You work hard for your money and while you deserve to enjoy spending it, you also deserve to see it grow. So yes, you can buy those cute spring flats you don’t actually need (um, define need, please)—as long as you’ve got at least some of your money making money. To make this happen, all you have to do is a little bit of research. And it’s not as hard or as scary as you think. Just follow these easy-to-follow tips from Oaken Financial and you’ll be on your way to saving, so that you can hit the mall even more often.
10 Banking Dos and Don’ts to Help Grow Your Bank Account
1. READ THE FINE PRINT Don’t make your banking decisions based on the promise of a free iPad. Product offers or cash bonuses might sound appealing, but they usually result in hidden fees for several months or longer. Before you accept a promo, make sure you read the fine print. Is it worth the hassle? If you do sign on, watch for key dates when you can change your mind and leave if that is what you want to do.
2. GO FREE OF FEES Do look for bank accounts without fees. Fees aren’t a given! In fact, there are savings accounts available that won’t cost you a penny, and allow you to make as many transactions as you like, for free.
3. LOOK AHEAD Do know when you’ll need to access your money. Should you go with a savings account or a GIC? A savings account allows you access to your money whenever you need it. Investing your savings in a GIC means your money is locked up for a set term, but the principal and interest rate are guaranteed.
4. GET SAVING Do focus on a savings account. Those in their 30s and 40s can afford to take a bit of risk with their nest egg. So, it may not make sense to park your money in GICs. Instead, holding short term savings or a rainy day fund in a savings account that can get you a higher interest rate gives you access to your money when you need it.
5. STASH AWAY Do consider the tax advantages of putting money into a TFSA or RSP. You may be focused on paying off your home, but don’t forget that if you put a chunk of money in your TFSA or RSP, you could end up with more money in the long run.
6. GO WITH MORE Do consider setting up a high interest savings account at an institution other than the big 5 banks. Why not set up a savings account elsewhere—perhaps for your emergency fund, saving for your next vacation, or for that new car? While there was a time when it made sense to keep all your accounts in one place, online banking and electronic fund transfers mean you can monitor and move money instantly. You may be able to take advantage of some great banking options out there.
7. LOOK AROUND Don’t forget that some of the newer bank and trust companies offer compelling alternatives. In Canada, all banks and trust companies, even the smaller ones, are regulated by the Office of Superintendent of Financial Institutions (OSFI) and subject to the same stringent regulations. Plus, any institution that’s a member of CDIC will offer the exact same insurance coverage that’s available through the big 5 banks.
8. MAKE THE SWITCH Don’t be afraid to make the switch. Even though it may seem like a hassle, sometimes switching to a bank that offers you excellent service, higher interest rates, and peace of mind that you can count on, is more than worth it in the long run.
9. ASK QUESTIONS Do understand what they charge to move your money. Before you invest your money with a financial institution, find out if they’ll charge you to move your money around, change accounts, or buy into a savings vehicle with a higher interest rate. Many Canadians are caught off guard by these fees when they want to move their registered investments such as RSPs, TFSAs or RIFs to another financial institution in order to get a better rate.
10. SPREAD THE WEALTH Don’t put all your eggs in one basket. If you’re looking to buy a house, don’t sink all your savings into it. Diversify your portfolio, and set aside some of your money in savings accounts that won’t ride the ups and downs of the housing market—even if that means buying a smaller home.
Oaken Financial launched in 2013 to offer Canadians a competitive alternative to manage their savings independently, featuring some of the highest GIC rates available with no monthly fees. Check them out for more info, news and tips.