Highlights in this issue:

***   Save thousands of rands worth of banking fees with these 5 money saving tips...
***   Are you a swipe-a-holic…?
***   Investment Academy is on twitter – start following us today… and more…

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From the pen of Karin Iten

Dear Investment Academy Reader,

The number one gripe most of us have with our banks is transaction fees. It’s right up there with bad drivers, rush-hour traffic and lack of customer service. But unlike these three annoying issues, you CAN do something about reducing the ridiculous fees your bank charges you every month. Even better, these money saving tips don’t take much effort to implement and they can save you hundreds (if not thousands) of rand every year. This week, I’m investigating five ways to do just this.

Fee buster #1: Compare packages
To ensure you’re only paying as much as you need to, you have to shop around. But to do so, you first need identify your “user profile”. Monitor your monthly transactions to discover what type of transactions you usually perform. Are you an e-banker? An ATM bunny? Or a swipe-a-holic? The way you choose to manage your money has a huge affect on the type of account you should have.

Once you’ve worked out what you need from a bank account, start comparing rates across the banks. To do this, visit www.bankmonitor.co.za. Remember you want an account that’s as close to tailor-made as possible.

Fee buster #2: Never stand in a queue again
Electronic banking has changed the way we work with money. It’s great for those of us who don’t have the time (or the inclination) to spend our lunch hours or Saturday mornings in the bank. But did you know that the banks themselves are “subtly” encouraging us to go electronic by hitting us where it hurts most? Our pockets.

It’s cheaper for them, so it’s cheaper for you. To give you an example, a cheque deposit is about three times more expensive to do over the counter than an internet transfer is. The bonus, your transaction will take less time to clear (a maximum of three days) than a cheque.

Fee buster #3: Be smart
The first good habit you should adopt is to use your own bank’s ATM. When you withdraw cash via another bank’s ATM, you’re effectively using two banks to perform one transaction. That means you’re billed twice – once by your bank and once by the bank of the ATM you’re using. These days, Saswitch fees can set you back as much as R25 per transaction – that’s huge!

Also remember that it’s cheaper to do certain transactions remotely instead of going into the bank to get them done. If, for instance, you draw money over the counter, you’ll be charged around R16 plus 95c for every R100 you withdraw.

The same theory goes for statements. Instead of walking into the enquiry section of your nearest branch and paying a minimal fee (between R1 and R5 depending on where you bank), use the mini statement function at the ATM next time you withdraw cash. You’ve already paid for the transaction, so use this to your benefit. That said, if you’re already enjoying the perks of internet banking, why not pull statements for free the next time you make a payment?

Fee buster #4: Avoid costly penalty fees
The best way banks smack us with hefty costs is through penalty fees. The biggest tip: Make sure you have sufficient funds for the month. For every ATM or shop transaction that’s declined, you’ll be charged R2. For every debit order or cheque that’s returned as a result of insufficient funds, you’re whacked with a R100 penalty.

The same goes for overdrafts and credit cards. Ideally, you should try to settle your credit card on a monthly basis. If you can’t, ensure you repay the minimum amount by the due date. If you don’t, you’ll be whacked with late payment fees of up to R110. And NEVER exceed your credit limit if you can help it, doing so will mean you’re smacked with a “over the limit” charge of as much as R165.

Fee buster #5: Get the best Forex rate and save
If you, or your business, receive foreign bank cheques that need to be cashed in, think about your payment process again. Banks charge a small fortune to process these payments. But you can avoid this by arranging that the payment be transferred directly into your account using the bank’s “inward telegraphic transfer service”. These fees are significantly lower and you’ll receive a better exchange rate for doing so.

Till next week, here’s to your financial freedom and more money saving tips!

Karin Iten
For the Investment Academy

PS: Don’t forget to look for us on twitter to discover what’s got us talking here at the Investment Academy.

* This article was adapted from MoneyWeek feature.