- According to a recent GOBankingRates survey, about 60 percent of people aren’t putting their money into savings accounts with the best rates.
- Further, they’re letting fees bury them. The average American pay about $7 a month in fees, which adds up to about $10,000 over a person’s lifetime.
- Personal Profitability creator Eric Rosenberg shares his experience as a former bank manager to get you on the right track with your money.
Do you know the difference between APR and APY? If you wanted to get the best savings rate at a bank, what type of account should you open? A recent GOBankingRates survey found that most people struggle with questions like these, so if you don’t know the answer, you are not alone.
In my first job after graduating from college with a finance degree, I jumped into the world of banking with a job as a bank manager. In my time at the bank, I learned the important details of how banks work from the inside. Here are some of the money management tricks I learned as a bank manager that you could use, too.
You Can Have More Than One Savings Account
Most people think of their primary bank accounts as a pair. A checking and savings account should lie at the center of your finances in most cases, but you shouldn’t feel limited to those two accounts alone. You can even have multiple checking or savings accounts if you’d like.
In the GOBankingRates survey, when asked which bank account offered the best interest rates, 27 percent said checking accounts and 33 percent said they didn’t know. Between those two answers alone, more than half of people didn’t know or put the wrong answer when it came to finding the best savings rate.
In reality, the best rates generally come from high-yield savings accounts or a time-bound Certificate of Deposit (CD). You can open different accounts for different purposes if you want, including multiple savings accounts. Open the account with the highest APY (annual percentage yield) to get the best rate.
Automate All the Money Things
Your online banking is a great tool to manage your money. You can set up automated recurring transfers to put cash away for savings without having to think about it. Online bill pay can automatically pay credit cards, utility bills and other costs.
Automated payments mean you never forget or pay late. That helps you raise your credit score and avoid fees. Automated transfers on your payday schedule take away the temptation to spend money on anything else, too.
Keep Credit Front and Center
Your credit report and credit score are the gatekeepers that give you access to the best interest rates and the best accounts. If you want a premium credit card or the lowest rates on a home or auto loan, you need excellent credit.
Never forget about credit accounts. Pay credit cards off in full every month before the due date. Never miss a due date. If you can do those things, you should be on track for excellent credit in the future.
Don’t Let Vices Take You Down
Overdraft fees can be really, really expensive. When customers came to me asking for forgiveness on their overdraft fees, I always had to pull up their account to see what was going on.
Those overdrafts often came from ATMs at casinos, liquor stores and tobacco shops. Overdrafting on vices is very expensive and avoidable. Be careful with your budget to save on both the initial cost and the added fees.
Being Nice Can Pay Off
When someone did come in with an overdraft — or a series of them — looking for relief, I had some latitude to waive those fees within the company guidelines. When someone came in yelling and blaming the bank for stealing his or her money, something 20 percent of banking customers worry about, according to the GOBankingRates survey, I wasn’t compelled to waive those fees.
On the other hand, when a mother came in who had overdrafted at the grocery store and asked nicely if the bank could help, I waived hundreds of dollars in fees for her. Following the golden rule can get you far in the banking world.
Never Ignore Your Money
In personal finance, the biggest mistake you can make is ignoring your money. Don’t let your bank accounts go by the wayside. It can be a costly mistake. Instead, focus on putting your money to work for you to get the best from your bank.
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