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Maximize Your Bank Account Benefits
If you’re only using your bank for deposits and withdrawals, you might be missing out on other perks and rewards your account offers. Bank accounts can provide several useful benefits that help you manage your money, earn a higher return on savings, and more. Here’s how to ensure you’re making the most out of your bank account.
Maximize Your Savings Yield
Keeping all your money in a checking account could mean missing out on interest earnings. Checking accounts often pay little to no interest. If your bank offers savings accounts, opening one and regularly contributing to it can earn you a better return on the cash you don’t need for everyday expenses.
As of May 2023, the average interest checking account earns just 0.07%. In comparison, some high-yield savings accounts offer an annual percentage yield (APY) of 3% to 4%. For example, putting $5,000 into a savings account with a 4% APY could earn you $204 in interest over a year, compared to just $3.50 in a checking account with a 0.07% APY.
Use Banking Alerts
Online and mobile accounts often come with bank alerts you can set up to get messages about account activity. Notifications can alert you to potential fraud or other bank activities that need your attention. Depending on your bank, you may be able to customize notifications for unusual transactions, low balances, or spending thresholds.
Make Use of Rewards Programs
Some bank accounts offer reward opportunities that pay you points or cash back for account purchases. Using rewards checking is a way to get an incentive for spending without worrying about racking up a credit card balance or dealing with interest charges.
Understand Banking Fees (and How to Avoid Them)
To get the most value from your bank account while minimizing fees, be aware of the different usage fees, such as those for certified checks or wire transfers. One recurring charge to watch out for is the monthly maintenance fee, which can range from $10 to $15. Some accounts waive this fee if you meet certain conditions, like maintaining a minimum daily balance or making a certain number of monthly direct deposits. If you can’t meet these conditions, consider shopping around for an account without maintenance charges.
Review Overdraft Penalties and Overdraft Protection Options
Overdraft penalties are fees charged if a transaction takes your bank account balance into the negative. While some banks no longer charge overdraft fees, others still do, with fees around $35 per transaction. Bringing your balance above zero right away may get the fee waived, and some banks offer a grace period for covering the overdraft amount. You could also opt out of overdraft protection for debit card purchases to avoid these fees.
Take Advantage of Borrower Discounts
When you need to borrow money, it’s a good idea to shop with your bank or credit union first. Financial institutions may offer loyalty discounts and better loan interest rates to existing customers. For example, US Bank customers with an open checking account may qualify for a credit toward mortgage closing costs, and Bank of America Preferred Rewards customers may qualify for rate discounts on car loans and home equity lines of credit (HELOCs).
Look Into Financial Advising and Asset Management
Beyond banking services, financial institutions may offer financial planning and wealth management services where you can work with an advisor one-on-one. If you’re unsure of the best way to save for college or retirement, an advisor at your bank may guide you. However, be aware of advisory and brokerage fees before signing up for these services.
The Bottom Line
Think of bank accounts as more than just a place to store money. Various banking features can help you manage your cash and earn a high yield on savings while keeping fees to a minimum. If your bank is light on perks and heavy on fees, it might be time to shop around for a better account. Comparing account fees, APYs, minimum balance requirements, and perks can help you find a better home for your cash.
For any mortgage service needs, call O1ne Mortgage at 213-732-3074. We’re here to help you find the best solutions for your financial needs.
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