7 Ways to Make the Most of Your Online Banking Tools
Online banking has changed the process of personal banking. The old-school way was to balance your checkbook by hand and pay bills in person. Online banking empowers you to manage your finances quickly and efficiently, from almost any location.
Discover a list of strategies you can leverage to maximize your financial wellness through online banking:
1) Open the bank account that best suits your needs
Successful online banking begins with the right account. You’ll need a checking account and a savings account. Look over the terms of each account option to help you choose the best fit.
- The right checking account option will have low (or no) annual/monthly fees and an easily attainable minimum balance. Choose a checking account without charges or limitations on individual transactions, as you’ll be using this account frequently.
- The ideal savings account will pay you interest on the funds you deposit. This interest is usually referred to as the Annual Percentage Yield, or APY. The current average APY for a basic savings account is .07%, so look for an account that pays at least that amount.
2) Set up your online bank account
After you’ve opened your bank account, visit the bank’s website to enroll in online banking. You’ll likely need your account number, your date of birth, and some form of personal identification, like your social security number.
To protect your account, choose a highly secure username and password. Pick something you don’t use for any other online logins, and include a combination of numbers and symbols to make it harder to guess.
If your bank has a mobile app, download it. This will simplify online banking on-the-go, since the app will be formatted to work well on your mobile device.
3) Set up direct deposit with online banking
Most employers provide the option to have your paycheck deposited electronically into your account. Doing so will mean you get your funds faster, and you won’t have to make a trip to the bank every time you get paid.
Opt-out of paper statements
With online access to your account status and transaction history, you probably won’t find paper statements to be useful. Give planet Earth a hand (and save yourself a trip to the recycling bin) by opting out of paper statements.
Use online bill pay
Online bill pay is the most important feature of online banking for a couple of reasons:
- First, online bill pay saves time by automating your regular payments, such as utilities, mortgage payments, phone bills, etc. Rather than visiting websites to login and pay, or mailing checks, you can have these expenses automatically transferred each billing cycle.
- Secondly, automated billing contributes to your overall financial wellness. If you forget to pay a bill, or fail to pay it on time, you risk late payment fees and even a negative item on your credit report. One little missed bill can turn into a HUGE headache. Automated billing keeps you on track.
Link a budgeting app
Another awesome way to use online banking to build a healthy money management strategy is to link a budgeting app that helps you track your expenses. Services like Mint sync with your online bank account to automatically categorize your spending.
Having a good grasp of where your money is going can help you decide which areas of spending need some attention. For example, if you’re spending a significant amount of money eating out at restaurants every month, you can try eating at home more and transferring some money into your savings account instead.
Budgeting is the most important tool in your financial wellness toolbox, and online banking makes it easier than ever to get control over your spending and saving habits.
4) Automate your savings with online banking
Along with using automated billing each month, you should automatically pay yourself. Scheduling a transfer from your checking account to your savings account takes the work out of saving money. You’ll be surprised how fast your funds grow! Schedule the transfer to take place at the same time that your paycheck is deposited, so that saving money becomes a regular part of your financial life.
Online banking is not only convenient, it’s a great way to build a strong foundation for smart money management skills. If you have any questions, it’s always a good idea to check in with a trusted advisor from your local bank. We'd love to help you achieve financial wellness!