But that involves writing a check. That kind of misses the whole point of my post. I was replying to someone saying that renters must need to write a check to their landlords. In the US, this is often the case, because as you note, ACH is free. However, simple wire/bank transfers are much more common in Europe since they are pretty much free or incur only a small charge.
Unless you mean to say that there is someway for an individual to initiate an ACH transaction, sending money to another individual without using a check, then I wasn’t aware of that. Even initiating the transaction through online banking often results in a check being mailed to the person’s address. Of course, other online services are making the whole thing moot. My tenant in Florida pays me via Zelle, and I think I’ve exchanged money with PayPall and Facebook more times in my life than all the checks I’ve ever written combined.
Bank of America waives the fee with only a $250 deposit each month, and no minimum balance. I can’t imagine a person who earns less than $250 per month and also requires a checking account. What purpose does the account serve?
As far as I know, you can’t initiate an ACH transaction to an individual, but not everyone is paying rent to an individual. Lots of property management companies have a website for online payments. A guy renting the second floor apartment to you when he occupies the first floor apartment is not likely to either set up online payment or hire a property manager, so you’ll probably have to write him a check.
I checked BOA, and the page I got said
Lots of small employers don’t do direct deposit* - it may cost more than it’s worth if there are only five or ten employees and the boss has been doing the payroll by hand or if only one or two employees want direct deposit. Someone could deposit $5000 worth of paper checks per month and wouldn’t qualify to have the fee waived.
I have no idea why banks specify direct deposit- I know there’s a certain amount of resistance to switching banks after your direct deposit is set up, but I wouldn’t think that was worth waiving the fees from the bank’s point of view.
That’s what I thought. Friedo seems to be saying that there’s a way.
That was the point I was making. Even for these types of arrangements, Europeans use direct bank transfers because they’re easy and cheap (or free). Similar wire transfers in the states cost around twenty dollars. Hell, when buying a house in the states, I couldn’t even send my earnest money to the realtor without using a wire transfer and incurring the $20+ charge.
Thanks, I overlooked the direct deposit requirement.
I have no idea why banks specify direct deposit- I know there’s a certain amount of resistance to switching banks after your direct deposit is set up, but I wouldn’t think that was worth waiving the fees from the bank’s point of view.
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I suspect (although of course I can’t be sure) that paying rent to an individual is not within friedo’s experience. There are lots of places where that is somewhere between uncommon and unheard of.
On my Credit Union’s online banking site there is a third party service called PopMoney. Using that, assuming I knew friedo’s email address or cell number, I can enter that information and the amount I want to send him. Friedo then gets an email or text message saying I’ve sent him money. If he’s never used PopMoney before he will have to provide his account number and bank’s routing number. Then the money gets deposited into his account. If he has used it before he doesn’t need to do anything – the money goes straight into his account. This service is free if I don’t mind it taking up to three days for the transaction to process. There is a fee if I need the transaction to be expedited.
Yes, this is using a third part service rather than using ACH directly, but I’m almost certain it’s using ACH behind the scenes. I could also use a service like PayPal, which again would use ACH to move money from my bank account to my PayPal account, and then they would put it in his PayPal account, and then he can move it to his bank account using ACH if he chooses.
I have my rent set to pay automatically directly from my checking account. I never need to use a pen on a little slip of paper to do it, so no, it really isn’t “writing a check” (at least, not me writing one). And the fee for this is only $1 per transaction, which compared to a rent total, is basically nothing (plus it saves me the time of dealing with it, and spares the possibility of accidentally forgetting).
As to why the banks would prefer direct deposit, and encourage customers to use it, it’s a lot easier for them to process than little pieces of paper, and that means less employees to deal with it, and that means more money for them.
Quite possible - I recently read about a woman who spend several months fighting a fine of over £250 for failing to provide proof she’d paid her fare on London transit because her phone died. When she provided proof that she had paid the monthly card fee before the incident. from her bank statement, they said “sorry, the fine is for not providing proof”. She had to go to a real court to get it reversed.
Given that 60M Brits speak "current account " English, 350+M Americans speak “checking account” English, plus another 30M of us Canadians who also speak “chequing account” English, perhaps a little more exposition and a little less snark is called for. I should point out that in my experience with a few banks over the last decades, the current trend the last 2 or 3 decades is to rename their accounts according to the tenor of the times and to confuse the financially illiterate. My current chequing account (if that’s the way to say it? The chequing account I have right now…) is called a “VIP Account”.
I recall an article (BBC? Economist? That’s where I get my snob news) about 10 or 15 years ago tried putting a sum ( £100?) in an account and see how many months it took for the balance to hit zero if it was untouched in assorted British banks. I don’t think more than one account lasted a year, thanks to fees.
If I’m reading this right, WF will charge you $15 if you make more than 6 non-ATM transactions a month for their chequing (sorry, “checking”) accounts. Plus, there are plenty of other usurious fees.
All of which makes me feel better about my Canadian banking fees, which make Canadian banks the most profitable business in the land, so they are no slouch at nickel-and-diming patrons.
So if UK banks have no fees on their “chequing”/current accounts, odds are that is a recent invention.
Yes, I mentioned those services in my post. These are relatively new services that don’t factor into the established culture difference between Europe and the US WRT using wire transfers vs. writing checks. Writing checks in Europe, even to individuals (like landlords) is less prevelant in Europe because the ability to transfer money from one person’s bank account to another’s has, for a long time, been much cheaper than in the US.
All the more reason that madsircool’s assumption that someone should need to write a check to their landlord to pay rent was so odd. I’m not sure why anyone needs to write a check for anything. It’s been probably 25 years since I’ve used one to pay for anything, get cash or to transfer money.
With that said, there are still check-writing holdouts across the US and this is due to the historic practice of charging such high fees for wire transfers in the US. Nobody in Europe would make a statement or express such an assumption as madsircool did, precisely for the reasons I discussed.
They also make money from cross selling other products. I used to do a lot of work for one of the UK’s big four banks. They regarded basic current accounts as a loss leader - they rely on cross selling loans, mortgages, premium accounts etc to make them pay. They also make a lot of money off overdrafts. Current accounts were an open door to other services.
There are ways to do it that cost less than buying checks and envelopes and stamps. I think a lot is custom. I’m a landlord. Nobody has ever asked to pay electronically. Some probably don’t have bank accounts I assume, since we get money orders they purchase at check cashing places or the post office. But others do. Some are older and/or not proficient at English, but some are younger US born people, nobody has ever asked to pay electronically. Though that would be fine. We pay handymen etc with Venmo, if they ask to be paid that way, utilities with free electronic bill pay, but I find we pay a higher % of business expenses with checks than personal expenses.
On personal side I write checks usually for estimated taxes and balance. Because electronic transfer comes out of my (interest bearing) checking (or ‘current’) account right away, but checks to tax authorities don’t get deposited for sometimes a couple of weeks and that’s enough float to care about for tax type amounts. But other than that, pretty few checks mainly only for one-off, one a year that kind of things if they don’t take credit card (where I get cash back) and where cost of check/stamp/envelope isn’t enough to overcome lesser convenience, IMO, of having to log onto to some site and tap in bank account info for electronic payment, rather than quickly scribble a check.
Back to OP question, I’m still unsure how different US bank checking account fees are than elsewhere, focused on the average person, or myself, rather than a ‘social justice’ type perspective that only considers poor people on every question. Not saying the latter is the wrong way to look at things always, just that having to pay a monthly fee for a checking account is pretty unusual in the US. Not counting people who pay fees because they just don’t bother to avoid them, but could.
Yeah, it’s a poorly titled list as many of those fees will apply to other types of accounts in addition to checking accounts - and the first two items aren’t even fees.
Really? Wow. It’s just so standard here - every bank makes it easy (and free) via their own phone apps. Heck, my Monzo account (an app-based bank) finds payees in my phone contact list automatically if they’re also a Monzo account holder. It’s instant.
Related anecdote: An elderly relative had a checking account that he wanted to close. Yeah, he could have called the bank to find out what to do, but he was hearing-impaired and using the phone was often hard for him. So he did something I think most people would find sensible – He didn’t write any checks on the account for a month, assured that all the checks he’d written previously had cleared, and then wrote a check for the exact amount his statement said he had. Balance goes down to $0, account effectively closed, right?
Except the account paid interest, so the check he wrote left $.34 in the account. Which was less than the minimum needed to prevent fees. After a couple of months, he handed me a letter from the bank and asked me to find out what was going on. His account was now something like $35 overdrawn. It took me a telephone call and a letter to straighten it out.