If you have been with the same bank using the same style of account for many years now might be a good time to review your banking strategy.
Start by assessing which bank or banks have the services you require at the best price and access. Gone are the days when it was necessary to stay with a bank for life to get better service. Banks are keen to get your business and compete by offering lower fee options; which due to ongoing competition, are continually reviewed to attract more customers.
The Power of Two
Many people have found The Power of Two to be a useful method to employ when managing their bank accounts.
This simply means that you have two accounts for savings and transactions, not one. Firstly, you arrange an everyday working account that has the features important to you – card, cheque, Internet access, statement, competitive fees, etc. Then you set up a separate low cost, interest-earning account in which to keep the bulk of your cash.
This is where “virtual banking” becomes an attractive option. Many online savings accounts offer a similar interest rate to term deposits but with the added attraction of being able to access your money immediately or within 24 hours. And if you choose the right one, there are no bank fees. These accounts are simple but you can generally only access them via the Internet or phone. They don’t offer cheque books or credit cards and are not set up for transactional banking, which helps to keep costs down so they can pass on higher interest rates.
When your everyday working account is running low on funds, you merely transfer money (by phone or Internet) from your interest-bearing account into your working account. Hence, you get the best of both worlds – flexibility and more interest!
If you continue to operate as you did in the past you will end up paying out more in fees and charges. The Power of Two is a simple way to take greater control over your money.
At first it might seem like a hassle to change banks, but when you look at the long-term benefits from paying lower fees or having better access to your money, it could just be worth a few hours of your time.
Our accountants are here to help!
Call (02) 4926 2300 or email us.
Banking is a large part of everyone’s life. If you wish to discuss your banking strategy please contact the team here at Leenane Templeton.