How to Avoid the Most Common Types of Banking Mistakes at All Costs
Banking mistakes can be costly. Whether it is unexpected fees, poor savings returns, or the honest mistake of forgetting to check your balance and becoming overdrawn. Did you know that in 2019, banks charged over $11 billion in overdraft fees alone?
How can you avoid these mistakes and make the most of your financial institution?
Read on to learn five types of banking mistakes and how to avoid them.
1. Not Understanding the Different Types of Banking Fees
Do you know which services your banking institution charges for? Ask your bank for the list of their fees and note the actions you need to perform to void them. For example, direct deposit of your wages, monthly transactions on your debit card, or maintaining a minimum balance in your checking account.
You can avoid ATM fees by planning before you travel. Use your bank’s website or app to locate in-network, no-fee ATMs at your destination, have cash on hand, or use cash-back when grocery shopping.
2. Leaving Money in Low-Yield Accounts
Traditional banks offer low-interest rates for their savings accounts. Take advantage of higher rates offered by other companies in the financial industry. For example, products such as online high-yield savings accounts and term deposits.
Read the policies to understand any transfer fees and investment timeframes required to get the offered rates.
Checking accounts either have a very low-interest rate or offer no interest at all. Keep enough in there to cover your monthly expenses and transfer the remaining balance into your preferred savings account.
3. Not Shopping Around For the Best Deals
Doing all your banking in one place can have advantages. It’s easy to check your balances or transfer money between accounts. But it could also cost your personal finances in higher loan rates.
Research loan options, such as infinite banking, and compare rates. If you want to stay with your current bank, but their loan is higher, ask if they will match a competitor’s rate.
4. Missing Out on Rewards
Some banks offer bonuses if you do all your banking with them. You can unlock perks such as credit card points, discounts on loans, or fee-free banking.
Other rewards include reduced credit card interest rates for regular, on-time payments.
5. Not Securing Your Bank Details
When you bank in person, or online, it’s vital you keep your financial institution details secure. Here are five ways you can keep yourself safe:
- Take your deposit slips home from the bank and shred them
- Use a strong password for your online bank access
- Don’t do your online banking on a public Wi-Fi network
- Don’t leave your bank account number where others can see it
- Don’t write down your ATM PIN and leave it near your ATM card
Check your bank statements and online activity regularly and report any suspicious activity to your bank.
Develop Good Banking Habits Today
You can get peace of mind and higher returns by following a few simple steps. Understand the bank’s fees, research the available types of banking services and rates, and keep your details safe.
If you want more smart banking help, head over to the Financial Freedom section of our blog!