Have you ever post dated a check? Does the bank have any obligation to not cash the check until the date you write on the check? These and other banking practices may come as a surprise to you. I know some did for me. Sometimes it is we consumers who think that our rules are the bank’s rules, but such is not the case of a post dated check. The bank has no obligation to not cash the check until the date you wrote on it. Here are a few of the other gotchas that banks do:

Fees are the big money-maker

Your banker probably won’t tell you that fees are the biggest money-maker for banks. The interest earned on loans – and even on credit cards – pales in comparison to the fees that banks charge. In 2009, it was estimated that banks made more than $38 billion in overdraft fees alone, according to a study by Moebs Services. Add in other fees, such as the smaller fees charged at ATMs, for paper statements, and for not maintaining minimum balances, and that number is even bigger. The fees you pay are more valuable to banks than just about anything else that you do.

This is one I didn’t know and you should read carefully:

Your refusal to opt in for “overdraft protection” doesn’t apply to checks

Recently, rules regulating “standard overdraft practices” went into effect for checking accounts. Now, before banks can approve transactions that you do not have sufficient funds for, you have to opt in. If you choose not to opt in, your debit card transaction will be denied if you don’t have enough money in your account. However, what the bank may not tell you is that checks you write, and automatic bill payments you have scheduled are not included in the new rules. Banks can still approve checks and bills over the amount you have in your account – and charge you a fee for the overdraft.

That is an understatement. Even my bank has a warning on their web site mentioning the inaccuracy of their online figures and suggest you reconcile with you bank statement.

Your online account information may not be accurate

You might be interested in checking your online account information to find out where you stand. However, your information may not be up to date. Sometimes, there are inaccuracies in your online account information, or it doesn’t take account for the way that transactions are actually processed. While your online account can be a good guide, it is not always exactly accurate, and if you are cutting things close, you may find yourself in trouble if you rely on your online account information.

You should shop around for financial products and services

Many people just go to their bank for loans and other products. It seems easier and more convenient to keep their financial accounts at one institution. Additionally, many assume that, because they have been loyal customers, they will get a good deal. Unfortunately, this is not always the case. In fact, your bank may not have the best interest rate on a home equity loan, or your bank’s retirement plan may charge higher fees. While you want to include your bank in the search, it’s best to shop around for the best deal. Make sure your banker knows when you find a better deal elsewhere. Your bank should be competing for your business, not just assuming that they should have it.

Some of this information is just common sense. But the more you know about your bank, the better your relationship with them can be. I have always opted in using smaller banks. I am talking banks that are smaller than Bank of America, but larger than Fred’s Savings and Loan with one branch at Fred’s house. LOL

Comments welcome.

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