Most people believe that they are saving money by putting it in the bank. What they don’t realize is that banks come up with all kinds of ways to separate you from your money and enhance their bottom line. With all the different regulations and fees on a bank account, some people even end up paying the bank money, instead of earning a return on a savings account. This is part one of a series of banking advice that should be taken into consideration when looking for a place to store your hard earned money:

Move the money you don’t need into a high yield savings or CD account (or even a checkings account). If you are keeping an emergency fund in a savings account at a regular brick and mortar bank, chances are it’s not earning a very high interest rate. Online banks usually offer much higher interest and CD rates than regular ones. If it’s money you won’t be needing, put it into a Certificate of Deposit (CD) account. If it’s money that you might need, put it into a high yield savings or checking account. The only drawback to these online accounts is that it takes a few business days to transfer between your regular and online banks.

Find a bank that offers free ATM withdrawals. ATM fees can quickly eat up a lot of your money. If you use an ATM regularly and pay a charge, it’s time to change banks. Banks usually offer free ATM access at their own locations, so find a branch close to you and make the switch. Credit Unions are also a good candidate, as they tend to offer higher rates than normal banks. However, their ATM network will probably be restricted to the local area.

Consolidate your accounts into fewer banks. If you have many accounts at different institutions, it can make financial sense to consolidate them at one or two banks. Using a single bank for all your accounts can give you leverage to get discounted services. For example, if a bank requires a $1,000 minimum balance to earn interest in a checking account, it might waive this minimum if you also have a large CD deposit with that bank. The more banking business you do, the more leverage you’re likely to have to negotiate on little fees and rates that can add up over time.

That’s it for today’s banking advice. Thanks for dropping by The Piggy Banker!