Choosing the right bank and making sure your money is in the right type of accounts can make a huge difference in your financial future. We’ve been amazed by how many little tricks can make a huge difference in our own finances and decided it warranted it’s own post.
PS – Please note that interest rates listed are what is currently offered at the time of publishing (October, 2019). These things vary with the market so it may fluctuate as things change. We love Magnify Money’s compare pages (e.g. savings accounts, checking accounts, mortgage loans) for current rates in your area.
For Checking Accounts
For checking accounts, consider online banks and credit unions. They often have much better rates and will reward you for using their services with high-interest benefits.
For example, this credit union will give you 4% a year in their checking account up to 30k and if you are married, you and your spouse can both have accounts. Just be mindful of any requirements you may need to complete to take advantage. This one requires that you have a monthly deposit of $500 and 8 debit card transactions. These are easy to set up and automate with things like direct deposits and automatic transactions like Amazon gift card automatic re-loads. Doctor of Credit has a great article about what each bank accepts as an ACH deposit. You can re-load your Amazon gift card balance from your checking account in increments a low amount like $.50 each.
The big banks are useful if you want to have ATM access to be able to get cash anywhere so it may be good to have a little money there as well. Just be mindful when you are traveling internationally what their fees might be to withdraw. A lot of the big banks are partnered with others internationally which can help cut down on the fees you’ll need to take out money while you travel. Some banks do offer to refund the fees you pay to other banks – one such example is USAA (you do have to be a member of the military or family member to get an account).
For Savings Accounts
Online banks have great rates and usually very low minimums for savings accounts. Because they don’t have to pay staff or operate brick and mortar stores, they save a ton on business costs and usually a little bit of that gets passed on to their customers in the form of high-interest accounts.
One of the cool things about setting up a savings account that has no minimum balance or other requirements is that it makes it really easy to set up sinking funds, one of our favorite ways to save for a big purchase.
Here’s a great article about high-interest accounts that compares which ones give the best rates currently.
For Retirement Accounts
Your current employer will probably dictate where you have your retirement accounts that you are currently contributing to. But you do have a choice when it comes to where you open a Roth IRA or where you might want to roll your funds over to when you leave a workplace. It’s a big personal choice and greatly depends on your own situation and your retirement strategy overall. It’s good to keep in mind factors like what fees will be charged and what options you have for which funds you can invest in. We like Vanguard and Wealthfront, but do your research and find out what’s best for you!
For Personal Investing
Similar to the above, this greatly depends on your strategy overall. If you are new to the game of investing, we like the robo-advisers like Wealthfront and Betterment. It’s a great way to get started without having to create a complicated strategy until you learn more. You can also use a tool like Personal Capital to help determine if you have the right allocation of cash vs. different kinds of investments.
For Credit Cards
We’ll start this section by saying, don’t use credit cards unless you plan to pay off your balance in full each month. Ok, great, now on to the perks!
We love using credit cards to earn points and cash in on perks like business class travel and magical perks like the Southwest Companion Pass. If travel is not your thing, there are a ton of cards out there that have great benefits for cashback.
We recommend searing clear of store-branded credit cards (the ones they try to sell you on at check out) and cards that are attached to a specific brand. It’s usually better to use credit cards that come with a big sign up bonus and have perks that can be used across multiple platforms. We love chase for this, their points can be transferred to tons of different partners and while you get the best redemption value by booking travel with points, there are tons of other ways to use their points as well.
For Mortgages
This is such a personal decision and will vary wildly from person to person based on your credit score, past experience with a bank, cost and a down payment of your home, whether you’re a first-time buyer, and so many more things. We highly advise chatting with multiple lenders and, if you have one, your financial advisor to help figure out the best rate for you. You’ll definitely want to shop around for this, too, as different lenders will be able to secure different rates for you (and you can usually use them as competition to lean on one that might offer you less). We like Nerd Wallet’s list of “questions to ask” to make sure you understand the fine print.
One tip we definitely stand by is to get preapproved for a loan before starting your house search. That way you’ll know exactly what your limit is and won’t even entertain the idea of a more expensive property.
Are there banks that you love or hate? Let us know where you stash your money and why in the comments!
PS – this post is part of our list of goals to write in 2019 – check out the full list here!