The other day someone asked me, “What should I look for in a new bank or credit union?” It was a question I hadn’t thought about in a long time and I’m guessing you may not have either. Generally folks will choose their bank or credit union and stick with it. As we talked through the features she might look for in her new bank or credit union, I was reminded of all of the great hacks I’ve learned over the years to help me use my checking and savings accounts to their fullest extent.
Here are some of my favorite checking and savings hacks:
Find a bank that will subdivide savings accounts. This single feature has made a world of difference for us. Our credit union allows us to have one “master” savings account, but we can divide it into “mini” accounts for our different savings goals. With one look I can see where we stand on these goals — no Excel spreadsheet required. Having one “master” account also allows us to get around the rules for transferring money in and out of savings accounts only a certain amount of times per month. As long as we are transferring the money between our “mini” accounts within our “master” account it doesn’t count against us. There’s no limit to the number of “mini” accounts and we can nickname them whatever we want.
Tip: Don’t have this option in your current bank and aren’t looking to change anytime soon? Another way to get the same effect is by opening multiple savings accounts in the same bank. While you’ll have less flexibility than a single, subdivided savings account, you’ll still be able to see your various goals all in one place. The only thing to keep in mind is that your bank may have limits in terms of the amount of money needed to start and maintain each account.Set up recurring transfers to savings. I’m guessing this is a hack that most of you already use, but it’s honestly a game-changer. Transferring money to different savings accounts right after your paycheck comes in ensures you’re working toward your goals before you’re even tempted to spend on extras.
Tip: If you use this hack, make sure you always keep enough money in your checking account to pay any bills. To be extra safe, we keep a buffer amount in our checking account just to make sure we never overdraw, particularly when unexpected expenses come our way.Sign up for text or email alerts. A few years ago I discovered my credit union could text me my checking account balance every day. I could also set up text/email alerts if our account ever dropped below a certain amount. Prior to that point, I meticulously checked our account every. single. day. — sometimes multiple times a day if I knew multiple bills were coming through and money was tight. These two features meant I never had to worry.
Tip: You should still periodically monitor your account to make sure all transactions have posted, everything is allocated to the right account, and there are no fraudulent purchases. I check my account every weekend, and because I stay current, it takes me less than five minutes.Open a high-yield savings account. It took me YEARS to get on the high-yield (high interest) savings account bandwagon. Initially, I was afraid we might not be able to have money at our fingertips should we need it. I was used to investment accounts that could take days or even weeks to get the money to you. However, I’ve found that a transfer usually takes less than a few days, and as long as we have enough money in our regular checking and savings accounts to help us ride out any immediate speed bumps, the interest earning potential of the high-yield account is well worth the wait. We initially used it for money we wouldn’t need for a year or more; now we are transferring more and more of our savings over to that account so we can reap the financial benefits.
Tip: Don’t have a high-yield savings account yet? Check out this Nerdwallet article to compare different accounts.Use “Bill Pay” for more than bills. This feature allows you to set up recurring or one-time payments to businesses or individuals, delivered electronically (when possible) or via a paper check through the mail. While I’ve never used it to pay my bills (all of my bills are on autopay through the specific companies), I have used it for quite a few other things. First, I use it for my recurring gifts to charity, including my church. Giving through Bill Pay allows me the flexibility to change the amount or payment date at any time. Plus, it saves the charity a lot of money in fees compared to giving by credit card. I’ve also used Bill Pay to send money to individuals who don’t use Venmo or PayPal.
Tip: If you do decide to set up recurring payments via your bank’s “Bill Pay” feature, be sure to keep close tabs on your actual bills, since sometimes payment amounts and due dates can change with little warning.Pay directly from your checking account wisely. I very rarely use my debit card or pay directly from my bank account when I’m shopping, whether online or in person. Credit cards generally offer more protection against fraudulent purchases than typical banks do. It’s also usually easier to get a new credit card than set up a whole new bank account if your information gets stolen. Since I pay off my credit cards every month, this approach has worked well for me. It may make sense to pay via bank account to avoid fees, though. My husband and I do that with our rent payment (since there was a $40/transaction fee to pay via credit card), some of our donations, tax payments, and our payments directly to individuals.
Tip: When the option is available, I’m a big fan of using PayPal when I’m shopping online. This gives me the flexibility to use either my checking account or my credit card knowing my information will be kept secure.