Having a bank account is convenient in more ways than one. However, choosing a bank account that suits your needs can be complicated as there are thousands of banks to choose from.
Apart from choosing a bank, it is essential that you first determine the right account for your needs. There are plenty of bank accounts available in the market for instance, a checking account can help you to pay bills and make other payments easier while savings and money market accounts as well as certificates of deposits (CDs) can be a safe place to store your money.
There are numerous options to choose from but an important factor that you need to consider is looking out for the fees and interest rates.
These tips and tricks can help you bank smarter so that you can earn more and save time.
Banking fees can be a quick add-up to your expenses and you might not even know but it is taking a bite out of your account balances. According to Forbes, out of 7.1 million American households that are unbanked, 34% of them said that high fees were one of the major reasons for not having a bank account.
Moreover, consumers don’t even re-evaluate their bank accounts or consider switching them if the bank continues to charge the minimum fees. Consumers need to evaluate what these fees are and what they are paying as well ass whether they can be avoided or not.
Here are some common fees that you may encounter include:
After evaluating the fees that you are paying, consider methods you can utilise to avoid these. For example, you can set up low balance alerts to know that the balance in your checking account has fallen below the desired amount. Then you can top up the account to avoid monthly or overdraft fees.
Switching banks might seem like a big task, but it is easier nowadays. Banks have been establishing an online presence and it can be easier to choose an alternative that reduces your costs.
Usually, online banks have lower account maintenance fees and offer attractive interest and perks to its users. This is because they have low physical presence and have to spend less in comparison to traditional banks as they don’t have to pay rent for the building, or electricity expenses.
Due to this, they have low overhead costs thus, can pass some savings to consumers.
Various bank accounts available in the market such as savings and money market accounts as well as CDs can help you grow your money. However, banks aren’t same when it comes to annual percentage yield (APY) or interest rates.
Every financial institution has different terms and interest rates when it comes to its products. Many banks have lowered the interest rates to consumers due to the pandemic. However, this is not an excuse to stop saving.
You can look around and find the best suitable bank for your needs. For instance, you can find a better interest rate with a CD in comparison to a regular savings account. However, you need to be comfortable to lock your money for a set period.
Again, online banks can be your go-to partner to earn higher interest rates but of course, you need to consider things like minimum deposit requirements and monthly fees before investing your money with an online bank.
You also need to make sure that CDs carry a higher minimum balance requirement than a savings account and if you withdraw your money before the end of its term. You may incur fees and it can take out some of the interest that you have earned. So, ensure that you don’t need that amount for a set period of time before investing into CDs.
If you have different savings goals then it might be a smart choice to keep your money in different accounts and if possible, at different banks.
With choosing different banks, you get an upper hand to the best of both worlds. For instance you can have an online savings account to earn high interest rates and a checking account at a traditional bank for your daily expenses.
If you have mid-term goals such as saving for down payment of a car or a vacation. Then you can use money market accounts to hold these funds. A CD can help you to save money when you don’t plan to use it for a while.
Every financial product that you attain can be beneficial in its own way. You just need to study different banks and determine the best option according to your needs. BankQuality can help you choose the right financial institution to help you choose which bank offers you the best perks and rewards while ensuring safety of your money.
Having multiple accounts at a bank can be helpful. However if you carry an account that has high fees and low interest rate then closing this account can help you save some extra money.
If you plan to streamline your finances and maintain your banking activities effectively then you just need these bank accounts:
These accounts can be sufficient for your needs, however if you have any other saving goals that can be fulfilled by having additional bank accounts, then you can go for it. But, if you have more bank accounts than you need, trimming these accounts can help you consolidate your money. And you might save a little cash in the process if you’re able to get rid of accounts with higher fees.