Transaction charges are the fees the bank charges for handling money going in (credits) and coming out (debits). These charges may be made on physical transactions, such as paying in cash or processing a cheque payment, but also for automated payments (direct debits and standing orders) – although the charges for these transactions may be cheaper.
When selecting an account, you need to weigh up the transaction charges with the standing charges (as above). You also need to think about whether you will make a lot of physical transactions or automated ones, as the charges on each may affect your decision.
Aside from the obvious (shopping around to find the lowest charge), here are a few ways you may be able to minimise your transaction charges:
- Don't exceed your overdraft limit.
- Try to minimise your physical transactions (cash and cheques).
Automate as many regular transactions as possible with standing orders and direct debits. Making one-off payments using online banking can help keep costs down, too