Over the last decade, ‘nickel-and-dime’ fees have become the normal course of business at many of the largest banking institutions.  Some of the tricks that these banks use to squeeze more fees out of account holders have angered law makers and consumers alike, but this has not stopped the banks from instituting more fees that do little more than line the pockets of the bank’s shareholders.  Here are some of the most devious tricks the largest banking institutions use to remove money from your accounts to be placed into their own.

Checking Accounts

• Authorization Holds – Authorization holds are holds on the funds in your checking account to pay for debit card purchases that have not yet cleared, but the problems occur when the holds are for more than the person has actually spent.  Because these funds are being ‘held’ by the bank, they are not removed from the account balance, but if the person spends more than what available after the funds being held are deducted, then they may be hit with overdraft fees even though they have not spent the full amount in their checking account.

• Transaction Reordering – Transaction reordering occurs when banks process transactions from highest to lowest instead of in the chronological order that the transactions were actually made.  This increases the chances of lots of little overdrafts, for which the person is fined $35 per occurrence, instead of one large overdraft.

• Zero Balance Fees – Zero balance fees are charged on accounts that have been overdrafted, emptied by the consumer, or emptied by the bank for fee charges.  This fee is charged for everyday that the account balance is zero or negative, causing people that depend on a biweekly paycheck to incur many fees before their next paycheck is deposited.

• Exit Fee – This is a fee that is charged for closing your account.  If you are tired of the fees that your bank is charging and decide to move your money to another banking institution, you cannot simply remove your money or the bank will begin charging you a zero balance fee.  You must close the account entirely.  There is no reason for an exit fee other than to penalize consumers for moving their money elsewhere.

With the economic crisis not going to abate any time soon, and all of us working on paying down our debt, saving more and cutting back on spending, a growing number of banks are wisely implementing new credit card services built for customers to help pay down, avoid interest fees and better manage their personal finances.

There are a wide range of services, and it would be good for you to check if your bank has implemented one for their customers as part of their service package to you.

What most of these will usually entail, is some way to put a automatic payment plan in place for the credit cards of choice for you, where you can have them paid off on a monthly basis in a way that will keep you from incurring interest fees; an important step toward managing your personal finances. Here’s one from JP Chase Morgan called Chase Blueprints you can look at if you do business with them, or as an example of what a plan like this would look like in general.

With the types of busy lives we live, and listening to a lot of people complain about interest fees and other late fees related to their banking, getting into these types of financial management services are a great way to take the onus off of your memory and busy life you live. Why get socked with late fees and interest fees when you can sign up for programs like this and take all the pressure off yourself and just leave it in the hands of those running the program?

If your bank doesn’t have this type of service yet, ask them if there are plans in the works for one, and if so, how long will it take to get it going. If your bank doens’t have one, and has no plans to put one in place, it could be well worth you time and energy to look for a bank that does offer this type of service.

There is just too much money to safe and peace of mind that comes with a program of this type to ignore it and go on doing business as usual. Now that banks are offering this opportunity, why pass on it and continue to pay far more money than you need to for your various accounts?

At first view, the HSBC Direct Online Savings site is both attractive and functional.  As you begin to look at what HSBC has to offer it becomes even more attractive on a savings front. 

HSBC offers one of the best rates for interest in any of the current online savings through September 15, 2008 of 3.5% as compared to ING at 3.0% and then it become variable. 

When opening account it allows three choices – savings, payment, or CD account.  The site is very open regarding personal information and the fact they will need many forms of identification to ensure a customer’s privacy and security.  They also inform first time customers this will apply to businesses as well as individuals.

When you open an account, it currently lists six steps needed in order to open an account.  Reading other reviews from people who have accounts say this is the longest application process out of all of the online banking systems taking approximately two weeks to take care of all the paperwork.  The application must be completed within thirty days or the process begins again.

On the plus side there is no minimum balance or monthly maintenance fees and interest is accrued monthly.  It also only takes one dollar to open the account.  However, a customer cannot close an account within six months or a fee will be incurred.  However, charges for NSF fees, chargebacks, and stop payments are significantly less than my current brick-and-mortar bank.

Once a customer has signed up at HSBC Direct, the account which is funding HSBC will receive two trial deposits under one dollar.  These will need to be confirmed on the HSBC Direct Account.   Please be careful when doing this.  A customer will only have three chances to correctly enter the deposit amounts and then if not done correctly, your HSBC Direct account will need to be funded by a snail mail check. 

With an HSBC account, a customer can set up a recurring transfer from the account funded from and the amount you want to transfer and how often – from every week to quarterly.  There is no fee to set this up. 

Help is easy to come by either via the Internet or by phone, both in the U.S. and outside the U.S.

Security issues are always suspect when someone is dealing with their money online.  However, HSBC does a good job of using Firewalls to block virus and worms from their sites and has SSL encryption to keep you safe.  Because they use 128-bit encryption, access to a browser which can do that is necessary or upgrade so this is possible. 

HSBC has a new Security Key which is required for their Personal Internet Banking Bill Pay Service.  This helps to keep the password from being hacked by keylogging software.  This type of software used by hackers actually monitors keystrokes to get password information. 

However, if it takes too many log-in attempts to log on, HSBC will immediate disable online access and the only way to re-establish it is to contact them.  They will then send a password via snail mail.  However, with an ATM card associated with this account, the password can be changed electronically.

This may seem excessive to some people but to me, I want more security to keep the money I make from winding up in someone else’s hands. 

Withdrawing money is simple.  It can be done via ATM (if the customer has opted for a card), transferred to any linked account, or by snail mail check.

An added plus to the ATM card is though there are no charges to use the ATM card through a HSBC ATM, there will be fees if money comes from a non-HSBC ATM.  However, HSBC will fully reimburse the customer for up to three U.S. non-HSBC ATM charges per month which will post on the first business day of the following calendar month.

All-in-all, HSBC has many good things to offer a customer who is looking for online savings – good rates, easy transfer capabilities to linked-in accounts, and security.  Good reasons to bank with anyone I believe.