NerdWallet: 5 common banking mistakes that could be costing you

by | Dec 13, 2022 | Stock Market

This article is reprinted by permission from NerdWallet.  Sometimes, the mark of a good bank or bank account is that you don’t have to think about it too much: It works the way you need it to and provides the services and rates you want without costing you much, if anything. But it’s a financially healthy practice to periodically assess where and how you keep your funds. Here are five common banking mistakes that you might not realize you’re making.

1. Using only a checking account If you have a checking account, you should also have a savings account. It’s important to keep those funds separate so you don’t inadvertently spend funds you’re trying to save for emergencies or bigger purchases, which is easy to do when all your cash is lumped together. Plus, most checking accounts don’t pay interest. The ones that do generally offer much lower rates than the best free savings accounts or require jumping through hoops to earn a good annual percentage yield. The best savings accounts pay around 3% right now. Compare that with the national average rates as of November 2022 — 0.04% APY for interest checking accounts and 0.24% APY for savings accounts — according to the Federal Deposit Insurance Corp. Not sure how much to keep where? Get a better idea of how much cash to keep in your checking vs. savings account by tracking your living expenses for a month. Ideally, keep enough to cover a couple of months’ expenses plus a bit of a buffer in your checking account, and aim to keep three to six months’ worth of expenses in savings. Plus: It’s open-enrollment season. Sho …

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