I got an interesting comment yesterday to my “bitching” about the jump in service charge on the TD Safety Deposit Box, which got me thinking about another great trick the banks have devised, and that is the offering of “free” services if you carry a minimum balance in your bank account.
The comment almost seems from a TD employee (but that is only my guess), but the comment points out that if I was smart enough I’d just carrying the minimum balance ($5000) and then it would be:
“… saving all these fees which would be similar to making the money in an investment….”
To me that is a staggeringly interesting leap of faith. By pinning down $5000 a year in an account which has a rate of return of 0.10% annually (that is from the TD web site) this is a great investment, because I have saved $60?
I think the author of the comment is also mistaken, since it isn’t really listed on the web site that the Safety Deposit Box Fee is waived for the Infinity account (it is for the Plan60 account and there was another one listed, which I can’t remember). I stand to be corrected, and I will be going into the bank next week and asking if this fee can be waived for the year (never hurts to ask).
Even more interesting is that I am not actually complaining about the Fee for the Safety Deposit Box (I Safety Deposit Boxes are a good idea if you want to keep your stuff safe remember The Safety Deposit Box: Our Friend ), I was complaining about the price hike, which was astounding. Yes, the fees for losing a key and getting your box drilled are penalties, which are your own fault (much like overdraft fees), but jumping the cost by 42% is a pretty big jump.
So the question I leave you good reader is this: Is leaving a large minimum balance in an account to avoid banking fees, really like investing that money?
$5000 sounds like a lot of money in one spot. I do, however, keep the minimum deposit in three accounts spread over two banks. It totals $4000 and saves about $12.75 a month in fees. I need all three accounts and I look at the deposits as tier one of my emergency fund.