The majority of us have at least one bank account, but are we making the best use of our banking? Since the introduction of online banking and text banking, and with contactless bank cards set to revolutionise the way we pay in 2010, even the most low-maintenance of bank customers can find some extra benefit. Here are some quick tips to help you get the most from your bank.
Get text banking set up
Do you know how much is in your bank account right now? Have you ever had to take a trip to a cash point to check whether you have been paid? Text banking, now offered by most of the high-street banks, really helps to keep you aware of what is going on in your account.
Sign up either for alerts either whenever a transaction is processed, or for a weekly 'digest' of all your transaction, and you'll be able to see in an instant if there is anything that you do not recognise or if you are low on funds.
Use your direct debits and standing orders
If you're still paying off your credit cards or paying your phone and utility bills by cheque or by card over the phone, you are giving yourself unnecessary hassle. Setting up a direct debit (a varying monthly payment) or standing order (a fixed monthly payment) for each service provider to whom you owe money would enable you to pay your bills at a scheduled time, with no danger of you forgetting to make the payment or leaving it too late and incurring a fine.
Depending on when you set up your phone contract or opened a credit card account, you may find that your bills are due towards the end of the month. If like the majority of folk in full-time employment, you are paid on the last working day of the month, you may then struggle to pay bills on the cash that you have left. Instead, set up direct debits or standing orders to go out as soon as you are paid. This leaves you in no doubt about the funds that you have left to spend, and means that you can therefore budget for the month much more effectively.
Use your overdraft facility
So you have no overdraft facility agreed with your bank, and yet you regularly spend money on a credit card? If this is the case, you're probably paying far more money in interest than you need to be. Banks have recently come under fire for expensive charges on unauthorised overdrafts, but if you agree a limit with your bank and stick within it, you can enjoy a much lower rate of interest than you would on a credit card.
Put your spare cash in a savings account
If you have leftover money at the end of the month, don't just leave it to build up in your current account. Current accounts are not designed to offer a competitive rate of interest, so you could be losing out on extra cash by keeping it where it is. You have a number of more profitable options available; either put the money into a savings account (instant-access savings accounts would enable you to take it back out whenever you need), or lock it away in an Individual Savings Account (ISA) where any interest you earn would be tax-free.
If you want to introduce an element of risk and reward into your savings, you could also choose to invest the money or buy some premium bonds. Just don't leave the money in your current account, make it work for you instead - and if you do plan to invest in stocks and shares, always seek professional advice first.
Link your bank account to your mortgage
If you have savings already and are paying off a mortgage with your bank, look into whether you would be better off moving to an offset mortgage. This type of mortgage allows you to enjoy a lower rate of interest on your repayments by counterbalancing your debts against your savings. If you have money saved in the bank, have a chat in-branch or look online for available offset mortgage deals that may save you a bit of money each month.
Alternatively, you can request a callback from a qualified adviser within the SimplyFinance network for a free, no-obligation quote for an offset mortgage by filling out this short form.
Don't pay for extras you don't use
Many people took out a student bank account whilst at college or university and forgot to change over to a standard account after leaving. This means that you may have automatically have been switched to a graduate account offering extra services, such as breakdown cover or mobile phone cover. If these are services that you do not need - either through not owning a phone/car or through having the cover elsewhere already, you may be paying a monthly fee for thing that you are not using. Think carefully about whether you actually need the extras on your account, and if not, swap to a free or a cheaper one and spend the money on something you are actually going to use.
Financial advice on your doorstep!
Don't forget that there are a number of qualified financial advisers in your bank's local branch that you can make an appointment with, if you are in need of some help with managing your money. Admittedly, they will only be able to offer you a limited range of financial products, and you need to be careful not to be talked into products that you don't feel you need. However, if you are looking for help with your budgeting, or you would like more information about ways for saving or investing your cash, make use of your bank manager's knowledge and experience.