Beware of These Banking and Investment Fees
Bank and investment fees could cost Americans over $ 1.1 million over the course of their lives, according to a new report from NerdWallet .
The fees themselves — such as account maintenance fees, rations, and so on — cost an average of $ 369,000. But when you factor in the ROI losses on those fees, the figure rises to over $ 1 million . Meanwhile, NerdWallet found that the average American believes he spends just over $ 2,000 on commissions over the course of his life. This is a great mental disparity.
Fees on your 401 (k) investment are the main culprit, with mutual fund spending ratios and administration fees costing you the most, according to NerdWallet.
However, you don’t have to be on the losing side of $ 1 million. Here’s how to avoid them.
Bank payments
The report found that maintenance fees, ATM fees and overdraft fees cost Americans $ 18,000 over their lifetime, and these fees are largely avoidable.
As Lifehacker said , you should never pay any fees on a checking or savings account. There are many banks and credit unions that do not have minimum balance requirements or have low account balances. If you pay them and don’t want to transfer banks, you can call and ask them to opt out, or just switch to another type of account (perhaps one that does not pay interest). You can also look for an online bank, which generally charges much lower fees than a regular bank.
Overdraft Protection is an optional service that allows you to complete a transaction even if there is not enough money in your checking account to do so. If you don’t want to pay overdraft fees to use this service, turn it off and your transactions will simply be rejected when you exceed your balance.
Finally, if you use an ATM outside of your bank’s network, you may receive a commission from your bank and from the owner of the ATM you used. Use your bank’s ATMs or find a bank that reimburses third-party fees (many online banks do this).
401 (k) and IRA fees
You cannot completely opt out of 401 (k) fees, but you can minimize them. As we have discussed in detail , high commissions do not mean investment is better – in fact, there is no reason to pay for funds with an expense ratio of one percent or higher . Look for funds with a low spending ratio, anywhere from a quarter to half a percent.
The same goes for IRAs, but also note that you may have to pay additional fees, such as mutual fund sales, which are fees charged on some mutual funds, and mutual fund transaction fees charged by a broker. when buying or selling an attachment. To avoid this, use no-load funds and no-transaction mutual funds, according to NerdWallet.
Remember, it’s not hard to find low-cost or free funds that work better for you in the long run than many expensive funds. So do your research and save some money.