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Banking Tips - Make the Most of Your Money

If the principle behind getting rich slowly could be summarized in two words, they would be these: save money. And what better way is there to save money than to put it in a bank account? When used wisely, bank accounts can help your money grow. When used foolishly, they can drain your finances. Here are some tips for putting your money to work by putting it in the bank.

Banking Tip #1: Choose a Good Savings Account

Gone are the days when grandpas used to bury mason jars full of pennies all across their back yards. Now, we can use banks to keep our money safe and secure. And unlike Grandpa's stagnant coins, the money you put into a savings account will earn interest. How much interest? The average is between 2% and 4% annually, with compounded interest.

Banking Tip #2: Don't Let Checking Account Fees Eat Your Money

It's discouraging to put your hard-earned money into an account, only to watch it dwindle because of ATM fees, debit fees, monthly use fees and other nickel-and-dime charges. Some banks charge you money at the drop of a hat. Others offer free checking, free ATM and debit card use, and no monthly payments. Check out several banks before you set up a checking account.

Also, ask about overdraft protection. Some banks offer it for free. If you ever write a check or make a debit when your account has insufficient funds, the bank will cover the transaction so that you don't end up owing bounced check fees to various merchants. But you will still be responsible for the bank's overdraft coverage fees, which can cost as much as $35 per transaction! Keep careful track of your purchases to avoid throwing your money away on these fees.

Banking Tip #3: Certificates of Deposit & Money Market Accounts

Depending on your goals, a savings account might not be your best option. For example, if you want a low-risk investment that returns a good amount of interest, check out Certificated of Deposit (CDs). The only drawback is that you have to commit your money for a designated length of time - typically three months to five years. The longer you leave your money in a CD, the better off you'll be when it's time to cash out. CDs are FDIC insured up to values of $100,000.

If you'd rather have quick access to your money, consider a money market checking account. These account return a higher rate of interest than regular savings accounts. Some banks require a minimum deposit to open money market accounts, and there are typically limits on the amount of withdrawals you can make each month. Speak to your bank for details.

Banks are a secure place to keep your money, and they offer services that help you make the most of your money. Go online to compare bank rates and find the best account for you.

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