Seven ways to bank smarter in the New Year
Every year people make new resolutions. Some want to lose weight, others have a specific goal they want to achieve.
A goal that everyone should have in the new year is smarter banking. Smart banking can save you money. But what does that mean? Here are seven ways to bank smarter.
Reassess banking services and fees
The banking industry is constantly changing. New products are offered continuously. Does the bank or credit union follow? Make an overview of the services your bank offers. Are they comparable to other banks?
Many banks have closed branches. If your bank or credit union has closed branches, have they increased ATM coverage? Even if you don’t currently use it, make sure your bank has strong online or mobile services. This is especially important if branches close.
What types of fees does your bank charge? Overdraft fees fluctuate wildly in the banking industry. For example, Ally Bank does not charge an overdraft fee, but Wells Fargo charges $35.
Does your bank or credit union offer a free check? If they do, does it require a minimum balance?
Check out other financial institutions’ services and fees and compare them to yours.
Consider using separate banks
What is your account balance? If you have more than $250,000 in your retirement account, not all of it is insured. Federal Deposit Insurance Corp. (FDIC) insurance covers up to $250,000 for the retirement category per financial institution. So moving part of your nest egg to another bank or credit union would make sense.
Bank fraud is another reason to consider using separate banks. If your debit card is lost or someone hacks your online account, having all your money in one place leaves you vulnerable. Splitting your money in different banks can save you a lot of trouble.
Because while most fraudulent transactions can be refunded by a bank, if reported in time, you may need cash to live on until the mess is fixed.
It is unlikely that your bank will fail and you will need FDIC insurance. But the probability that your account can be hacked is always there. It happens to people every day. Using multiple banks may not be the most convenient, but it’s a smart way to protect your money.
Share accounts based on savings goals
There are different savings targets. And one account does not fit all when it comes to achieving these goals. There are short-term, medium-term and long-term savings goals – each of which has different strategies.
For example, if you have a rainy day fund, you want it to be available if an emergency arises. But you don’t want your money to just sit and earn nothing. A high-yield savings account may be the answer. Try to find one with a high interest rate and no monthly maintenance fees.
For a medium-term goal, like a new car or vacation, a money market account may be the answer. It pays interest and you can access it with a debit card or check.
Finally, for long-term savings needs, consider a certificate of deposit (CD). With a CD, you get interest, but your money is tied up for a fixed period of time. This can work for a home payment. But be aware that if you need the money early, there is a withdrawal penalty.
Close unused accounts
Look at the number of accounts you have. Do you need them all? You may pay too many fees if you have more accounts than you need. On the other hand, you can save money if some are consolidated.
If you close an account, just make sure any bill payments or recurring deposits are switched to accounts that aren’t closed. When closing an account, follow up with your bank and ensure that no new transactions can be entered. If they do, this may reopen a closed account.
Update password and security settings
Fraud is everywhere in the financial world. And having strong passwords and security settings is essential. Although it’s a bit inconvenient, it’s a good idea to change your passwords quarterly or at least annually.
Have unique passwords. Do not use your grandchildren’s or pet’s name; mix it up with letters, characters and numbers. The point is to make it difficult for the hacker.
If your bank offers it, turn on multi-factor authentication. And set up alerts for login attempts or password changes.
You lock your house door at night – be aware of locking your financial door too.
Learn about online banking
Mobile and online banking has been a game changer. It makes managing accounts easier. And when bank branches close, it makes banking easier. At a glance, you know the status of your accounts.
You don’t need to go to the bank to deposit a check. Instead, you simply use your mobile app without having to leave your home.
You don’t have to run to the post office for stamps. With online banking you can pay your bills. You can also make person-to-person payments with your bank and apps like Zelle.
Link bank account to budgeting app
It’s time to organize your finances. And that starts with creating a budget. A budget allows you to track spending and saving.
There are many budgeting apps available that connect to your checking account. This allows you to see at a glance what transactions are going through your account each month. You will be able to see if you are maintaining your budget.
Smarter banking saves money
Whether it’s protecting your money from a hacker or checking higher interest rates, you can bank smarter in the coming year.
Take the time to evaluate your bank. And make sure it meets your ongoing financial goals.
Epoch Times Copyright © 2022 The views and opinions expressed are those of the authors. They are intended for general information purposes only and should not be construed or interpreted as a recommendation or solicitation. Epoch Times does not provide investment, tax, legal, financial planning, estate planning or other personal financial advice. Epoch Times has no responsibility for the accuracy or timeliness of the information provided.