What Steps To Take When You Start A New Debit Account

Author: Edeh Kelechi

Debit accounts allow you to access your money whenever you need it. Unlike a credit account, you have to deposit money into your debit account to be able to withdraw and pay for goods and services. It also comes with a debit card. If you just opened a debit account, it may be challenging to understand the process.

This article provides advice on making the most of your new debit account, especially if it is your first time owning one.

Steps to Take When You Start a New Debit Account

One thing you’ll want to do is to keep bank charges to a minimum. Even though most banks promise low fees, they can quickly add up. 

Here are some steps to reduce these fees:

• Opt out of Overdraft Protection

Until 2010, when you opened a debit account, your bank would automatically offer overdraft protection. If you used your debit card or a check to pay for goods and services and the funds in your account were insufficient to cover the payment, your bank will cover the remaining balance.

Overdraft fees are costly, so you want to avoid them. At the top banks in the United States, the average overdraft fee that resulted in a negative account balance was around $35.

If you choose not to use overdraft protection, your card will be declined if the money in your account is insufficient for your transaction. As a result, you will save approximately $35 in fees. If you tend to overspend, opt out of your bank’s overdraft protection to minimize your charges.

• Maintain a Minimum Balance

Because your debit account is your workhouse, you must keep money in it. Maintaining a minimum balance is an excellent way to reduce your monthly maintenance fees. That may be difficult because most people are concerned about running out of money, but it may help reduce your monthly fees.

• Minimize Wire Transfers

While wire transfers are a fast way to send money without using physical cash, their fees are typically high. Banks generally charge between $15 and $30 for domestic and international wire transfers. You can save money by stopping wire transfers unless you must use them. Instead, using the bank’s mobile application is a sure way to minimize transfer charges. 

• Use Direct Deposit

If you cannot maintain a minimum balance or your monthly balance is unpredictable, you can avoid the monthly maintenance fee by using a direct deposit. Your regular monthly payments, such as social security or a paycheck, are automatically deposited into your debit account. Each bank has different qualifying factors, but they should offer a direct deposit waiver, so check with your bank.

Conclusion

A debit account is ideal if you need to access your money for daily expenses. However, monthly fees can quickly add up since you use the account frequently. To maintain a good debit account, use direct deposit and keep a minimum balance to avoid unwanted charges. Furthermore, it is recommended to opt out of your bank’s overdraft protection to keep your charges low.