The Fading Dream of Free Banking Products

A lot of people are talking about the fall of free banking products in the personal finance sphere online, and we felt compelled to shed a different perspective on the subject. We’re big fans of banking, after all, and maybe some would say that it makes us biased.

Business cannot run at a profit unless someone — or multiple someones — is handling the expenses. In order to provide you services, the bank has to charge you. The bank has to find ways to make money, and with changing regulations this is going to be a little harder than it was in the past. With fewer people taking out credit products, the difficulty is increased even more. Is this something that we’re saying is a bad thing per se? Not if you’re a consumer. If you want to make sure that you’re saving more and getting more, then yes, you’re going to want to look for the bank that’s got those interests at heart. Yet it’s not always about the fees — you have to go beyond the fees to see what you really have at a bank.

The rise in fees could lead to even more services because now there’s actually more revenue coming in. Your bank does more than just provide a spot for your money — they are keeping your money completely safe. Even though bank robberies do happen, there’s a lot more security around the bank than there is around your house. This means that your valuables can be kept safely at a bank, and if you have assets this is exactly where they should go. In order to provide those services to you, there has to be a fee paid. For some people, the fall of free banking products is a shock because they’ve been under the assumption that they’ve been getting free services all this time, and that’s really not the case at all. You have to realize that it’s a matter of perhaps not seeing the fees around you. For example — if you have a savings account, you’re going to be getting less of a yield than you might get elsewhere because the bank will take some of that yield for itself. In other words — free banking never really existed in the first place.

If you really want to continue cashing your tail so to speak, then there are a lot of banks to choose from. But you’re not going to find a bank that has zero fees on everything. It’s important to get the fee disclosure to see what they’re charging, and how you can work those fees into your financial blueprint. For example, if you’ve got a bank that charges you for your checking account but you also have a higher savings account rate than other banks, it might be worth it to stay with that bank. Some people don’t think about it like that, but that’s the way that you’re going to need to start thinking about your financial print, really.

It’s very trendy right now is pull your money out of the bank, but what about when you need to get a money order? What about when you have a major purchase and certified bank funds are a must? What about when you need a loan?

Developing a relationship with a bank that you can turn to for all of these services is going to be absolutely essential. You don’t want to find that you’ve worked so hard to reach your goals, but because you struggled with making relationships with the right financial types, you didn’t get to reach your goals after all.

The idea that you can live without credit forever is something that just doesn’t work. Whether you agree with it or not, we live in a credit culture, and that’s not going to go away anytime soon.

We’re not saying that banks never offer free services, but there is always a cost to everything in the business world. Keeping your eyes open isn’t being critical — it’s just being a savvy customer. What will you choose to be today?