Money seems tighter than ever these days, and you may be racking your brain for ways to save. Budgeting, conserving car trips, and deleting your shopping apps are a great start, especially as you trim spending on luxuries. But one simple savings move could have you counting even more cash each month — switching banks.
Frequently, people choose a bank and stick with it for several years, even amidst seemingly minor inconveniences. However, if you scrutinize your statements, you might be shocked to discover years of unnecessary fees you’ve paid.
Antiquated institutions have enjoyed slipping in fees, commanding minimum balances, and requiring excessive account relationships of their customers. But the modern way to bank is here, and switching banks is more convenient and tech-savvy. Most importantly, it can save you money every month.
1. Eliminate Ridiculous Fees
When you start to think about it, isn’t it crazy that banks charge you money just to have an account?
Many banks charge customers monthly fees for things like account maintenance, which usually make no improvements in service. Worse yet, others charge fees for dipping below a minimum balance in your checking account.
As you consider switching banks, look for a bank with no fees, especially for accounts likely to ebb and flow with your daily needs. Your debit card transactions connect to your checking account, which will cause your balance to go up and down. If an institution is charging minimum balance fees, it’s a red flag to look elsewhere.
While you shop for a new bank, pull up your existing account terms to review features and benefits. Make note of the fees you currently pay and could pay if you make a mistake or need support. You may not have been charged these fees yet, but the threat of them is enough to inspire a switch.
2. Go Digital to Save Time and Trim Your Gas Budget
Brick-and-mortar banks offer some benefits, but with easily accessible and reliable internet and digital payment options, they’re not necessary.
Go digital with your banking and consider a fintech or online bank. You’ll skip the need for trips to a bank branch, saving you precious time and fuel.
Make deposits through your bank’s app the next time you get a check. After you’ve uploaded your check image into your app, write VOID on it, and keep it somewhere safe until it clears. And if you’ve got cash to stash, you can do so at a participating ATM.
Usually, digital banks partner with ATM networks that are associated with popular pharmacies or gas stations. This wide reach means you’ve got bank access in thousands of locations nationwide, not just in your neighborhood.
3. Make Savings Automatic When You Spend
If creating a savings habit has been a challenge, consider banking with an institution that makes it easy. Round-up purchases are a common way that some banks help their customers save without even trying.
When you swipe your debit card, the transaction rounds up the change to the nearest dollar. This extra change is immediately deposited into your connected savings account. Back when cash was king, you might have stowed your change in a jar. A round-up saving feature is a digital equivalent, allowing you to reap the benefit of painless savings deposits.
To boost your savings further, set up secondary automatic transfers when you receive your paycheck. Treat your financial goals like a bill. Initiate a transfer every payday or whenever you earn a bonus.
Generally, you can open several savings accounts with one customer profile. Use this practice to save for short-term goals like a vacation or long-term goals like a new car.
4. Bank With an Institution That Has Your Back
Sometimes you just get the math wrong. Or your deposit doesn’t hit when you thought it was supposed to. Suddenly, your account is overdrawn, and you’re in a panic.
With newer banking options, you can get overdraft protection without the budget-busting fee.
Connect your savings account to your checking to cover your misstep, and your institution will make the transaction for you. If you’re aware of your flub beforehand, you can use your banking app to make the transfer yourself.
Other times, your weekend away includes the casualty of a lost debit card. Some institutions charge you a fee to replace it, even blacklisting you if this happens too frequently.
Kinder, more customer-focused banks understand that life happens. Look for a bank that will send you a replacement, whenever you need it, no questions asked.
While you wait for its arrival, disable your card yourself using your app — no need for a panicked call. You’ll avoid the disaster of fraudulent charges and the need to restore your stolen balance.
Make Closing Your Old Account as Painless as Possible
The siren song of saving money and having a more pleasant banking experience may have you giddy about making the switch. But don’t let your excitement cause you to fumble this major financial transition.
First, open your new account and set up your contact information, two-factor authentication authorization, and recovery contact. Next, update your direct deposit information for anywhere you receive money, like your employer, payment applications, and external accounts. Allow for two successful direct deposit cycles before you make moves to close your old account.
Confirm that your bank has set your new account up for deposits. After that, you can update any outgoing payments to your new bank.
Be patient as you transition your incoming and outgoing transactions over the next few weeks. Remember, the goal is to save money, not rack up unnecessary late fees and penalties.
Then, and only then, reach out to your current institution and let them know you’re ready to close your account. Now you’re ready to save money for years to come, all thanks to your new, modern bank.