Banking Expert: 8 Ways To Use Your Bank’s Products & Services To Build and Protect Wealth
Bank staff can also educate you on the institution’s financial products and recommend those that best align with your goals and preferences.
“Many times, consumers [select] the wrong banking product, paying unnecessary fees or interest on loans and not getting the highest interest on their savings. Your bank can give you insight on how to better manage your money,” Williams said.
4. Save for Retirement
On top of retirement planning services, your bank may offer products to help you save for your golden years. For instance, an individual retirement account (IRA) could be a great addition to your investment portfolio.
An IRA builds wealth while providing tax advantages. You fund a Roth IRA with post-tax dollars and then can withdraw the money tax-free in retirement, assuming you’ve had the account for at least five years. A traditional IRA is the opposite: funded with pre-tax dollars and taxed upon withdrawal.
5. Take Advantage of Rewards Programs and Other Benefits
You have lots of options when it comes to where to store your money, so many banks have introduced rewards programs to attract and retain customers. For example, your financial institution may offer cash back when you shop with your bank-issued debit or credit card. Using your debit card to cover $10,000 worth of purchases at 1% cash back puts $100 in your pocket.
Your bank may also make it easy to grow your savings account balance.
According to Williams, some “banks provide great products for savings, including ‘keep-the-change’ programs that allow you to save as you spend by automatically moving your change into a savings account.”
For example, if you use your debit card to buy your $3.50 morning coffee every workday, a keep-the-change program would boost your savings account by around $10 monthly.
While bank-issued rewards probably won’t make you rich, they will add up over time. Plus, if you invest your earnings, they can have an even more significant impact on your bottom line.
6. Expand Your Financial Literacy
Want to learn more about money management? Your bank may offer several educational resources, such as:
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Blog posts, podcast episodes and videos about topics ranging from budgeting to investing
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Online calculators to help you understand loan costs, time to pay off debt and more
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Free events led by financial professionals that go deeper than the online content
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One-on-one meetings with bank representatives for personalized guidance.
Visit your bank’s website to get started.
7. Borrow Strategically
Your bank likely lends money through many financial products, such as credit cards, personal loans and mortgages.
Williams said, “The most important bank product to build wealth is a home loan. Homeownership is where the majority of Americans accumulate wealth over time. [Plus,] given the recent Federal Reserve [rate cuts], home mortgages have become more affordable.”
As an added perk, your bank may offer you a better interest rate simply for being a customer. Even a small rate reduction could save you tens of thousands over the life of the mortgage.
8. Get Insured
According to Williams, life insurance is a “necessary product to build generational wealth.”
A term life policy pays out a death benefit to your heirs should you pass away during the covered period — generally up to 30 years. Your beneficiaries could use the money to cover your funeral expenses, pay off the mortgage on the family home, fund a college education or take care of anything else they need.
A whole life policy, while more expensive, builds cash value and pays out a death benefit. It remains in effect as long as you pay the premium. Depending on your situation and budget, obtaining this type of policy could be a good way to protect your family’s wealth.
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This article originally appeared on GOBankingRates.com: Banking Expert: 8 Ways To Use Your Bank’s Products & Services To Build and Protect Wealth
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