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What many of us don’t realize is that small amounts paid regularly to banks add up to tangible losses. Hidden fees such as interest on transfers or account maintenance and conversions can take a serious toll on personal finances. Despite the popular belief that these costs are inevitable, there are proven ways to minimize, if not eliminate, them. ACH transfers offered by many financial institutions, including Chase Bank, are one such method. They allow you to reduce or even avoid transfer fees, making them an attractive option for many customers. If Irina Tsymbaliuk, an expert at Rates, is to be believed, understanding how ACH transfers function and having the ability to track each financial transaction — similar to a track wire transfer — empowers you to manage your personal finances more efficiently and take control of associated rates.
For reference: According to research, the average person in the U.S. spends the following amounts on fees for money transfers:
Monthly account maintenance fee of $src3.95 per month.
For using ATMs that do not belong to the customer’s bank — $4.73.
For overdraft (exceeding the limit) — $35 for each transaction.
For transfers and international transactions — the amount depends on the financial institution and type of transaction.
Total: the average American household can spend an average of $500 to $600 a year on fees. Bank of America shares 8 common banking fees and tips for avoiding them. Shall we talk more about this?
Commissions under control: Smart ways for cheap transfers 3
Understanding Commissions
Understanding commissions is key to controlling them. Banks, like any commercial institution, are in the business of making a profit, and transfer fees are one source of revenue. Traditionally, the fee structure includes a transaction processing fee, a percentage of the transfer amount, and additional fees for urgency or currency conversion.
The business side of financial institutions is clear — they defend their policies by claiming that in addition to service fees, commissions are necessary to cover the costs of transaction processing and infrastructure maintenance. However, when comparing the terms and conditions of different financial institutions, you may find that some financial services providers offer more favorable terms. What is the secret? Comparing different forms of money transfer can help you decide the most favorable option, taking into account the commissions. Here are a few ways to transfer money and their features relevant to the US:
src) Bank transfer:
How it works: You send money from your bank account to another one, or the recipient receives money into your bank account.
Fees: Banks may charge fees for domestic and international wire transfers. Check with your bank for details.
Advantages: Reliable and direct method of transfer.
Disadvantages: Usually higher fees.
2) International money transfer services:
Examples: Wise (formerly TransferWise), Western Union, MoneyGram, and others.
How it works: You send money through a specialized service that provides a fast and inexpensive transfer.
Commissions: Services may offer lower commissions and better exchange rates.
Advantages: Transparent rates, fast transfers and good exchange rates.
Disadvantages: Some services may have limits on transfer amounts.
3) Online transfer providers:
Examples: PayPal, Venmo, Chase Pay and others.
How it works: You send money through an online platform linked to your bank account or card.
Fees: Varies depending on the provider.
Benefits: Convenience, fast transfers between platform users. Bank transfers can be tracked.
Disadvantages: Some providers may have country restrictions.
For detailed information on fees and restrictions for transfers both within and outside your chosen platform, contact your bank’s support team.
Strategies to reduce fees: A guide to cost-effective solutions
In the world of financial transactions, reducing fees is akin to finding a shortcut in New York City’s rush-hour maze. But modern technology is responding to this challenge by offering effective ways to reduce costs, from utilizing online services and partner banks to integrating with non-bank payment systems and cryptocurrency exchanges. As a side note, many online financial services offer transfers with minimal or no fees. Despite skepticism about some methods, the practice of the cumulative effect shows that even small savings translate into significant financial gains in the long run. Below are strategies to help you reduce your banking costs:
Comparing terms and conditions of different banks and financial institutions to find the most favorable offers.
Utilizing online banking services that offer lower fees than traditional financial institutions, and some even provide fee-free services.
Automating payments can help you avoid penalties and additional late fees.
Consolidating accounts and services at the same monetary institution can result in lower overall rates.
Negotiate with the financial services provider to reduce or eliminate fees, especially if you are a longtime customer or have a good credit history.
Using non-bank payment systems: Electronic payments and payment services offer quite favorable terms compared to traditional banks.
Investing in cryptocurrencies that offer transactions with low or no fees; here, however, you should consider the risks associated with the volatility of cryptocurrencies (market fluctuations, low liquidity, dependence on news).
Personal budget can help identify and eliminate unnecessary banking expenses.
It’s important to emphasize: for each person, the financial approach should be individualized. Each of us has unique financial needs depending on our circumstances, life priorities and long-term plans. So choose the strategies that best fit your personal goals: emergency fund, retirement planning, debt repayment, investments, or philanthropy.
Tools & Resources
Digital technologies provide banking customers with powerful tools to manage their finances: track fees in real time, compare the terms and conditions of different banks and payment systems, set financial goals and track progress towards them. This makes it possible to choose the most profitable option for monetary transactions, minimizing costs. Such digital resources have long established themselves as reliable helpers in achieving financial efficiency and savings. Taking Chase Bank as an example, Rates outlines step-by-step how it works. The main point:
Having selected the bank, choose the type of account: current or savings one.
Open a bank account, if it’s an online provider — via the internet.
Familiarize yourself with the payment systems with which your chosen online bank cooperates and terms of service.
Get a bank card.
Download the bank’s mobile application — make financial transactions and track each transaction, saving up to 50%.
End
Being informed about fees and knowing the available ways to reduce them is your answer to hidden bank rates. To reduce these fees, use mobile apps and online calculators to track bank fees. Today’s fintech solutions not only allow you to track bank transfers and current fees, but also predict future charges so you can effectively manage your personal finances. Your steps are: choosing a bank, account type and bank card. And the mobile app of your chosen financial services provider keeps you up to date with your financial events.