Withdrawal fees – what you need to know
August 6, 2020
Different types of bank accounts serve different needs. Depending on your goals, it’s wise to put money into the best account and use the right tools for spending and saving.
Doing so allows you to maximize the return from your bank, minimize fees, and manage your money conveniently. But while it may seem convenient to own a bank account, understanding the fees and charges associated with it is far more crucial.
With the government providing a requirement of opening a bank account in order to access most services and obtain any financial assistance, most consumers are unaware of the fees and charges associated with maintaining these personal accounts. Knowing the different types of personal accounts available.
Most banks offer the following types of personal accounts: Savings Savings accounts are typically the first official bank account anybody opens. Children may open an account with a parent to begin a pattern of saving. Teenagers open accounts to stash cash earned from a first job or household chores. Savings accounts are an excellent place to park emergency cash.
Opening a savings account also marks the beginning of your relationship with a financial institution. For example, when joining a credit union, your “share” or savings account establishes your membership. Checking Checking accounts provide you with a basic account to deposit money, make withdrawals, and pay bills. Paper checks, though slowly losing popularity, are key features of checking accounts.
More recently, the debit card has taken over as a primary form of payment from checking accounts. Most banks now offer online bill-pay services through checking accounts, helping to streamline payments. Fixed Deposit Accounts A fixed deposit account usually allows you to earn more money by committing to keep your money in the bank for a certain amount of time. Consumers earn more from the interest gained in the time it was deposited.
Retirement Accounts Retirement accounts offer tax advantages and are exempt from fees and charges. In very general terms, you get to avoid paying income tax on interest you earn from a savings account or fixed deposit each year. Withdrawing from personal accounts With the vast range of personal accounts to choose from, consumers are still confused and are unable to make informed decisions due to non-disclosure of vital information about each account and the fine difference that separates each account. Many consumers are usually of the assumption that fees and charges for one account may be the same for another.
This is incorrect and could lead to consumers losing more money than intended with consistent withdrawals. The following table serves to help provide consumers with a clearer picture of the withdrawal fees associated with the two common personal accounts – savings and checkings.
• With the government removing all EFTPOS charges, it is important that consumers maximise on using their locally issued debit cards for payments as opposed to making paper & ATM withdrawals as it is free. Making withdrawals from ATM machines incurs a cost.
• Consumers are reminded that the use of VISA debit cards for making payments may incur costs as the payments is settled by the schemes (VISA international & Mastercard). The charges may differ for respective banks and consumers are urged to check the associated fees with the banks. It is imperative therefore that local debit cards are used for local transactions to avoid unnecessary fees.
• Pick the right checking or savings accounts and understand the fees associated with maintaining it. This helps you identify anomalies in your account statements and prompts you to act swiftly by referring the issue to your bank.
Consumers seeking financial advice are encouraged to contact the Council on our National Consumer Helpline Toll Free Number 155 or send an email to email@example.com