How to Save Money on Your Banking Accounts

Banking. Can’t live with out it but banks can be such a pain in the ass.

Charging you for this and charging you for that to use their services.

But, did you know that you actually have a lot of power in the relationship between you and the bank?

As technology has improved and competition has continued banks have offered more and more to win your deposits.

And, your deposits are very valuable to the bank.

That’s why you have power in the banking relationship.

Banks need your deposits to make loans.

Banks make most of their money by taking other people’s money (your deposits) and lending it out in the form of loans. 

So, you put $1,000 in a savings account that pays you 0.10% interest and the bank lends that out to someone (maybe even you) at 5.10% and makes 5% net.

They can also purchase funding from other banks but that tends to be expensive.

So, if the bank wants to make money it needs to get those deposits and as cheaply as possible. 

But, due to competition some banks are willing to pay more for deposits.

So, what can you do?

Use your deposits to make some money off of your money. 

Otherwise there are better places to put your money. 

Here are some of the ways you can take advantage of your banking needs:

• Don’t Pay Account Fees
• Earn Interest on Your Deposits
• Take Advantage of Additional Perks

But, before you know how to get the most out of your bank, you should first consider your financial services needs.

What Financial Services Do You Use?

You probably need a place to hold your money. 

So, when you get paid you can put it in there and when you need to pay a bill you do that too.

Do you need a debit card so you can make purchases or withdraw money from ATMs?

Do you need to be able to transfer money?

Are you looking for a bank or financial institution that offers good deals on foreign transactions?

There are many different types of financial services.

Your bank may offer some of them for free and some of them for a fee.

Try to think of all of the financial-related actions you’ve done in the last year and you may do in the future.

You should write down all of these financial services and create a section for the cost of these services.

That way, as you are looking at various financial institutions you can make sure you will be able to get all of your financial needs done at the lowest cost.

You can even start with your current bank and financial institution to figure out how much it costs you to use their services.

And, since you have the power of your deposits you should be paying as little as possible if anything at all for many different transactions.

Don’t Pay Fees

There are a lot of banks out there that will find a way to charge you monthly account fees unless you jump through hoops to waive the fee.

But, there are also banks that would be happy just to have your deposits and make it easy to hold your money without charging you fees.

Some of the hoops might not be that difficult to jump through like having a monthly direct deposit or a low minimum balance. 

But, if you don’t think you’ll meet the requirements to waive the account fees, you should look for a financial institution that will not charge you monthly fees just to hold your money.

Earn Interest On Your Deposits

How much interest does your saving account pay you on your deposits?

0.10%?

What about 0.50%?

Or, maybe even 1.00%

Did you know there are banks offering more that 2.00%?

Yes, on $1,000, you could earn over $20 each year.

Not a bad deal for simply parking your money with a financial institution which you’re probably already doing.

This is where it’s important to know what financial services you need.

Maybe, there are some services that you don’t really need and you can make the switch to a different bank account.

Hell, the new bank might even offer more services.

Additional Perks

There are all kinds of different little perks out there to entice you to use one financial institution over another.

A common one for online banks or institutions with not many ATMs is waiving ATM fees.

That way, if you can’t get to the specific institution’s ATM you don’t have to worry about fees when withdrawing cash. 

One time we opened up an account at a credit union just because they didn’t charge a fee for withdrawing money in foreign countries. 

They also reimbursed the ATM charge too. 

If we had done the same with our bank account, we would have been charged a fee for the international transaction and a fee for using the ATM.

Final Thoughts

Throughout most of history, banks have been able to do what they want without their customers changing.

But, with the internet and technology leveling the playing field banking has become increasingly competitive.

Your deposits are your power in the relationship.

A lot of the financial services that cost money to do ten or twenty years ago, is now inexpensive.

Get the services that you want, without paying fees, and even earning some money on your deposits.

Banks want and need your deposits.

If you feel like your bank isn’t working for you, find another bank that values your money.

BankRate is a great website to compare different banks and banking accounts.