Banking Smart

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Some of the best and most sound financial advice one can get beyond traditional or alternative investing advice, is simply how you take care of your already gained wealth and finances. Understanding how banking works, can be the best way to maximize your savings and availability to use and grow your money in the safest ways possible. Read below to learn more about the smart ways to bank and store your money.

Banking Options


Banking smart doesn’t mean that you have to deal solely with a bank. Federal credit unions are also a nice compliment towards the banking industry, that help change up the way in which we do banking. Credit unions are non-profit institutions that like any non-profit, at the end of the year any profit that is made, get reinvested back into the members as well as the services that are offered. Traditionally, banks only insured their clients up to $100,000 dollars if the funds were stolen or victimized by fraud, and the credit unions insured their members up to $250,000 dollars for the same types of issues. But with the U.S. and global economy tanking since the mid 2000’s, the Federal government has increased the insurance on the money being stored and invested into the banks, also raising their limit to $250,000 dollars, effectively matching what the credit unions were doing all along. The key difference between the two, banks and the credit unions at this point in time, remains to be how the institutions themselves define their way of doing business. This means that the credit unions still are operating at a non-profit status, and the banks are operating as traditional institutions of business. So while the credit unions will reinvest any profit back into the members and the services rendered, a bank will take the profit at the end of the year and pay out dividends to the investor whom own shares to the bank. It is this particular difference that remains the clear cut line between both types of banking options, which can help you choose what kind of stake you will have in the institution you choose to do your banking with, and what kind of pay out you are looking for at the end of the year.

Better Rates

Banking Smart


Investing your money within the banks system doesn’t limit you solely to the traditional lines of a checking and savings account with that institution. Like any other financial institution, the services that can be rendered, can give you the best chance to make money using the depositing of that money. In essence, you can make money on your money, by using the rates provided by the institution. So let’s say you are investing $5000 dollars into a three month CD with your banking institution. In the most simplistic explanatory form, you are doing to the bank what your credit card company does to you. You are loaning your bank, or credit union, $5000 dollars for a three month period at the percentage rate agreed upon by the bank and yourself. The interest you make off of your deposit, guarantees you your money back in the three months, plus a profit. This is a safe and risk free way to invest your money, and have your money work for you!

Online Banks


When banking smart, it is important like any other investment to research your options and the reward that comes with the hard work as stated above can be better rates that can be paid out in dividends¬† into your wallet. But not all banks or credit unions have tangible locations. There are a few that don’t have branch locations but offer the same services and better rates for storing your money in. The rates actually are better when using online banks, because what the brand saves in not having to fund a branch location, they are more able to reinvest back into the members and the services. The downside is that it may take a couple of days for your deposits to clear, as well as you might not have immediate or quick access to your money. But the down side isn’t always a downside. If you are looking to save more money, then perhaps an online account with either a credit union or bank is what you are looking for. The often distant access to the money in that account will make it less likely for you to constantly tap it, and often will hold a high interest rate attached to your account.

Banking smart is less of an acquired act and more of a way of life, or at least it can be. If you’re looking for a way to save more money, or invest your money in an institution you can trust; understanding how the banking industry works and can best work for you is key to your line of succession.

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