protection protection is always a good
thing isn't it i mean who wouldn't want to sleep well at night knowing their
interests are being looked after this is great until you consider how much
overdraft protection would cost you when you do and realize how high these costs
can be you may not feel as good about the situation typically overdraft fees
can surpass 30 dollars per occurrence and this is too much if you ask me
what's worse is that you may have made several transactions before you realize
that you have overdrafted your account this would mean you would have paid the
30 charge multiple times going by law every bank small or big are mandated to
exclude customers from overdraft protection unless they consciously
consent to it sadly banks intentionally encourage customers to go for overdraft
protection when they open accounts it's hard for a novice to look at overdraft
protection as a bad thing since the word protection is very enticing but it's
less heartbreaking to have a transaction declined rather than piling up several
thirty dollar overdraft charges number six credit card rates remember
how i mentioned that interest rates on savings accounts have taken a nosedive
over the years well the credit card companies did not follow suit as the
average rate paid on credit cards today are pretty much the same as they were
eight years ago what this implies is this relative to other interest rates
credit card rates have automatically become a very expensive form of debt
what makes it worse is if you have a less than perfect credit history keep in
mind that when you search and apply for a credit card you will be acquainted
with only their very best rates this does not mean you will get those rates
unless of course you have an outstanding credit history a quick piece of advice
before you apply for a credit card is to be sure to find out what rate you are
being offered according to your credit history the good news is that all credit
card issuers are not the same some offer better rates than others so go for the
most favorable option in america there are more than 6 000 fdic insured banks
so you have so many options to browse through the choices you make could be
the difference between saving some extra bucks for yourself or unnecessarily
adding a few more dollars to the bank's wallet number seven atm card maintenance
charges having a bank issued atm card or debit card helps you get cash in hand
when you are of need of it there are atms in almost every corner but with
this convenience comes a cost some of which are ridiculously high most banks
will charge you a fee for a debit card replacement even before it is expired
the bank of america for instance charges as much as five dollars to replace the
debit card but it doesn't stop there customers are charged an extra fifteen
dollars if they opt for express delivery another example is pnc they charge their
customers up to seven dollars and fifty cents for atm card replacements and 25
dollars for expedited shipping there's really not much you can do if you lose
your atm card other than getting another one the good news if you want to call it
that is that you can avoid the shipping fee if you have a backup debit card in
hand besides atm card replacement charges there are other fees associated
with using your atm card bank fees can range from 250 to 5 on a single
transaction these charges are determined by varying factors it could depend on
whether the atm card you're using is out of the network or whether you are using
an international card the worst part is when you use an automatic teller machine
that isn't operated by the card issuer you will be charged even higher fees it
doesn't matter if you're making a withdrawal deposit or even a simple bank
inquiry annoyingly sometimes these fees are not charged by solely the bank that
operates the atm you use even your bank may charge you for it another aspect you
should consider to be a rip off is sms alert fees these are fees that are
usually charged monthly for transaction notifications made with your atm card
these include debit alerts credit alerts monthly bank statements system upgrade
notifications and even a happy birthday sms which you didn't even ask for sms
alert fees are charged based on the number of notifications via sms that you
receive on your mobile phone it gets worse with international transactions
cash withdrawals usually have a flop fee of two dollars and it can be as high as
seven dollars with a conversion rate that is calculated as a percentage of
the amount of money you withdraw this is usually around three percent yes i know
these charges can be annoying especially for one who uses their atm card
regularly there are a few things you can do to reduce your expenses you incur on
your card these tactics will of course require you to plan ahead and reconsider
your atm usage here's what you can do install your bank's mobile app on your
phone and use it to search for free atms around you select the cashback option
when you make purchases at grocery stores or from other merchants and you
should develop a habit of reducing the number of times you use the atm but
withdrawal larger amounts always remember you have a chance of using free
atms if you're aware of where your card issuer operates their atms and branches
also find local stores that offer a cashback option it's also true that
withdrawing large amounts of cash which you don't need at the moment can put you
at risk of losing it so you may want to avoid doing this all together so there
you have it seven ways your bank is ripping you off and how you can make the
most out of your banking experience hey it looks like youtube thinks this next
video is the one that will change your financial life forever give it a watch
and let's see if they're right