There is no bank or financial institution in existence that would be a perfect match for everyone. To make sure you get the best out of your bank or financial institution – you will need to put a little effort into researching your options before selecting a bank. Once you have selected the bank or financial institution, there are a number of things you can do in order to reduce your fees, increase your savings, and get all you can possibly receive from your banking relationship. Here are 40 ways to get the most out of your bank:
Before You Choose a Bank
1. Compare savings rates – If you are looking for a financial institution to save your money and earn interest, but need the money to be accessible - spend some time comparing different accounts at various banks and how much interest they pay.
2. Consider a credit union – Credit Unions are different from banks in that members are actual owners of the institution. They tend to offer better interest rates and more consumer-focused services than a bank. Many credit unions have very loose eligibility restrictions.
3. Look into online banks – Online banks typically offer higher interest rates than your local bank. Additionally, an online bank will be more likely to offer free checking accounts and more customer perks when compared to a small, local bank.
4. Make sure they’re FDIC or NCUA insured – When choosing a bank or credit union, understand whether the money is FDIC or NCUA insured; and make sure you understand the limitations to the insurance.
5. Check their financial health - Although your deposits at FDIC insured banks and NCUA insured credit unions are guaranteed by the US government, going through a bank closure is still an unpleasant experience and can result in losing your high CD rates. You can reduce the odds of this happening to you by checking your bank's health rating.
Reducing and Eliminating Bank Fees
Ideally, everyone could save their money at high interest rates or write checks from their checking account balances without ever having to pay a dime in fees to the bank. Since this isn’t quite possible, here are some tips for reducing or eliminating bank fees to help you keep more of your money where it belongs – in your pocket!
6. Look for low early withdrawal penalties on CDs – You want to save your money in a certificate of deposit that will offer the highest earnings while still providing a low early withdrawal penalty in case you need to take your money out of your CD earlier than expected.
7. Choose a credit union that belongs to an ATM network – If you are someone who uses an ATM card regularly, you will want to choose a credit union that belongs to an ATM network. This allows you to make withdrawals from an ATM that is part of the network without paying a fee, even if you are away from home and your local credit union branch.
8. Choose a credit union that belongs to a shared branch network – Frequent travelers may want to choose a credit union with a shared branch network, so they can conduct all banking transactions from any credit union or bank that belongs to the network just as they would in their home branch location.
9. Look for additional perks – Check what balance or other requirements are needed with your bank or credit union to qualify for perks like free safe deposit boxes and free checks.
10. Avoid overdraft fees – writing checks or otherwise withdrawing more money than you have is a costly mistake. For each transaction over your available balance, your bank may charge $20 to $40. Find ways to avoid overdrawing your account to stop paying overdraft fees – such as better budgeting or opting out of overdraft protection services. Also considering linking a savings account to your checking to provide overdraft protection.
11. Avoid other bank fees – there are a variety of fees a bank may charge – from monthly maintenance fees to inactivity fees to fees for a certain number of transfers. The key to avoiding bank fees is to understand what they are charged for and what you can do to avoid paying them, such as keeping a minimum balance to avoid a monthly maintenance fee. If there are no requirements you can meet to avoid a fee – consider a different bank account that does not charge the fee.
12. Set up an HSA – Health Savings Accounts allow individuals who have high-deductible health plans to save money for health expenses with tax deductible contributions.
Higher Returns and Bigger Rewards
When saving your money, you should always look for the highest return possible. When using a financial institution or financial product, you should take the time to look for solutions that offer rewards in addition to providing the service or product you need – it will help you get more for your efforts.
13. Open a rewards checking account – If you need a checking account, you may as well find one that offers a great rate! Most rewards checking accounts offer rates that are significantly higher than traditional checking accounts. Some will also refund any ATM fees you incur during the month (up to a certain limit).
14. Get cash back from Perkstreet – Very few banks allow you to earn cash back on debit card purchases. Perkstreet Financial is one of the banks with nationwide availability offering this service. A checking account with Perkstreet allows you to earn up to 2% cash back on all debit card purchases and up to 5% in specific categories.
15. Use a credit card for your daily purchases in order to get rewards – Rewards credit cards are nothing new, and many people have mastered the art of using a credit card all month long for all of their purchases in order to accumulate rewards; and then paying it off in full when the statement comes to avoid paying interest. This is one of the best methods of getting more for the money you’re already spending – as long as you are disciplined enough to pay your card off each month.
16. Check your banks' debit card reward programs - Many banks offer other rewards program for debit card use, similar to a credit card rewards program. Every purchase you make with your debit card earns rewards points. The points you earn can be redeemed for gift cards, digital downloads, and merchandise, travel or cash back – depending on your bank’s program.
17. Use add-on CDs to hedge against falling rates – If you can find them, add-on CDs allow you to add more money to a certificate of deposit before the CD matures, rather than opening a new CD.
18. Use no-penalty CDs to hedge against rising rates – You can open a no-penalty CD with a higher interest rate by choosing a longer maturity term. Because the CD has no-penalty for closing it out early, you still have access to your money if you should need to take it out of the CD before it reaches its maturity date.
The Technological Advantage
There are a lot of banking options available now that weren't around just a decade or two ago and more are being added all the time. By taking advantage of these new options you can save yourself money and time.
19. Set up account alerts for low balances and transactions – Account alerts are an instant way to find out if you are running low in your bank account and can help you avoid an unintentional overdraft. They can also alert you to potential fraud or identity theft before it becomes a huge problem.
20. Switch to banks that provide online check deposits – If you’re tired of running to the local branch to deposit a check, or tired of waiting for a mailed check to your internet bank to clear – you should look at options for depositing checks online. Some banks are now letting customers scan their checks and deposit from home.
21. Use mobile banking to keep up-to-date on your balances - connecting to your bank account via your phone or iPad is a quick and easy way to stay up to date on how much money is in your bank accounts at any given moment. It can help you avoid overdrawing your account or report potential fraudulent activity as soon as it happens.
22. Use an online calendar to remind you when CDs mature – When your CDs mature, you need to know what to do with it to ensure you don’t lose interest or have to pay fees. Use an online calendar or some sort of reminder service to alert you when your CDs reach maturity. Then determine whether to close it or renew it during the grace period so that you maximize your interest earnings.
24. Use person-to-person payments when you need to pay friends – Many banks offer P2P payments that make it possible to send money to a friend using just their email address. It’s quick and easy, and generally a free service offered by the bank.
25. Use online bill pay to avoid mail and stamps – writing and mailing checks is the bill payment method of yesterday. Thanks to technology, you can now use your bank’s online bill pay feature to pay your bills. If your bank doesn’t offer online bill pay – it may be time to shop around for a new bank. Buying envelopes, stamps, and checks can add up over time and using online bill pay is just more time efficient, too.
26. Use a mobile banking app to locate free ATMs – Most banks and credit unions allow you to use a certain network of ATMs at no cost – so why would you withdraw money from an ATM that charges $2.50 or more per transaction? Use a free mobile banking app on your phone to discover nearby ATMs that you can use for free.
27. Sign up for rate alerts at Deposit Accounts – You can sign up to track the rates at institutions you bank with or are interested in and receive alerts whenever the rates on one of their products changes or there is a new promotion being offered.
28. Look for account signup bonuses – Many banks offer tickets, items or best of all cash for opening a new account. In the current low interest rate environment these sign up bonuses can be just as valuable as the rate offered on accounts.
29. Use online bill pay to ensure your bills are paid on time - In addition to saving you time and postage, another benefit of online bill pay is the ability to ensure you're never late on a payment and avoid added fees. This can be especially valuable when your away on vacatation.
Many banks offer some small extras that can really add up. Take advantage of these days to save even more.
30. Safely get rid of confidential records at your bank or credit union shred days – Watch for mailings and announcements from your bank or credit union regarding their free “shred days”. On this day, you can bring in confidential records and statements and ensure they are safely shredded to eliminate any possible problems from identity theft.
31. Use your bank or credit union's coin counting machine – If you have a bucket of change saved, it can take hours to count and roll it all to deposit it. Many bank and credit union’s offer a free coin counting machine. Just dump in your change and let it count and roll your money for you.
32. Open a kid’s savings account for your child at an internet bank – Financial lessons should start at a young age. Open a savings account for your child to teach them to save a percentage of any money they receive. It’s a lesson that can save them a lot of money as adults.
33. Take advantage of free financial education – Many banks offer free classes to teach teenagers and adults the basics of managing money and investing. Learning some of the basics that they fail to teach you in high-school can save you a lot of money during your adult life.
Sometimes using a certain financial strategy can help you get more for your dollar, or enable you to get more value from your banking institution.
34. Use multiple accounts – Open multiple savings accounts to help manage your money better. For each purpose of saving, consider setting up a separate account. It will help you avoid using money saved for one purpose for another reason, making it easier to reach your savings goals. ING makes it very easy to open multiple subaccounts for this purpose.
35. Ladder CDs – Using a CD laddering strategy allows you to get higher rates offered by certificate of deposits while still giving yourself access to the money you save at regular intervals.
36. Maximize your FDIC Coverage with Beneficiaries – The $250k limit on FDIC insurance is only the standard maximum deposit insurance amount. You can exceed that limit at one bank based on certain ownership categories such as a revocable trust account with multiple beneficiaries.
37. Open a business checking account for your business – Keeping your personal and business expenses separate is necessary. Opening a business checking account allows you to pay bills on behalf of your business directly from business funds – which will make tax preparation much easier.
38. Do ACH transfers the right way – Some banks charge fees for ACH transfers and others offer the service free of charge. If you will transfer money from one account to another, it is a good idea to find a bank that offers ACH transfers for free.
39. Have a hub account – Use a hub account to facilitate an easier transfer of funds from one account to another if you regularly move your money to take advantage of higher interest rates or benefits offered by banks and credit unions.
40. Add POD Beneficiaries to your accounts – You can save your heirs a lot of headaches in the event of your death by adding them as POD beneficiaries on your account to make the process of claiming those funds much easier.