Banking 101: How to Maximize Your Bank Accounts

When it comes to choosing the best bank accounts for your personal needs, there are plenty of factors to mull over. Extra fees, overdraft protection, interest rates and account types can really complicate your choices.

Here’s the good news: With careful strategizing, it’s possible to minimize your fees, while maximizing the utility of your accounts and the interest they earn to safely grow your cash over time.

From savings and checking to account rewards, here are some easy ways to make your bank accounts work in your favor.

Assess your saving options

If you’re looking to take advantage of the best savings bank accounts, check out DepositAccounts.com’s free online tool to learn more about savvy strategies. Provide the state you live in, the amount of money you have in savings and your expected investment timeframe, which can range from less than a year to more than five years, and this tool will churn out a list of options, such as a long-term CD, a single savings account and a reward checking account. It will give an estimate of the best return you can expect with each option.

“Don’t take a passive approach to saving,” Pierre Habis, president of PurePoint Financial, wrote in an email. “All too often, people don’t shop around for the best savings accounts — causing them to miss out on higher interest rates with other banks.”

A general rule of thumb: “If your account doesn’t offer at least 2 percent interest, you’re leaving money on the table,” Habis added. “A high-yield savings account will make your hard-earned money work for you.”

“Begin by considering what your priorities are, such as how important it is to be able [to] quickly access your cash, maximize your interest rate or minimize extra fees,” said DepositAccounts.com founder Ken Tumin. “Then, do your research to find the ideal options for your personal situation and needs.”

Evaluate checking bank accounts

You’ll also want to cast a wide net when selecting the best checking bank accounts for your day-to-day banking needs. This free checking finder tool sorts through a plethora of interest rates and fees to help narrow down the best checking accounts for your finances. It sorts results based on factors such as your lowest and highest monthly balance, how often you use your debit card, how often you use ATMs from other banks, whether you will use direct deposit and bill pay, and so on.

Consider high-yield reward checking accounts

Many reward checking accounts have yields that are higher than average. The Kasasa Cash reward checking account at South Dakota-based One American Bank, for example, earns 3.50% APY on qualifying balances up to $10,000. Most reward checking accounts are offered by community banks and credit unions, but they are also sometimes offered by online banks.

Keep an eye out for any specific requirements, such as logging into an online bank at least once a month or using the online bill pay feature.

Use free overdraft transfers to maximize interest earnings

Savings and money market accounts offer higher interest rates than standard checking accounts. Thanks to free overdraft transfers, it’s possible to link your checking and savings accounts in some cases, leaving only small amounts of cash in a checking account while the larger amount stays in a savings account to earn higher rates. When a large expenditure is made, a debit is made from the checking account to cover it and then an overdraft protection transfer from the linked savings account is initiated. For more details,check out this article.

Cut out extra fees

To maximize your bank accounts, it’s important to take a rigorous analysis and look out for any extra fees. “Ongoing charges can come out of nowhere and take you by surprise,” warned Scott Astrada, federal advocacy director for the Center for Responsible Lending in Washington, D.C.

“Fees for going below a minimum balance, for example, can really add up over the course of a year,” he continued. “Make sure you know what you’re paying for and don’t pay for anything you don’t have to.” This requires due diligence up front, but can really pay off once you’ve selected the right accounts and continue to use them over time.

With these tips in mind, you’ll be well on your way to maximizing your bank accounts. You’ll cut out extra fees, earn higher interest and grow your cash safely over time.