I’ve been a personal finance writer for seven years and have gained valuable insights through my experiences. These insights are a result of conversations with industry experts, extensive research on banking products, and feedback from readers via email.
Here are five key lessons I’ve learned as a consumer banking writer:
1. The best bank accounts offer high interest rates, no fees, and unique perks
When looking for a new bank account, prioritize accounts with high interest rates, no monthly or minimum balance fees. These features help you maximize your earnings. Additionally, banks now offer creative perks like round-up savings programs and overdraft buffers, along with common features like early direct deposit and ATM fee reimbursements. Be sure to explore these added benefits when choosing an account.
2. Different accounts serve different purposes
Checking accounts are for immediate expenses, savings accounts help you earn interest while maintaining accessibility, and certificates of deposit (CDs) are great for long-term interest earning with limited access. Align your financial goals with the right account to make the most of your money.
3. Utilize high-yield savings accounts for emergency funds
Having an emergency fund is essential for financial security. Experts suggest saving three to six months’ worth of expenses. If that seems daunting, start with $1,000 in a high-yield savings account. This money should earn interest and be easily accessible for emergencies.
4. Banks offer options to avoid overdraft fees
Banks are working to reduce overdraft costs, and some now provide features like overdraft fee buffers. These buffers allow customers to temporarily overdraft their accounts without a fee, as long as they replenish the balance quickly. This can be a helpful feature for those facing financial challenges.
5. Research thoroughly before opening an account
Review the terms, fees, and interest rates of the account you’re considering. Look for any requirements or restrictions set by the bank. Check online reviews and consumer feedback to make an informed decision before opening an account.
The article 5 Things to Know About Banking, From a Banking Writer originally appeared on NerdWallet.
