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How To Optimize Your Banking 

Have a decent amount of money just sitting in your checking/savings account collecting no interest? Well, that was me, I had a stable emergency fund that seemingly stayed the same year after year. I was tired of getting no return on that money, but I also needed it accessible and with limited risk, so the stock market was out. I'm not telling you quickly go out and ditch your bank that you've been doing business with for years, but online banking has opened up the world of banking to new contenders that willing do do more to earn your business. Also, consider that I only use these accounts to manage my everyday funds and emergency funds. Anything excess I prefer to put into my retirement accounts. 

Here's what I look for in a bank account (note that some banks may have 1, none or all of these requirements)

 

  • High interest

  • No maintenance fees

  • No ATM fees

  • Good ACH transfers

  • No international fees

So here's the deal, none of my banks have all these qualities, but if you are able to manage your finances, you can create the ultimate banking solution with a combination of well selected banks. Some of these accounts do require some leg work, but if you think creatively you can automate many of these tasks. Also, these were the requirements at the time of writing, so they may are subject to change. Mint is my good friend for organizing my finances!

 

My current setup:

 

  • Lake Michigan Credit Union

    • Main benefit: Free account and generates 3% interest on up to $15,000

    • Drawbacks: Requires monthly Direct Deposit and a minimum of 10 atm card purchases per month, 10 online log ins and a Hard Credit Pull

 

  • Insight Card

    • Main benefit: 5% interest on up to $5,000. Use Pay as you Go Plan

    • Drawbacks: Requires activity every 90 days or a fee will be charged. Automate a transfer in or out every few months to avoid this fee. Be weary of other fees on this account, but it's fairly low maintenance for me.

 

  • Discover Savings

    • Main benefit: 0.95% APY on all amounts. I use this for any left over cash that I want to save. There are lots of options in the range, so find the one that you like best. There was an aggressive bonus offer when I signed up and I've kept it since.

    • Drawbacks: none that I have with this account. Low maintenance

 

  • Capital One 360

    • Main benefit: No fees, tons of free All Point ATMs. Good ACH transfers and works great internationally

    • Drawbacks: low APY

End Result: Building up your emergency fund can be daunting, but the results are satisfying. With just a little work you can easily create $700 a year on your savings. Setting it all up can be a bit of work, but create automatons and then you'll see the money roll in every quarter. Remember bank interests are taxable, so take that into account. These posts are meant to give you ideas, but remember to be on the hunt for the best deals. I went pretty hard at this in 2016 and spent a little more time on it than I'd like but was able to generate over $2000 with minimal investment. My current setup runs automatically now.