BY ANGELA WU
LearnVest
Remember the good old days, when all you had to do was slip your allowance into a piggybank? Sad to say, your bank is a lot more complicated than that now, though last time we checked, piggybanks don’t pay interest or extend loans.
You interact with your bank every time you deposit a check or get money from the ATM, so you may think you’re familiar with how it works. But don’t think that’s all you need to know. To make sure you get the most of out of your bank accounts, we’ve put together a list of banking mistakes to steer clear of, with tips on how to avoid them and how to get out of the problem if you’ve already gotten into it.
1. Keeping Your Checking and Savings Accounts at the Same Bank
• What we mean: You should choose one bank for checking, and another for your savings accounts.
• Why not: It’s tempting to use your savings for everyday expenses or even your rent. If you keep your savings at a separate bank, the additional time it takes to transfer cash from one bank to another will make you think twice about tapping your rainy-day funds. (Just don’t make it so hard you won’t be able to access the money in an emergency!) Splitting up your accounts will also let you get the best checking account and the best savings account for you.
• How to avoid it: When opening checking and savings accounts, open them at different banks. When choosing your checking account, consider fees and services you need day-to-day, like a wide network of ATMs. For savings accounts, look for the highest interest rate you can get, and make sure you can set up subaccounts for specific savings goals so you don’t accidentally diminish your emergency fund for a one-week trip.
• Already made this mistake? Easy. Close your checking or savings account at your current bank and open the same type of account at another bank. If your current bank has a great checking account but a less than optimal savings account, move the savings account. And vice versa.
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