Banking tips to help you cash in
One of the side benefits of inflation is that banks are finally beginning to pay interest on your savings. Here are some ideas to help you make the most of your banked cash:
- Understand your bank accounts. Not all bank accounts are created equal. Interest rates, monthly fees, minimum balances, direct deposit requirements, access to ATMs, other fees and customer service all vary from bank to bank and need to be considered. Start by digging into the details of your accounts. There may be some things you’ve been unnecessarily living with like ATM fees or monthly account charges. Once you have a handle on your current bank, conduct research on what other banks have to offer.
- Know your interest rates. As a general rule, the more liquid an account, the lower the interest rate. Checking accounts offer the lowest rates, followed by savings accounts, which yield lower rates than Certificates of Deposits. Maximizing your earnings is as simple as keeping your cash in accounts with higher interest rates. While the interest rate may not beat inflation, they can vary dramatically from bank to bank. So take a look around. There are quality banks paying 3% or more than many other banks for the same account type.
- Make smart moves. There are a couple of things to take into account when making transfers. First, federal law allows for only six transfers from savings and money market accounts per month. If you exceed this number, you’ll be hit with a penalty for each transaction that exceeds six transfers. Second, if you invest in longer-term investments like CDs or bonds, there are penalties for withdrawing funds before the maturity date. So make sure you can live without the funds for the duration of the term.
- Stay diligent. Putting together a cash plan is just the start. The key to success is to be persistent. Besides losing out on potential earnings, mismanaging your cash can result in hefty overdraft fees. The more attention you devote to your cash, the more your money will grow.
If Dana McGuffin CPA, P.C. can help in the area of savings, tax preparation, tax planning and bookkeeping; all areas that can quite possibly result in money saved, please reach out to our office at 817.488.8939 to discuss.