Discover 5 ways to take advantages of banks.

If I ask you What is the way to growing money?
You may Savings or Investing (most of you).

If you are earning, you have to incur a lot of expenses which might hinder your game of savings.

But; What If I tell you you can benefit from the bank account (I’m sure you have at least one).

Throughout the post you will see lot of tiny details that can help you understand

  • how you can take advantages of banks?
  • how can subtle tweaks earn you more interest?

So without further ado, let’s start our today’s post on how you can benefit from banks?

A small introduction to post

Banks love young people because we’re new to banking and they think we don’t understand their game.

Their moves like overdraft protection and monthly fees are to make you wanna quit the game before you even understand to take benefit from bank.

Banks don’t know that you are a reader of that means you’re different from any ordinary human beings.

By the end of this post you will know how you can benefit from bank, I promise.

Shall we get started!

Let’s go.

Advantages of Banks (Bank’s point of view)

To put simply, banks earns money by lending the money you deposit to other people.

For Example – If you deposit rs70,000, a big bank will pay you 0.5% to hold onto that money and they will lend it out on 7% for home loan.

Banks also not always in a favourable position.

Assuming that everyone repays the full amount they’re loaned, the bank makes a fourteen-times return on their money for simple arbitrage.

(To be fair, banks don’t get 100 per cent of their principal plus interest back, so they do incur some risk and should be compensated accordingly).

But fourteen times is a lot of money.

Few beginner’s mistakes

if you’re using a debit card and accidentally buy something for more money than you have in your checking account, you’d expect your bank to decline the charge, right?

Nope. They’ll let the transaction go through, and then they’ll helpfully charge you around $30 for an overdraft fee.

Even worse, banks can charge you multiple overdraft fees in one day, leading to worse scenario of more than $100 in fees levied in a single day.

Overdraft fee - how you can benefit from banks
Overdraft fees can wipe out all your yearly interest

But there are some positives! Some banks are nice enough to charge you only $20 for the first overdraft (but $35 for each subsequent overdraft). Isn’t it something you are looking for?

Again this is one of their tactics to make a profit at expense of you.

How you can take advantages of banks overdraft?

One overdraft fee can wipe out all of your interest earned.

Most the people have been the victim of at least one overdraft in their lifetime.

Remember, your bank’s fees are often more important than the interest rate it offers: If you have $1,000 and another bank has a 1 percent higher interest rate, that’s a difference of $10 per year.

Just one overdraft fee equals three times that amount. Costs matter.

To tackle this problem you can open an online bank account to take benefit from the bank account.

Which you will see in next section.

Online banks – Advantages of banks

I’m going to admit my bias upfront: I’m a big fan of online banks like Paytm because they offer simple banking with great rewards and almost no downsides.

Most important, they don’t try to intimidate you with fee after fee.

These online banks have realized that by eliminating overhead, they can offer dramatically higher interest rates and better customer service than the traditional Big Banks.

Online banks have no branches and no tellers and spend very little on marketing, which allows them to accept lower profit margins than conventional banks.

That saving is passed on to you as lower fees and higher interest rates. I also find that some online banks suggest you to open account in another bank after an account surpasses a certain limit.

Advantages of banks online
Advantages of banks – online banks

Man, it takes some spunk to tell your highest rollers to take a walk!

This is the opposite of traditional banks, who love to up-sell products to their high-balance customers.

The result is that online high-interest savings accounts offer interest rates about six to ten times higher than you’d get at your traditional bank.

That’s right: For the first time in history, you can actually make a decent return by simply parking your money in an online savings account.

Try to get your parents to open one of these high-interest accounts.

Online banks are scary for older people, especially after a few big banks failed during the credit crisis.

Fortunately, you and I are comfortable doing business online, so we can take advantage of the higher interest rates and ultimately take advantages of banks

Basics you need to know to get optimum benefit from the bank

(a) Checking Accounts

As you know, checking accounts let you deposit money and withdraw money using debit cards, checks, and online transfers.

All money goes into it and accodingly you have to filter it out to appropriate accounts, like savings and investing, using automatic transfers.

Traditionally, banks paid no interest on checking accounts, but this is changing.

Most online banks now offer checking accounts with interest, blurring the line between checking and savings accounts and thus freeing up way to take advantages of banks.

Checking accounts are the number one place where unnecessary fees are levied, which we’re going to fix.

(b) Savings Accounts

Think of savings accounts as places for short-term (one month) to midterm savings (five years).

You want to use your savings account to save up for things like a vacation, Christmas gifts, or even longer-term items like a wedding or down payment on a house.

Checking accounts are built for frequent withdrawals: They have debit cards and ATMs for your convenience.

The key difference between checking accounts and savings account is this: Savings accounts pay interest (although, as we saw, the lines are being blurred with new interest-bearing checking accounts).

Typically, Big Banks paid about 0.5 percent interest on savings accounts, meaning that if you put $1,000 in a savings account, you’d earn $0.41 in monthly interest, or $5 per year.

That’s right: You may be earning 0.5 percent interest on your savings account, but you’re losing 2.5 percent every year in terms of real purchasing power.

If you are enjoying this far, then this post on the financial market can be a good read.

The most important practical difference between checking accounts and savings accounts is that you withdraw money regularly from your checking account—but you rarely withdraw from your savings account (or at least that’s the way it should be).

DIfference between Savings and Checking account

Your savings account is really a “goals” account, where every dollar is assigned to a specific item you’re saving up for.

Most people keep their savings account and checking account at the same bank, although this is increasingly changing as electronic transfers become the industry standard.

In fact, with electronic transfers and online banks, options have gotten considerably better for consumers.

Online banks pay a higher interest rate for savings accounts—about 2.5 to 5 percent, which would produce $25 to $50 interest per year on that $1,000, compared with $5 per year on the Big Bank savings account.

And as with any savings account, your money just keeps growing and compounding, meaning it is working for you by just sitting there and this way you can benefit from the bank.

There is one downside to having an online savings account: It can take a few business days to access your money.

Typically, if you want to withdraw your money, you’ll log in to your online savings account, initiate a free transfer to your checking account, and then wait three to five days for it to happen.

If you need your money immediately, this could cause a problem—but then again, you shouldn’t be withdrawing very frequently from your savings account, so most likely this won’t be a big issue.

Perfect account set up for taking advantages of banks

For most people the basic set up is good enough.

Although there is one advanced set up also. But its for those people who wants to extract every benefit like rewards and introductory offers.

In case, you want to know that, you can refer to below.

But sticking to but best here is simple set up: Basic option + small optimization (recommended for most people).

Basic option + small optimization (recommended for most people).

This option means opening accounts at two separate institutions: a no-fee checking account at your local bank and a high-yield online savings account.

With the checking account, you’ll have immediate access to your money and the ability to transfer cash to your highinterest online savings account for free.

If you already have this, great!

You can find a wonderful post on the same topic on

Just call to make sure you’re not paying unnecessary fees and take advantages of banks.

(Note: Most online banks require you to have a brick-and-mortar bank, so don’t close your old account before checking with your online bank.)

Snake oil salesman tactics used by banks

(A) Teaser rates (“6 percent for the first two months!”). Your first two months don’t matter.

You want to pick a good bank that you can stick with for years—one that offers overall great service, not a promo rate that will earn you only $25 (or, more likely, $3).

Banks that offer teaser rates are, by definition, to be avoided.

(B) Requiring minimum balances to get “free” services like checking and bill paying.

(C) Up-sells to expensive accounts (“Expedited customer service! Wow!”). Most of these “value-added accounts” are designed to charge you for worthless services.

(D) Holding out by telling you that the no-fee, no-minimum accounts aren’t available anymore. They are. Banks will resist giving you a no-fee, no-minimum account at first, but if you’re firm, they’ll give you the account you want. If they don’t, threaten to go to another bank. If they still don’t, walk out and find one that will. There are many, many choices and it’s a buyer’s market.

(E) Bundling a credit card with your bank account. If you didn’t walk in specifically wanting the bank credit card, don’t get it.

In order to take advantages of banks, you should be aware of the above tactics and work smartly.


There is a reason I didn’t state all 5 ways in one section because I wanted you to read the post.

Now if you made this far, I would like to some time of you and say a very generous thanks to you.

However following are the 5 ways to take advantages of banks:-

  • Set automatic payments so never meat overdrafts fees.
  • Open an online bank account which offers high interest.
  • Open two separate accounts :
    • 1. Checking Account
    • 2. Savings Account
  • Choose a bank which offers some rewards that are aligned with your interests.
  • Talk with your bank to get fees waived

Avoid chasing every shiny offer like minimum balance and reward which of no value.

I hope that today you came across some good stuff.

If you like my work, please comment and since I am not earning through my blog.

It would be great if you can support me.

You can donate some money to help me doing this. Below is the

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Thanks for spending your valuable time with Financebread

Take Care and Be Healthy

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