Five ways your bank account can help you
Your bank account is more than just a place to park your money; it can be a useful tool in building your credit record, tracking spend, helping to manage your finances and even save on fees.
“By paying closer attention to your bank account you may be pleasantly surprised by what it can actually do for you,” says Ryan Prozesky, CEO of Value Banking Solutions at FNB.
Herewith five ways your bank account can help you.
Control your spend
Keeping your money under your mattress may be tempting, but not only is it insecure, there is also no record of where, when and what you have spent it on. Your bank account is the perfect audit trail as all money that goes into your account, or out of it, is recorded and kept for the lifetime of your account, making it easy to keep tabs on your income and expenses. Your bank account statements can also be used to help track and manage your monthly budget.
This is an even more efficient tool when you swipe your card for purchases rather than drawing and using cash, as each card swipe is recorded individually helping you keep track of where you spend your money. Some banks classify these merchants into categories, for example, groceries, fuel, entertainment which helps to create visibility on your spend and is useful when budgeting.
“Bank statements are a great way of keeping a record of all your expenses every month as the bank has to keep track of every cent that comes in and leaves your bank account,” says Prozesky. “This combined with card swipes will ensure you always on top of your finances. Make sure that your bank offers free card swipes.”
Another service that all banks offer is a notification service, such as FNB’s free inContact service. The bank will notify you every time you perform a transaction over a certain amount and an SMS is sent to your phone, which means that you can keep track of your expenses and your available balance on the fly.
Help your credit record
When people think of credit records they usually think of credit cards or store cards, but the way you use your bank account also contributes towards your credit score.
“A bank will look at your bank account behaviour when making credit decisions. Depositing your regular monthly income into your account as well as ensuring sufficient funds to meet your debit orders and fees will all help towards building a good credit record with your bank,” says Prozesky.
A good credit record is vital when applying for credit such as housing finance or a credit card and could go towards getting a lower interest rate.
Add value and give rewards
“Most bank accounts come with some type of value add or reward that incentivises customers to continue banking with them, as well as to bank in a cost effective manner,” says Prozesky. “Looking into and taking full advantage of these benefits is worth your while.”
FNB, for example, rewards its customers for banking electronically, with airtime or through its eBucks rewards programme and offers various value-adds such as buying airtime when you have no airtime, via cellphone banking or purchasing a smart device, interest free over 24 months.
“Make sure that the rewards system and value-adds really work for you and your lifestyle,” says Prozesky. “If you understand the rewards program and if you use your bank account cleverly and efficiently you will be able to not just save money, but could actually get back more than you pay in bank fees.”
Saving on the cost of cash
“While it might seem to make sense to withdraw cash from your account to make payments, it is not the best way to transact,” says Prozesky. “Not only is carrying around cash a problem from a safety point of view, you can also quickly rack up your bank fees if you are drawing cash frequently, and these fees can be especially high if you withdraw from another bank’s ATM.”
Most stores now have a Point-of-Sale machine which will allow you to swipe your card when you purchase goods in the store instead of paying with cash. One can also draw cash at these Point-of-Sale machines at select stores so you can now add your cash withdrawals to your shopping list. Drawing cash from store tills is often cheaper than using ATM and is even offered for free by some banks.
“If you need to withdraw money, rather do it for small items only, such as taxi fares and street vendors. For everything else, swipe,” advises Prozesky. “Swiping is cheaper and safer than using cash, allows you to keep better track of your spend and is even offered free by some banks, such as FNB.”
Use electronic and digital services
Finally, check to see what electronic or digital services your bank account offers. Banking electronically is more convenient, cheaper and can be done anywhere. Most transactions are far cheaper when using Cellphone or Online Banking, or one of the other digital options such depositing money at an ATM instead of inside the branch.
Even sending money has become easier with money services, such as FNB’s eWallet. Using your cellphone, you can now send money to anyone, even if they do not have a bank account thereby eliminating transport and service fees that you would incur if you went directly to a money sender.
“Regular services such as making a payment to a person or accessing an account statement are very cheap if not free when using electronic or digital services,” says Prozesky. “The reason it is so much cheaper is that everything in a banking branch from the building, the consultant and the computers cost money, therefore if you use Cellphone Banking, Online Banking or an ATM, you are saving the bank money and the bank is able pass these savings onto you.”