How to Get Most out of your Bank Accounts

Having financial stability, security, and safety you can count on when you need it the most is paramount for leading a life of prosperity and well-being. Almost all working people have a bank account, but many wrongly think that having a bank account is free of charge.

Your account is seldom wholly free, but it all depends on how you use it. A simple bank account can be costly if you don’t know how to properly manage your finances and banking fees. There is much more to an account than a monthly fee.

Some bank users expect a range of benefits when paying their monthly fees regularly. These benefits usually include either a breakdown cover or a type of insurance. However, the truth is that you don’t need any of these extras.

All you need to get the most out of your bank accounts is to know how to use them and what to watch out for. With that in mind, the following tips will help you understand the importance of financial responsibility and why developing healthy financial habits is paramount for staying on top of your financial and banking account game.

In this article, you will learn about:

How to Use Your Bank Accounts in Canada
How to Choosing the Right Bank in Canada
How to Reduce and Eliminate Bank Fees
How to get Bigger Rewards & Higher Returns

How to Use Your Bank Accounts in Canada

Improper use of your bank accounts leads you to develop a lengthy debt, paying unnecessary fees, penalty rates, etc. You can avoid all these financial perils and improve your cash management by understanding a few basic things.

Use Free Text Alerts
Learn All About Mobile Banking
List All Bank Charges
Develop a Healthy Relationship with Your Bank
Know When to Switch Accounts
Take Care of Your Overdraft
Find out All about Overdraft Fees
Seek Financial Advice
Think about Having a Reward Bank Account
Bonus: How to Know When to Switch Accounts

Use Free Text Alerts

Modern banks constantly upgrade to the latest, most innovative automatic services, such as free text alerts. You can benefit quite a lot from using such a service, and all it takes to get it is giving your bank your mobile number. The bank sends text alerts when users go into overdraft.

Since going overdrawn involves some fees, knowing that you went into overdraft can help minimize the impact. On the other hand, you can request text alerts yourself. They inform you when you have received money or when your balance is near the end. It’s good to have these to know your financial situation at all times.

Learn All About Mobile Banking

Mobile banking is a quick and convenient way to do almost everything you can by visiting a branch office. All you need to get this excellent service is a smartphone. A mobile banking app allows you to apply to change your overdraft, make various payments, check your balance, etc.

Setting up your mobile banking app is quick and easy, and you can use it wherever, whenever. If you’re about to make a purchase but you’re not sure about your balance, this is the quickest way to ensure you have the necessary means.

List All Bank Charges

Banks charge you for a range of things. The best examples are foreign transactions and cash withdrawals. Many people use their cards when abroad without being aware that each transaction they make abroad involves a certain charge, fee, rate, etc.

You can list all the charges your bank applies by either calling your bank for a list or checking it yourself online. By knowing how and when your bank charges, you can develop a healthier banking routine to manage your finances more responsibly and avoid paying unnecessary charges.

Develop a Healthy Relationship with Your Bank

Nothing can do you justice better than having a healthy relationship with your bank. If you’re unsure about something or think your account may not be suitable for your current financial needs, talk to your banker. Explain your situation, and be consistent about what type of services would suit your financial situation.

Most of the time, people aren’t sure what they want from a bank and end up with a completely wrong bank account. Since this is nothing more than an unnecessary charge on your already overwhelmed budget, speaking to your financial advisors may be what you need to improve your financial standings.

Every bank offers a range of different bank accounts, each with different services, benefits, etc. Look into those offers and evaluate each one to determine what it offers and how it fits your financial picture.

Know When to Switch Accounts

You can save quite a lot by not using an account that doesn’t cover your needs. Instead, know when to switch accounts. Think about what you want from your account:

Do you need a bigger or cheaper overdraft?
Do you want an account with no overdraft at all?
Do you plan on keeping money as a balance?
Are you after an account that pays interest on such a balance?

All these things can help you make the most out of what you have.

Take Care of Your Overdraft

The majority of banks offer bank accounts with an overdraft. That isn’t because these institutions are working to their consumers’ advantage but charging a hefty interest rate for allowing their users to spend money they don’t have.

However, it’s possible to save money and use your overdraft. The best thing is to only go into an overdraft if you have a backup plan to pay your debt in full. Knowing the fees for using an overdraft can also help. Most people use their cards to make standing orders and use Direct Debits.

The problem occurs when the user isn’t financially able to cover these expenses promptly. To avoid getting into and over your overdraft, you should constantly monitor your standing orders.

You can save money by canceling the ones you can cancel. If you go over your overdraft, you’ll also be charged a penalty interest rate, which is another extra charge to worry about.

Find out All about Overdraft Fees

Banks charge an interest rate to allow their users to use an overdraft. Since these interest rates vary from bank to bank, researching and comparing may help you find a bank with lower rates and better terms. On the other hand, if your bank has an account with better terms, consider switching to save money.

Seek Financial Advice

If you need an unauthorized overdraft to go about your daily spending, it’s more than clear that you’re about to face some financial turmoil. Since doing so might escalate into serious money problems, the best thing you can do is to seek financial advice.

If you act on it early, you have a better chance of fixing the problems before they get worse. Waiting will only prolong the situation, leaving you with a lengthy debt.

A financial advisor might help you out of peril by examining your budget, finances, and banking behavior. Assessing your expenditure and income capabilities is a certain way out of your financial difficulty.

Think about Having a Reward Bank Account

Packaged or reward bank accounts are a special type of account that provides a range of rewards for a monthly fee. These rewards include various discounts in shops and stores, technology, and travel insurance coverage.

Scotiabank Preferred Package

If you have such an account, it would be good to know if you are getting decent value for your money to ensure you’re not paying that fee every month without getting anything in return. Having an account with a range of benefits doesn’t necessarily mean you get your money’s worth.

It would be wise to reevaluate your finances and account benefits to see if you need extra services. Some banks offer this type of account to sell more. Most people don’t think it through before accepting. Think twice before you agree to use a reward bank account.

Bonus Tip: How to Know When to Switch Accounts

Take the following factors into consideration:

Your account is overwhelmed with extra charges.
The costs of using an overdraft are piling up.
You’re earning a very low interest on your balance.
Your account is spending more than it’s returning.
You plan on starting saving or paying off a debt by switching to get an introductory cash reward.

Switching accounts is easier than ever before, and this can make a big difference if you choose wisely.

How to Choose the Right Bank in Canada

Now, a good part of your banking know-how depends on your ability to choose the bank that offers the right services to support your short and long-term financial needs and goals. With that in mind, here are five great tips on what to look for when choosing a bank.

1. Savings Rates

The first thing you should consider before choosing a bank is your ultimate goal. If you want to earn interest and save money, you need a financial institution that offers banking options that support your goals.

If you want to save but keep your money accessible, the best course of action is to compare different types of accounts at other banks to see which institution offers precisely what you’re looking for. It will also allow you to see which bank offers the best savings rates.

2. Credit Union Is Always a Choice

There is a wide range of reputable credit unions that offer better terms than the majority of banks. Many of these financial institutions have very flexible eligibility restrictions and consumer-centric services. They also offer better interest rates.

3. Online Banks Are Currently Trending

Online banks are trending, attracting many consumers due to offering higher interest rates than most banks. Online banks offer more customer perks and free chequing accounts than an average local bank. You should look into what online banks have to offer.

4. Go with an Institution that’s NCUA or FDIC Insured

Only choose financial instruction that’s insured with either NCUA or FDIC. Any institution, a bank, or a credit union that isn’t insured with these regulatory bodies isn’t worth your time and trust. Also, this insurance includes specific limitations. Understanding how these limitations work is also a good thing to know.

5. Only Choose Financially-Healthy Institutions

Since dealing with a bank closure and losing your high CD rates is something you’ll want to avoid, check your chosen institution’s financial health before you commit. View their health rating online to ensure you’re on the right path.

How to Reduce and Eliminate Bank Fees

It would be ideal to issue checks from your checking account balance without paying a fee to your bank or save at an ideally high interest rate. Since this isn’t the case, the trick is to do the most with what you have.

Since banks try to charge you with anything and everything they can, here are a couple of great tips for reducing or eliminating bank fees to save money along the way.

1. Find a Bank with Low Early Withdrawal Penalties on Certificates of Deposit Accounts

Many banks condition you with limitations and restrictions when you want to save money. Since certificates of deposit are the best option to save money, look for CDs with the highest earnings and low penalty fees for early withdrawal, and always have your cash available if you need it ASAP.

2. Only Go with a Credit Union with an ATM Network

Having an ATM card has become a regular thing nowadays. You probably have one. If you use it quite often, choosing a credit union that is part of an ATM network would be wise. That way, you avoid paying unnecessary fees for withdrawing from an ATM outside your network each time you’re away from your local branch.

3. Look for a Credit Union with a Shared Branch Network

If you’re a frequent traveler, choosing a credit union with a shared branch network makes the most sense. It allows you to avoid various fees for banking transactions as your chosen branch is part of the network.

4. Always Look for Additional Perks

Free checks, free safe deposit boxes, lower fees, and any additional perk will do. With that in mind, look for a bank with a balance or other requirements to qualify for these valuable and complimentary extras.

5. Avoid Overdraft and Other Fees

Most people get too comfortable withdrawing money or writing checks, taking more than they can give back. These costly financial mistakes can make your budget run dry quickly. Any transaction that takes you over your available balance includes a fee.

So, as you can see, overdrawing your account leads to paying costly overdraft fees. However, there are several ways to protect yourself from overdraft fees. You can link your savings account to checking, look into any overdraft protection services, or consider better financial management.

Banks charge a wide range of fees, from fees for several transfers and inactivity fees to monthly maintenance and penalty fees. To avoid paying these fees, you need to understand why they are charged and the actions you can take to avoid paying them.

If your bank prevents you from paying these fees, you should find an institution that does.

How to get Bigger Rewards & Higher Returns

Saving money is all about earning the highest earnings possible. Take your time and compare all the options to find an institution with the best rewards and highest returns.

1. Look for Banks that Offer Cash Back on Debit Card Purchases

Rare are the banks that allow their users to earn cashback on all purchases they make with debit cards. It takes some time to find a bank that offers such options, but it’s well worth the trouble as you can earn quite a lot if you use their services wisely.

2. Consider a Bank with a Card Reward Program

Most banks offer nice reward programs for users who regularly use debit or credit cards. This reward program allows you to earn points with each purchase. You can redeem these points for cash back, travel, merchandise, digital downloads, gift cards, and more. See a few attractive card offers with rewards below:

Conclusion

We sincerely hope our tips will help you get a hold of your finances and learn how to manage your banking most effectively. We aim to help our readers work every angle of their financial management to maximize what they have.

Every bank account has its ups and downs, but the trick is to know both to avoid overwhelming your budget with unnecessary costs. Being financially responsible and successful isn’t that hard, but it does take some time and effort.