TD Banks Incoming Wire Fee (A look at Fees)

 I had thought to write a one year update but here we are and time has passed by. I hope to do that soon, hopefully 😉. I've been living. What is interesting is that the year before switching to part-time, I read a lot of books and then when I went part-time, I read less and then when I FIRE'd? You guessed right - less than part-time BUT I had to deal with a major life event not too long after I FIRE'd so I've been reading more this year...maybe not in the last couple of months but I started out strong and hope to exceed my reading goal. 

I had Incoming Wire sent to TD Bank and when I checked the update, I saw that the wire was incoming and alongside it was a $15 fee. WHAT?!  

A fee for the privilege of having money deposited into your account via wire transfer? That's absurd! I completely understand the fee charged for an outgoing wire (BTW, there are cheaper and FREE ways to send a wire transfer). The other aspect of it is how hypocritical it seems and feels. There is no charge for EFT deposits, there is no charge for payments via Zelle or other deposits but for a deposit via Wire transfer, there is a fee. I think this is why people move away from most B&M Banks - it seems like they Nickle and Dime you at every turn. 

So yes, I thought I was absurd when I saw it, I almost couldn't believe it. TD Bank actually increased fees for certain accounts I have recently and that led me to close one of them. I'm not sure the reasoning behind it. It reminds me of places that increase taxes on certain groups and so people leave and then they have a smaller base and need to increase it all the more. 

Why am I discussing things here? It is because if you are on the FIRE journey, you need to watch out for fees. In my case, when I sat down to decide which bank to use for the Wire, I had other options and those options don't charge a fee. I didn't think TD Bank charged a fee for incoming wire transfer but now I know. I remember hesitating using them but I was writing my banking details on a paper and I felt that should it fall into the wrong hands, I don't an account with much money in it. So for the sake of not risking other accounts, I am okay with using it. 

However fees are a part of finance. At the same time, they can be managed or eliminated. Risk isn't the only thing to manage in finance; there are other things to manage and fees are one of them. Here are a few fees that I recall off the top of my head:

• Account fees - These can usually be eliminated by keeping a certain minimum balance and/or engaging in certain transactions. Transactions can include direct deposits, certain number of debit card transactions, etc. Another way to eliminate them is to use a Bank that doesn't have such fees. Ally is a great example and there are others. Most of these are online banks. 
• Paper statement fees - Switch to online statements. 
• Foreign transactions fees - these usually apply to credit cards. I learned the hard way when another bank charged a nice amount of this a few years ago. Now, I'm mindful of which cards don't have a foreign transaction fee. 
• Overdraft fee - I get this. However, there are banks that don't charge this or have less of a charge. Some banks also offer overdraft protection and other avenues to avoid this. Some include linking to another account where they can withdraw the overdraft. 
• Late fees - pay it on time. If it is an oversight where you usually pay on time and forgot, call them and politely ask them to waive it. Most of them do. 

So these are a few. There are other fees with brokerages such as being charged to place a trade with an agent. Place the trade online. 

Bank fees aren't the only fees one encounters while trying to save up. There are fees like Commissions. I almost feel like commissions are something I need to discuss separately because in this day and age where it seems like some nurses are also selling insurance through certain "schemes" and I say that for lack of a better word, your first year premium is mostly commission to that person and those above them into that "business" - as they call it. 

If you are investing on your own, you also need to watch account fees in other ways. For example, some brokerages, services, and whatnots (Fintechs) charge fees for the amount of asset they hold. I recall seeing one where a person pays 0.35%. That doesn't seem like much because it's not even 1% but it is still a fee and at the end of the day, it is an outflow of money from you. An important aspect of the FIRE journey isn't so much the money you make but how much of it you keep. That was an important thing I learned in the beginning. That is also too broad a topic for me to include in here as it means managing outflows of various kinds including tax planning and others. 

An important aspect of the FIRE journey isn't so much the money you make but also how much of it you keep. 

So, if you are starting out, I say start by looking at fees. How much can you reduce what you pay. I really wasn't a believer in paying fees even back in college so I jumped onto the online banks when they started. I didn't want to pay overdraft or late fees. I recall looking at someone's account some years ago and the amount of overdraft fees, $35 back then was excessive. They had the money in another account, they chose to keep less in this account despite using the debit card of the account for nearly all their transactions. I'm talking about multiple overdrafts in a week and they would transfer the money into the account the next day or so but somehow didn't think to keep much in it. As I mentioned above, this can be eliminated by using banks that don't have such fees or less of it. Avoid monthly fees and other fees. I was raised by a banker and so started out with the belief that I'm to make money from banks and not the other way around. Which is probably a part of why I'm not a fan of paying banks for fees. They already make money on your deposits. 

I think a lot of people focus on their Inflow and fail to pay attention to their outflow. It is important to pay attention to both. I actually think the latter is important and it's not so you don't spend money, please spend it but that you don't spend it on things that don't need to be. You don't need to pay an overdraft fee. Sure you can choose to pay that if that is what you want. So the goal is in keeping more of what is yours, versus letting go of it. 

That said, of all the fees TD Bank has, I think they need to let go of their incoming wire fee. Are they trying to prohibit people from using that account for wire deposit receipts? In an age where multiple banks provide this service without fees, why put yourself at a disadvantage by holding onto the old school banking system of Nickle and Dime-ing customers. Since some of these banks are holding onto the vestigeal appendages of the Good Ol' Days, it is up to us to watch out and take the precaution for our good.