Seven Ways to Bank Smarter in the New Year

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Every year people make new resolutions. Some want to lose weight, others have a specific goal they wish to attain.

One goal that everyone should have in the new year is banking smarter. Smart banking can save you money. But what does that mean? Here are seven ways to bank smarter.

Reevaluate Banking Services and Fees

The banking industry is constantly changing. New products are continually being offered. Is your bank or credit union keeping up? Do an inventory of the services your bank offers. Are they comparable to other banks?

Many banks have been closing branches. If your bank or credit union has closed branches, have they increased their ATM coverage? Even if you’re not currently using it, ensure your bank has strong online or mobile services. This is especially critical if branches are closing.

What types of fees are your bank charging? Overdraft fees swing wildly in the banking industry. For example, Ally Bank doesn’t charge an overdraft fee, but Wells Fargo charges $35.

Does your bank or credit union offer free checking? If they do, does it require a minimum balance?

Check out other financial institutions’ services and fees and compare them with yours.

Consider Using Separate Banks

What’s your account balance? If you have more than $250,000 in your retirement account, it’s not all 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 makes you vulnerable. Separating your money into different banks could save you a lot of trouble.

Because even though most fraudulent transactions might be provincially repaid by a bank, if reported in a timely fashion, you might need money to live on until the mess is straightened out.

It’s unlikely that your bank will fail and you'll need FDIC insurance. But the likelihood that your account could be hacked is always there. It happens to people every day. Using multiple banks may not be the most convenient, but it is a smart way to protect your funds.

Divide Accounts Based on Savings Goals

There are different savings goals. And one account doesn’t fit all when it comes to achieving these goals. There are short-term, mid-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 accessible if an emergency arises. But you don’t want your money just to sit and not earn anything. A high-yield savings account could be the answer. Try to find one with a high-interest rate and no monthly maintenance fees.

For a mid-term goal, like a new car or vacation, a money market account may be the answer. It earns 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 receive interest, but your money is tied up for a set time. This may work for a home downpayment. 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 all of them? You may be paying too many fees if you have more accounts than you need. On the other hand, you might save some cash if some are consolidated.

If you close an account, just be sure that any bill payments or recurring deposits are switched to accounts not closed. When you close an account, follow up with your bank and ensure that no new transactions are allowed to post. If they do, this could reopen a closed account.

Update Passwords and Security Settings

Fraud is everywhere in the financial world. And having strong passwords and security settings is imperative. Although a little inconvenient, it’s wise to change your passwords quarterly or, at the least, yearly.

Have unique passwords. Don’t use your grandchildren’s or pet’s name; mix it up with letters, characters, and numbers. The point is to make it hard for the hacker.

If your bank offers it, turn on multi-factor authentication. And set up alerts of attempted logins or password changes.

You lock your house door at night—be cognizant of locking your financial door as well.

Learn About Online Banking

Mobile and online banking has been a game changer. It makes accounts easier to manage. And with bank branches closing, it makes it easier overall to bank. At a glance, you know the status of your accounts.

You don’t have to go to the bank to deposit a check. Instead, you simply use your mobile app without ever leaving 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 lets you track your spending and saving.

There are numerous budgeting apps available that will link with your checking account. This will let you see at a glance what transactions are going through your account monthly. You’ll be able to see if you’re maintaining your budget.

Banking Smarter Saves Money

Whether it’s protecting your money from a hacker or checking on higher interest rates, you can bank smarter in the upcoming year.

Take the time to evaluate your banking. And make sure it meets your ongoing financial goals.

The Epoch Times Copyright © 2022 The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.