I used to have a really frustrating bank. I got nickled and dimed for everything. Every time I'd use my money I'd get charged. Every time I'd deposit money I'd get charged. Every time I used my card I got charged. It was so annoying- I was literally paying to use my own money! Fortunately, I found another bank that was better, and found some other ways to make my banking more cost effective. Here are some tips on how to do that from a reader.
Banking can cause massive headaches for anyone. Simply navigating the different banks, their corporate jargon, and the different accounts offered is a difficult task at times. And this is without even considering the fees! When taking into account overdraft protection fees, ATM withdrawal charges, and other additional costs, unscrupulous banks can severely eat into your savings, if you’re not careful. There’s nothing more frustrating than finding a large chunk of your cash has been taken up by costly and avoidable charges from your bank. It’s consequently important, especially if you are currently low on savings, to practice responsible banking habits. Here are just a few ways you can make your banking more cost-efficient.
Choose the Banking Option that is Best Value for You
The first thing to be aware of when trying to save on banking costs is that there is not a one size fits all solution for choosing the bank and account that is the most cost-effective. Every person’s financial situation and circumstances are different. You should therefore take your own finances into account when choosing who to do your banking with. For example, you may initially be attracted by accounts which offer low or no monthly fees. However, the benefits associated with regularly fee-paying accounts may in fact make them more cost-effective for you, if you are confident you will be able to make the minimum deposit comfortably every month. Conversely, if you are looking to increase your savings in the short-term, a high-yield savings account can be highly useful. This is because initially, they tend to have substantially higher interest rates than standard savings account. However, banks can legally change their interest rates for these accounts at any time, so it is very likely this will happen after a certain period. As such, an account with a fixed interest rate may be more advantageous if you are looking to save money over a longer period of time.
It is thus clearly important that you choose the banking method that is right for the person using it. The greenlight debit card is a popular option for parents. It teaches kids responsible money management skills and even comes with a chore app!
Find an Account with No Fees
The most common everyday bank accounts are known as checking accounts, though they may also be referred to as current accounts, depending on what area of the world you’re in. Checking accounts are transactional, meaning they are designed for regular use. As such, most good checking accounts will allow for smooth and efficient movement of money in and out of them. However, it is common for many of them to require a minimum amount to be paid in each month. This is naturally not an issue if you are certain that you’ll be able to meet this amount. However, failing to do so can incur additional fees, and even lead to your account being closed, if this amount is missed multiple times. In addition, many major banks also charge monthly maintenance fees. These are not usually large, but are also easily avoidable. If you’re looking to make your banking more cost-effective then, opting for a zero-fee checking account with little or no minimum monthly deposit is a good way to do so. This will ensure any hard-earned money you put into your account will not disappear suddenly. One drawback of these accounts is that they tend to offer less additional perks than other accounts, although this is beginning to change gradually, as no fee checking accounts are becoming more widespread. You should therefore not necessarily disqualify all accounts with fees when choosing a checking account.
Open a Separate Savings Account
Along with checking accounts, saving accounts are probably the other most common forms of bank account. However, the differences between the two may not necessarily be readily apparent. As such, many individuals tend to think they only require one banking account, when in actuality the purposes of the 2 are quite different. While checking accounts are transactional, and therefore designed with their everyday usage in mind, saving accounts, as the name would suggest, are for people looking to grow their savings, perhaps for a specific purchase, or in case of emergencies. Consequently, saving accounts generally have much higher interest rates than checking accounts, which often accrue no interest at all. To make your banking more cost-efficient, you might consider moving any money you are not planning to immediately spend in your checking account to a savings account. This will allow you to significantly increase your savings, at a higher rate than you were previously. Banks may also offer you enticing benefits as an incentive for opening a savings account with them, too. However, savings accounts also come with some specific disadvantages, too. In particular, they usually have a limit on the amount of times they can be accessed within a specific period. Exceeding this can therefore incur some severe financial penalties. In view of this, you should be certain that any money you put into a savings account doesn’t need to be immediately accessible.
Keep a Tab on Your Transactions
Two of the most expensive and inconvenient charges associated with banking are overdraft fees and bounced cheque fees. Overdraft fees are incurred when your account balance goes negative, and you don’t have an agreed overdraft limit with your bank. Bounced cheque fees, meanwhile, occur when someone tries to cash a cheque from your account that is greater than the balance in your bank account. In fact, one bounced cheque fee alone can cost as much as $65. To avoid these fees, try to track transactions in and out of your bank account as diligently as possible. This way, you can order any payments you make in a way that ensures you’re not paying for something before the money you are paying for it with is in your account. It’s also important to be aware of any late payment penalties associated with your bills, so you can deduce in certain situations whether these fees are cheaper than the fees your bank will charge you.
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