YOUR MONEY

How to Get More out of Your Banking

Managing your daily finances is easier and more convenient than it has ever been, thanks to online banking, telephone banking, and ATMs. But your bank account is more than a place to withdraw money and pay bills.

For instance, you can choose a bank account that is linked to your debit cards and credit cards to earn reward points. Your bank account can also serve as the foundation for all your investing arrangements with a “pay yourself first” plan. And by taking advantage of some simple strategies, you can even save money while you bank. Here are a few ways to get more.

Choose the right account

Bank accounts and service packages are far from a one-size-fits-all proposition. Innovative programs are available to benefit people of every age, stage, and lifestyle, from students to seniors, from new Canadians to movie lovers. There is even a program that helps you save money in a high-interest savings account when you use your debit card.

To find the right fit, take a closer look at your money habits:

• Can you keep a minimum balance? Many banks will waive or reduce service fees if you maintain a minimum monthly balance (usually between $1,000 and $2,000).

• How many cheques do you typically write in a month? How often do you use your debit card? If you make relatively few monthly transactions, a per-transaction account may suit you best. If you make a lot of transactions, a flat-fee package that covers all your banking will be more cost-effective.

• Do you tend to do your banking online or over the phone, or do you usually go to an ABM? Or are you “old school”, preferring to deal face-to-face with a teller? Self-serve options are typically less expensive than in-branch services for paying bills and transferring money between accounts.

Online tools can help you find the account that’s right for you.

For even more savings, consider consolidating all your accounts into one. Not only could you save on service fees, but you’re likely to find it easier to manage your money when it’s all in one place.

Student Tip: Heading to college or university this fall? Look for low- or no-fee accounts and service packages designed for students. These are ideal when you’re already managing the burden of school expenses and don’t want the hassle of maintaining a minimum balance.

Get more from your account

By following a few simple strategies, you can transform your bank account into the cornerstone of your financial affairs.

Put your money to work. A high-interest savings account can be an ideal complement to your day-to-day bank account. Use the high-interest account to park your cash while you decide on a suitable longer-term investment or to build short-term savings. Your money will be working harder for you, but still accessible if you need it. Just transfer funds between accounts by phone or online.

Go automatic. Setting up a preauthorized payment plan is easy, and it’s free. The amount you select is automatically withdrawn from your bank account and directed to an RSP or your high-interest account on a regular basis. Simply choose the schedule that works for you — for example, monthly or weekly.

Student tip: Automate your bill payments to ensure that your bills are paid on time. This saves on late charges, helps you build a good credit history, and allows you to focus on your studies.

Loyalty programs. Loyalty programs for credit cards have been around for a long time, but similar programs for debit cards are a more recent development. Do your research to find out what’s available.

Cardholder Tip: Coordinating your bank account with your debit card and credit card may help you earn more reward points faster.

These are just a few examples of how to get the most from your banking arrangements. Your advisor may be able to suggest other solutions that are unique to your circumstances.       

[Source: Scotiabank Vault]