This is a guest post from freelance writer Jessica Ward.
For three years, I’ve been patting myself on the back. The household expenses remain the same every month, and we’re getting out of debt. In spite of increases in costs, we’ve found efficiencies and made room. But, as they say, after pride comes the fall. I discovered this month that we’re actually making less progress every month now than when we first started making monthly budgets!
Initially I thought this was a short-term trend, but when I looked back a little farther in the old budgets file, I discovered that we’ve really been on this path since day one. We have succumbed to “lifestyle creep.” Subtle upticks in our family’s expenses that don’t necessarily fall into line with real costs of living.
Slowly and stealthily, our lifestyle has edged back up. An extra meal out here, a technology upgrade there, all unnoticed because we haven’t spent beyond our planned expense cap, but unchecked because we didn’t notice that we had slowed progress towards our goals.
Identifying Your Budget “Creepers”
We use a zero-based budget. Money in equals money out, every month. Sure it might go “out” into a savings account or towards debt, but the checking account ideally zeros out every month. I neglected the second step of allocating everything. By way of example, here are some expenses that crept up on us this year, virtually unnoticed:
Family gym membership, $1,200 year. (We did elect to keep it for 2012, but are making other cuts to accommodate.)
Data plan on my husband’s phone (he doesn’t even know how to text). We cut this in July, but not after spending $240 for the year on unnecessary data charges.
A digital camera upgrade (rationalized with the old “it’s a business write-off” excuse) at $400.
An average of $200 per month additional eating out expenses, or $2,400.
An average of an additional $200 per month in charitable expenses, or $2,400 a year.
All told, we experienced an increase in lifestyle (and decrease in goal progress) of nearly $7,000. Had we minded our budget better, we’d be out of debt by now. That’s embarrassing.
Other people will have other areas of budget creep. Fancy coffee, storage unit, unnecessary gadget upgrades. Little upgrades like premium cable can be adding hundreds to your household expenses every year.
How to Creep-Proof Your Budget
If you’re feeling the budget creep, take the following steps to get back on track.
Set your budget, including all expenses, by prioritizing your household bills and financial goals, treating them just like a bill.
Revisit your budget and revise based on actual changes in costs. While our spending remained fixed, some expenses (fuel, food, and homeowner’s association dues) went up, and we sacrificed about $200 per month towards financial goals by not revising our spending (and income) expectations upwards or another area of the budget downwards (without sacrificing your progress to goals). When costs go up, it’s time to ramp up the “side hustle” income.
Maintain your diligence about buying bargains. Have you relaxed your efforts at coupons, sales, used/consignment, bargaining or trading? Have you even stopped price-comparing? Just because it’s in the budget, doesn’t mean you shouldn’t try to get a better deal.
Have old habits crept back? Extravagant gifts, daily lattes, extra vacations, and weekend getaways, or just too much eating out? Many of us have old financial habits that break our budgets. Keep a wary eye out for them.
Please, tell me I’m not alone in this budget faux pas? Has your budget suffered from creep?
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Do you want to make your money work for you?
I know what you’re thinking—money doesn’t grow on trees.
It takes money to make money.
That is a true case, but it doesn’t mean you have to be a millionaire to start. You can invest $100 to make $1000.
But there are a few things that will help any of us start seeing some green: time, patience, and perseverance.
We all know that money is a powerful tool. It helps us get what we want, live the way we want to, and achieve our goals. But how do you make your money work for you?
If you’re new to financial success or are looking for some fresh ideas on increasing your wealth, then you are in the right place!
That’s where this post comes in! In it, we delve into the five best ways to grow your wealth and show you how they work.
How can you make your money work for you?
There are many ways to grow your wealth. You can invest in stocks, bonds, and other securities. You can also start your own business or invest in real estate. Whatever you choose to do, make sure you are diversified and have a plan.
Making your money work for you is all about creating passive income streams.
This means finding ways to make money without having to actively work for it. Some examples include investing in stocks, real estate, and businesses.
How to Make Your Money Work for You: The [Best Ways] to Grow Your Wealth.
Your money is a powerful tool that can help you save, invest and grow your wealth, but only when you know the ways to make it work for you.
This is something that many people don’t learn and don’t invest the time to understand.
The best way to grow wealth is by taking your time and doing the research necessary for you to understand what it takes. You have to know how much money you need, where it will come from, and how you will invest it.
#1 – Create Financial Goals
It’s important to have specific financial goals because they give you something to work towards and help keep you motivated. Having specific goals also makes it easier to measure your progress and see how far you’ve come.
To create specific financial goals, start by thinking about what you want to achieve.
Do you want to save for a down payment on a house?
Are you looking to pay off debt?
Looking to increase your saving percentage?
Or do you want to retire early?
Once you know what your goal is, break it down into smaller steps that you can take to get there. For example, if your goal is to save for a down payment on a house, your first step might be saving $2000 for a down payment fund. Then, once you have that saved up, your next step might be saving $1,000 for the down payment fund.
Keep breaking your goal down into smaller and smaller steps until it feels achievable.
When setting financial goals, avoid setting goals that are too vague or unrealistic. For example, don’t set a goal of “saving money” without specifying an amount or timeline. Also, avoid setting goals that are so small they’re not worth achieving (like saving $5 over the course of a year).
#2 – Develop Passive Income Streams
Passive income is a type of earnings that does not require active work to generate. This can include earnings from investments, rental properties, and other business ventures in which you are not actively involved.
There are several different types of passive income:
Interest and dividends from investments: This can include earnings from stocks, bonds, and other investment vehicles.
Rental income: This can come from renting out a property you own, such as an apartment or vacation home.
Business income: This can come from owning a business in which you are not actively involved in the day-to-day operations. For example, you could own a franchise or be a money-only investor.
Royalty payments: These are payments made to you for the use of your intellectual property, such as patents, copyrights, or trademarks, a book, or a song.
Other types of passive income include blog or affiliate revenue. For example, if you have a blog and it generates ad revenue or affiliate income from referrals to third-party products, that would be considered passive income.
Passive income is money you earn without having to work directly for it. It can come from any number of sources. Remember, passive income is different than active income, which is money you earn through a job or business ownership.
In fact, most millionaires have at least 3 passive income streams (source).
Passive income is the Holy Grail for online marketers. It’s automatic. Effortless. But, not at first. In the beginning, it’s grueling. I liken this to doing the most amount of work for the least initial return. However, over time as your passive income begins to increase, your reliance on an active income plummets.
That’s when the real magic starts to happen.
#3 – Plan for Each Dollar
The first step to making your money work for you is creating a budget. This will help you track your income and expenses so you can see where your money is going. You can use a budgeting app or spreadsheet to do this.
When it comes to managing your finances, it’s important to have a plan for each dollar that comes in. You should make conscious choices about where to spend your money and what type of accounts to use.
Your highest priorities should be determined by what is most important to you.
It is also important to remember that every penny counts- so use your money wisely!
#4 Pay Yourself First
One of the best ways to grow your wealth is to save first. This means putting away money into savings or investments before you spend it. This will help you reach your financial goals more quickly.
When you get paid, make sure to put some money into savings or investments before spending it. This way, you are prioritizing your own financial well-being.
Automating your finances is a great way to make sure your bills first are always paid on time and that you are saving regularly. You can set up automatic transfers from your checking account to savings or investment accounts
#5 – Get Out of Debt
Debt can be a major financial burden, preventing you from achieving your financial goals. It’s important to get out of debt as soon as possible so that you can free up your money to save and invest for the future.
In fact, this is one of the first steps we stress here at Money Bliss – pay off debt!
There are a few different ways to get out of debt. You can try negotiating with your creditors, consolidating your debts, or making more money to pay off your debts faster. Whatever method you choose, make sure you have a plan and stick to it.
There are a few things you should avoid when trying to get out of debt.
First, don’t miss any payments or make late payments, as this will damage your credit score.
Second, don’t use credit cards while you’re trying to pay off debt, as this will only add to your balance.
Finally, don’t take on any new debts while you’re trying to get out of debt – focus on paying off the debts you already have first.
#6 – Start an online business
This can be a great way to create passive income and build wealth over time. There are many different types of online businesses that you can start, so do your research and find the one that is best suited for you.
Starting an online business is a great way to make some extra money on the side. It can be done relatively easily and doesn’t require much upfront work. Once you have the foundation in place, it’s easy to start generating income without any additional effort.
In fact, learning how to make money online for beginners is a hot topic!
The internet provides a unique opportunity to start and grow an online business. With the right tools, you can use the internet to your advantage and build a successful business.
#7 – Invest in the stock market
There are many ways to invest in the stock market, but the most common is through buying and selling shares on a stock exchange. You can also invest in mutual funds, which pool money from many different investors and then invests it in a portfolio of stocks or other securities. Another way to invest is through exchange-traded funds (ETFs), which are similar to mutual funds but trade like stocks on an exchange.
Before you start investing in the stock market, there are a few things you should consider.
First, you need to decide what your investment goals are. Are you looking to grow your wealth over time, or do you need access to your money quickly?
Second, you need to understand the risks involved with investing in the stock market. While there’s always the potential for making money, there’s also the potential for losing money.
Finally, you need to research different investments and choose one that fits your goals and risk tolerance.
Investing in the stock market comes with a number of risks, including the potential for losing money. While there’s always the potential for making money, there’s also the potential for losing money. Before you invest, you should understand the risks involved and make sure you’re comfortable with them.
#8 – Automate your finances
Automating your finances means setting up automatic payments for your bills and other regular expenses. This can help you to stay on top of your finances and avoid late payments or overdraft fees.
There are a few different ways that you can automate your finances. You can set up automatic payments through your bank or credit card company. Alternatively, you can use a service like Quicken to track your spending and create a budget.
Automating your finances can save you time and money. It can help you to stay on top of your bills and avoid late fees or overdraft charges. Additionally, it can free up more of your time so that you can focus on other aspects of life.
#9 – Habit of Automatic Savings
Automatic savings works similarly to automating your finances, but instead of paying bills, money is automatically transferred into a savings account each month. This can help you build up your savings without having to think about it.
With automatic savings, you can grow your savings without extra work; however, if you need access to the money in your savings account quickly, it may take a few days for the funds to transfer back into your checking account.
Challenge yourself to save more than the average 5% personal saving rate.
Overall, automating your finances can be a great way to stay on top of your bills and save money. Just be sure to consider the pros and cons of each method before you decide which one is right for you.
#10 – Use a Rewards Credit Card and Pay It Off Each Month
When you use a rewards credit card, you earn points for every purchase you make. These points can be redeemed for cash back, merchandise, travel, or other perks. Some cards also offer bonus points for spending in certain categories, such as gas or groceries.
To get the most value from your rewards card, it’s important to pay off your balance in full each month. This way, you’ll avoid paying interest on your purchases and will actually save money by earning rewards.
This is something we do on a regular basis and helps us to pay for our travel.
There are both pros and cons to using a rewards credit card. On the plus side, you can earn valuable rewards just by making everyday purchases. And if you pay off your balance in full each month, you’ll avoid paying interest and will actually save money.
On the downside, if you carry a balance on your card from month to month, the interest charges will outweigh any benefits you earn from the rewards program. Additionally, some cards have annual fees that can offset any savings you might accrue from using the card.
#11 – Learning How to Budget
A budget is an estimation of revenue and expenses over a specified future period of time. A budget is often created annually, but may also be created more or less frequently like biweekly or by paycheck.
Budgeting is important because it allows you to track your income and expenses so that you can make informed financial decisions. It also enables you to save money by identifying areas where you can cut back on spending.
Simple Budgeting tips:
Make sure your income and expenses are realistic
Track your progress over time
Don’t be afraid to adjust your budget as needed
Keep your long-term financial goals in mind
Budgeting shouldn’t feel constricting – just that you are able to do what you want to do.
#12 – Save Your Money
Saving money is a key component of building wealth. You need to have money saved in order to invest, and you need to be investing in order to grow your wealth. There are a few different ways that you can save money.
One way to save money is to create a budget and stick to it. This will help you track your spending and make sure that you are not spending more than you can afford.
Another way to save money is to make sure that you are taking advantage of all of the tax breaks that are available to you. This can help you keep more of your hard-earned money in your pocket.
Finally, another way to save money is by automating your savings so that you do not have to think about it every month.
Try to save your money wherever you can, even if it is a small amount. Every little bit counts in the long run!
#13 – Now, Invest Your Money
Investing your money is one of the best ways to grow your wealth over time.
When you invest, you are essentially putting your money into something that has the potential to grow over time. This can be done through stocks, bonds, mutual funds, real estate, and other investments.
The key is finding an investment that has the potential for growth and then holding onto it for the long haul.
Especially learn how to flip money!
#14 – Put Money away for retirement
How much you need to save for retirement depends on a number of factors, including how long you expect to live and what kind of lifestyle you want in retirement.
A general rule of thumb is that you’ll need 70% to 80% of your pre-retirement income to maintain your standard of living in retirement.
There are a number of different options for where to save for retirement, including 401(k)s, IRAs, and annuities. Each has its own set of benefits and drawbacks, so it’s important to do your research before choosing one.
The main benefit of saving for retirement is that it gives you a nest egg to help cover expenses for retirement. Additionally, many employer-sponsored retirement plans offer matching contributions, which can help boost your savings.
#15 – Invest in yourself
The most important thing you can do with your money is to invest in yourself by getting higher education or learning new skills. By investing in yourself, you are ensuring that you will be able to earn a higher income and grow your wealth over time.
There are a few different ways you can invest in yourself.
One way is to invest in your education by taking courses or attending seminars that will help you learn new skills.
Another way is to invest in your health by eating healthy foods and exercising regularly.
Finally, you can also invest in your relationships by spending time with positive people who will support and encourage you.
Investing in yourself has many benefits that are normally overlooked.
First, it will help you earn a higher income which means you will be able to save more money and grow your wealth faster. Second, it will improve your health so that you can live a longer and happier life. Third, it will help improve your relationships so that you can have more supportive and positive people in your life.
This can help you earn more money over time and set you up for success.
Bonus Tip = Be Generous
When you give to others, you are actually helping yourself. Numerous studies have shown that giving makes us happier and can even improve our health.
There are many ways to be generous. You can give your time, your money, or your talents. You can also simply be kind and helpful to others. Whatever way you choose to give, make sure it is something that feels good for you.
Many people ask what to give and there is no one answer to this question. It depends on what you have to offer and what would be most helpful to the person or cause you are supporting.
Things to consider when putting money to work
When it comes to making money, there are a lot of different ways you can go about your little endeavor. But before we get into the specifics of how and when you should put your change to work, we have some general tips to help you along the way.
Where are you today?
First, start by looking at your current spending and saving habits. If you’re not saving anything right now, start small by setting aside $50 from each paycheck into a savings account. Once you have a cushion built up, you can start thinking about investing your money.
Also, think about your long-term financial goals and how much money you’ll need to save to reach them. Automate your savings so that it’s easier to stay on track.
How Much are You Spending?
You should also be mindful of your spending habits as they can have a big impact on your ability to grow wealth over time. Try to live below your means and avoid unnecessary purchases so that more of your money can go towards savings and investments.
It can also be helpful to create a budget so that you have a better idea of where your money is going each month. This will allow you to make adjustments as needed in order to free up more money for savings and investing.
Are you Investing?
Investing is one of the best ways to grow your wealth over time. When you invest, you’re essentially putting your money into something that has the potential to earn more money in the future. This can be done through stocks, bonds, mutual funds, and other investment vehicles.
It’s important to do some research before investing so that you understand the risks involved and don’t end up losing all of your hard-earned money.
Is Debt Holding You Back?
Last but not least, debt can also impact your ability to grow wealth over time. High-interest debt, such as credit card debt, can eat away at your savings and make it difficult to invest.
If you have high-interest debt, it’s important to focus on paying it off as quickly as possible. You may need to make some sacrifices in other areas of your life in order to do this, but it will be worth it in the long run.
How to Make Your Money Work for You FAQs
1. Invest in stocks: This is one of the most popular methods of growing wealth. When you invest in stocks, you are buying a piece of a company that will be worth more in the future. The key to making money with stocks is to buy low and sell high.
2. Invest in real estate: Another popular way to grow your wealth is to invest in real estate. When you invest in real estate, you are buying a property that will increase in value over time. The key to making money with real estate is to make sure your portfolio is set up for high probability of success.
3. Invest in bonds: Bonds are another way to grow your wealth. When you invest in bonds, you are lending money to a company or government that will pay you back over time with interest.
Saving money is one of the best ways to use your money. It allows you to have a cushion in case of an emergency, and it also allows you to save for future goals. There are many different ways to save money, but some of the best include setting up a budget and sticking to it, setting up a savings account, and investing in yourself.
Investing your money is another great way to use it. When you invest, you are essentially putting your money into something that has the potential to grow over time. This can be a great way to build your wealth over time and secure your financial future. Some of the best things to invest in include stocks, bonds, and mutual funds.
Of course, you can also use your money by spending it on things that you need or want. While this may not seem like the most productive use of your money, it is important to remember that spending is necessary in order to live a comfortable life. Therefore, it is important to find a balance between saving and spending so that you can enjoy both now and in the future.
Keep your money in a safe place.
Invest in a good financial institution.
Diversify your investments.
Review your insurance coverage regularly.
Have an emergency fund.
Money Works for You
In this article, we covered a few different ways to grow your wealth.
Making your money work for you is a great way to grow your wealth without having to put in a lot of extra effort. By following the tips and tricks in this guide, you can easily make your money work for you and watch your wealth grow over time.
If you are looking for where to put your money to make it work for you, we uncovered the 15 best ways to make your money work for you.
Whichever method you chose is up to you.
The best answer is to diversify your portfolio and create multiple streams of income.
So what are you waiting for? Get started today and see the results for yourself!
Know someone else that needs this, too? Then, please share!!
Would you like to open a checking account, but you’re worried that your bad credit and past banking history might get in the way? With these issues, it can be difficult to open a new bank account.
20 Best Bank Accounts for Bad Credit
Regardless of your banking history, there are numerous banks and credit unions that offer bad credit checking accounts, all with unique features and benefits.
1. Chime
Our Top Pick
No minimum opening deposit or monthly service fee
Over 60,000 fee-free1 ATMs
Get paid up to 2 days early with direct deposit2
No credit check or ChexSystems
With Chime®, a bad credit score is no longer a deal-breaker. They offer an award-winning financial app and debit card with no credit check.
You can open a Chime Checking Account online with no monthly fees. And by that, we mean no overdraft fees, no monthly maintenance fees, no foreign transaction fees, and no minimum balance fees—ever.
Chime also offers a new way to build your credit with the Chime Credit Builder Secured Visa® Credit Card7. It’s a secured credit card with no annual fees, no credit checks, and no interest1 charges.
They offer access to over 60,000 MoneyPass® and Visa® Plus Alliance ATMs. Plus, you can get your paycheck up to 2 days earlier with direct deposit. You can also deposit cash for free at over 8,500 Walgreens.
Chime is definitely the best option on this list.
2. U.S. Bank
$400 sign-up bonus
Monthly service fee can be waived
Over 40,000 fee-free ATMs
$25 minimum opening deposit
U.S. Bank is now offering the Bank Smartly® Checking account, a popular choice that can be applied for online in 26 states throughout the U.S.
If you’re based in any of the following states – AR, AZ, CA, CO, IA, ID, IL, IN, KS, KY, MN, MO, MT, NC, ND, NE, NM, NV, OH, OR, SD, TN, UT, WA, WI, or WY – you’re eligible to apply.
By opening a Bank Smartly® Checking account and a Standard Savings account, and completing qualifying activities, you have the potential to earn up to $400. Subject to certain terms and limitations. Offer valid through June 20, 2023. Member FDIC.
The account itself provides a variety of benefits, including a complimentary debit card that can be locked or unlocked if ever misplaced or stolen. U.S. Bank ATMs offer free transactions, as do over 40,000 MoneyPass Network ATMs.
Although U.S. Bank uses ChexSystems, it’s typically known to be more accommodating with its regulations than many other banks. Unless there’s a history of fraud or any money owed to U.S. Bank, opening a checking account is a possibility.
The checking account requires just a $25 minimum opening deposit, with a monthly service fee of $6.95. The monthly fee can be waived by maintaining a minimum balance of $1,500, or by having a minimum monthly Direct Deposit of $1,000.
3. GO2bank
4.50% APY on savings up to $5,000
No minimum opening deposit
Build credit with no annual fees
Overdraft protection up to $200
GO2bank is a neobank developed by Green Dot, is a neobank developed by Green Dot, a well-established fintech known for its prepaid debit cards and banking services.
The bank offers a checking account with savings subaccounts known as vaults, and the best part is that there is no minimum balance required to open an account online.
The savings account offers an attractive 4.50% APY on savings up to $5,000. Additionally, you can deposit cash at any of the 90,000 retail locations or withdraw funds from any of the 19,000 fee-free ATMs.
You can also use the mobile app’s check deposit feature to deposit checks directly into your checking account.
With direct deposit, you can even receive your pay up to 2 days early or your government benefits up to 4 days early. Opt-in for overdraft protection and be eligible for up to $200 in coverage with eligible direct deposits.
Responsible use of the GO2bank Secured Visa Credit Card can also help you build your credit over time.
If you receive a payroll or government benefits direct deposit in the previous monthly statement period, your monthly fee is waived. Otherwise, it is only $5 per month.
4. Chase
$100 bonus after 10 purchases in 60 days
No credit check or ChexSystems
Over 16,000 fee-free ATMs
$4.95 monthly fee
Chase is one of the most popular banks in the U.S. And now, they offer an account called Chase Secure Banking that doesn’t require a credit check, doesn’t use ChexSystems, and doesn’t charge overdraft fees.
Account holders also get access to over 16,000 ATMs, free online bill pay, and free money orders and cashier’s checks.
With 4,700 locations across the country, this is an excellent option for anyone who prefers having access to physical branches.
Opening a Chase Secure Banking account comes with a $100 cash bonus when you use the card for 10 purchases within 60 days.
Account approval is immediate and you’ll receive your debit card within days. There is a small monthly service fee of $4.95; however, there is no minimum deposit to get started.
5. mph.bank
Earn 4.70% APY on unlimited savings
No minimum balance to open
Get paid up to two days early
Free withdrawals at over 55,000 ATMs
mph.bank, created by Liberty Savings Bank, F.S.B. and a Member FDIC, is a banking option that truly stands out for its unique approach. MPH, which stands for ‘Makes People Happy’, is not just a slogan – it’s a philosophy that permeates every aspect of their banking services.
They offer five different bank accounts, but the standout offering is their Future Account. This account lets you earn an impressive 4.70% APY on your savings, with no minimum balance to open and no maximum balance for the rate.
Alongside this, mph.bank offers a Spend account that allows you to receive your paycheck two days earlier.
Accessing your money is easy with mph.bank, as they are part of the Allpoint network, offering you free access to over 55,000 ATMs.
In addition to these features, mph.bank has a host of financial tools available. From planning for your future to managing your finances on one page, mph.bank ensures that you have the necessary resources at your fingertips.
6. Current
No credit check or ChexSystems
No minimum deposit or maintenance fees
Get paid up to two days faster
Overdraft up to $200 without any overdraft fees
Current is one of the fastest-growing mobile banking solutions in the U.S., with over one million members. However, Current is a financial technology company, not a bank. Most importantly, Current does not use ChexSystems or pull your credit.
Some features of the Current mobile app and debit card include fee-free overdraft protection of up to $100, 40,000 fee-free Allpoint ATMs, and no minimum balance or hidden fees.
You can also get paid up to two days sooner with direct deposit and earn up to 15x points, and get cashback.
7. Walmart MoneyCard
No monthly fee with direct deposits of $500 or more
Earn up to 3% cash back on purchases
Overdraft protection covering up to $200 with eligible direct deposits
2% APY on savings
The Walmart MoneyCard is a prepaid debit card that offers a robust alternative to traditional checking accounts.
This card stands out with its cash back rewards program, offering up to 3% cash back when shopping at Walmart.com, 2% at Walmart fuel stations, and 1% at Walmart stores, up to a total of $75 each year.
Users can also enjoy the peace of mind offered by the overdraft protection feature, covering up to $200 for purchase transactions with opt-in and eligible direct deposits.
The ASAP Direct Deposit feature is another great perk, allowing users to receive their pay up to two days earlier and benefits up to four days earlier.
Additionally, with the Walmart MoneyCard, you can earn a 2% APY on savings and have chances to win cash prizes each month. The monthly fee of $5.94 can be waived with a direct deposit of $500 or more in the previous monthly period.
8. Revolut
No monthly fee
Earn up to 4.25% APY on savings
Cash withdrawals at more than 55,000 ATMs
Commission-free stock trading
Revolut is a financial app that comes with a prepaid debit card from Visa or Mastercard. However, you don’t need to wait for the physical card to get started. You can use the digital card right away on Apple Pay or Google Pay.
The Revolut debit card gets you fee-free access to over 55,000 ATMs, and no cost out-of-network ATM withdrawals up to $1,200 per month. You’ll also get 10 zero-fee international transfers per month.
This account offers cashback, discounts from top brands, a savings account, and more. Plus, your funds are insured by the FDIC for up to $250,000.
* Please note that Revolut is frequently updating its products and features, see the Revolut Terms and Conditions for the latest offerings.
* Revolut is a financial technology company. Banking services provided by Metropolitan Commercial Bank, (Member FDIC).
9. TD Ameritrade
No monthly fee
Unlimited fee refunds for U.S. ATMs
Free TD Bank debit card
Free checks and unlimited check-writing capabilities
TD Ameritrade offers a brokerage account with a comprehensive cash management checking account. As a client, you get unlimited checks. Once you open the brokerage account, you can complete the checking account application online.
A Cash Management account also gives you access to free online bill pay, as well as a free debit card with nationwide rebates on all ATM fees.
In addition, there is no monthly fee if you maintain a $100 minimum daily balance. However, it’s important to note that a TD Ameritrade checking account is not FDIC-insured or bank guaranteed.
10. Albert
No minimum balance
Cash advances up to $250
No maintenance fees
Free ATMs at over 55,000 locations
Albert is an innovative fintech banking platform that presents a powerful alternative to traditional bank accounts.
It sets itself apart with its attractive cashback rewards program attached to its free Mastercard debit card, making it your perfect shopping companion.
Moreover, it offers an around-the-clock personal finance help feature, “Ask a Genius”, ensuring you’re never in the dark about your money matters.
In addition, with Albert, you can have your paycheck up to 2 days early thanks to the direct deposit feature. This takes financial planning to a whole new level by ensuring you’re always ahead.
Albert is also a cost-saving alternative. There are no minimum balance requirements, no monthly maintenance fees, and you enjoy access to more than 55,000 ATMs, fee-free if you’re a Genius subscriber.
Finally, Albert ensures your money’s safety with FDIC protection up to $250,000. This adds an extra layer of security to your funds, allowing you to bank with confidence.
11. SoFi
With the SoFi Checking and Savings account, you won’t have to worry about being charged any overdraft fees, minimum balance fees, or monthly fees.
Plus, it offers free access to ATMs at over 55,000 locations within the Allpoint® Network. Similar to Chime and Current, you can get your paycheck up to two days sooner when you set up direct deposit.
You’ll also get a 1% APY on your checking and savings accounts and up to 15% cash back at local establishments with your SoFi debit card.
12. Navy Federal Credit Union
If you are an active-duty or retired member of the military, including the Armed Forces, National Guard, Coast Guard, or Department of Defense, you may be eligible for Navy Federal Credit Union membership.
NFCU doesn’t utilize ChexSystems or EWS. They also offer a free checking account alternative with no monthly service fees for those with qualifying direct deposits.
Additionally, NFCU offers its members convenient access to over 30,000 ATMs situated at both credit unions and retail locations across the United States and Canada through the CO-OP Network.
13. Aspiration
With the Aspiration Spend & Save account, you get an online checking account and savings account that has the potential to earn up to 5% APY.
Aspiration also offers unlimited cash withdrawals at over 55,000 ATMs. The minimum initial deposit is $10. Deposits are FDIC insured and you can get paid up to two days sooner.
The Aspiration debit card is made from recycled plastic. Deposits are 100% fossil fuel-free. And this online bank even gives you the option to plant a tree with every card swipe.
14. Southwest Financial Federal Credit Union
Southwest Financial presents a reliable banking option that prioritizes the financial wellbeing of its members. With no monthly service fees, it offers a cost-effective solution to managing your everyday finances.
Opening an account is easy and requires no minimum deposit. As a member of Southwest Financial Federal Credit Union, you enjoy the convenience of accessing your funds through a shared network of ATMs.
15. FSNB
FSNB (formerly Fort Sill National Bank) offers a hassle-free Basic Checking account to its customers, with a $5 minimum deposit requirement.
With the Basic Checking account, you need to maintain a minimum daily balance of $75. Otherwise, you’ll be charged a monthly fee of $5.50.
This account comes with a host of convenient features, including a Visa CheckCard that allows you to make purchases and withdraw cash at ATMs worldwide. Additionally, FSNB offers free online banking services, giving you access to your account from the comfort of your home or office.
16. Wells Fargo
Wells Fargo’s Clear Access Banking offers a practical, accessible checking account designed to suit various banking needs. While there is a $5 monthly service fee, this fee is waived for primary account owners aged 13 to 24.
With a minimal opening deposit of just $25, setting up Clear Access Banking is straightforward and affordable. As an account holder, you’ll have the convenience of accessing your funds through Wells Fargo’s extensive network of 13,000 ATMs and 5,300 branches across the country.
17. United Bank
United Bank has locations in Maryland, Ohio, Pennsylvania, Virginia, West Virginia, and Washington, DC. You can open a bank account with a $50 minimum initial deposit. You do not have to maintain a minimum balance and they don’t charge monthly fees.
You can also upgrade to rewards checking, where you earn cashback rewards on debit card purchases. You also get discounts on movies, theme parks, and prescriptions. The monthly service charge is $10, but you can have it waived if you reach 15 purchase transactions monthly or have a minimum of $500 in regular deposits.
18. Huntington National Bank
Huntington has locations in Arizona, Colorado, Illinois, Indiana, Michigan, Minnesota, Ohio, South Dakota, and Wisconsin.
Huntington Bank uses ChexSystems, but you can still qualify for a checking account as long as you don’t owe the bank any money. However, applicants with an EWS record may not qualify.
For Huntington’s basic account, there is no minimum opening deposit and no minimum balance requirement.
19. Varo
Varo is an online-only bank that offers a hassle-free banking experience with no monthly fees. As a Varo customer, you’ll gain access to early direct deposit payments, which means that your funds will typically be available on the same day they’re received.
Varo Bank knows that just because you need second chance banking doesn’t mean you want sub-standard service. The checking account comes with a free Visa debit card, access to over 55,000 Allpoint ATMs, and free paper check mailing.
20. Regions Bank
You’ll need a minimum opening deposit of $50 to open a Simple Checking Account at Regions Bank. This account doesn’t come with too many bells and whistles. However, it’s a suitable option for anyone with bad credit who wants a basic checking account.
Regions Bank will lower your monthly maintenance fee from $8 to $5 if you sign up for online statements. And you’ll have the option to open a savings account through Regions Bank as well.
What is a bank account for bad credit?
A bank account for bad credit is a type of account designed for people with negative banking records. These people are usually turned away from traditional banks and credit unions because of past instances of bounced checks, overdrawn accounts, or unpaid non-sufficient fund fees.
Fortunately, some financial institutions provide bad credit bank accounts that offer basic banking services such as a debit card, online banking access, and check writing privileges. Direct deposit is also available with some of these bank accounts, which makes it easy to access your income sources.
Bad credit checking accounts are typically easy to open, with minimal fees and most importantly, no credit checks or ChexSystems reports.
How do banks evaluate new account applications?
Opening a bank account can be a straightforward process, but it’s not uncommon for applicants to be turned down or offered limited options. That’s because financial institutions have criteria they use to determine who qualifies for a bank account and what type of account they can offer.
One of the most important factors that banks consider when you apply for a new account is your banking history. To assess this, most banks will check your ChexSystems report, which is a database of your past banking transactions. This report includes information such as any unpaid fees or overdrafts, closed accounts due to fraudulent activity, and other negative marks.
If you have a negative history in ChexSystems, such as unpaid fees or a history of overdrafts, it can be more challenging to open a bank account. In some cases, the bank may decline your application altogether or offer you a limited account that doesn’t allow you to write checks or use a debit card.
Another factor that banks make consider is your credit history. Some banks may pull your credit report from the three major credit bureaus Equifax, Experian, and TransUnion, but most don’t.
Your credit report is typically accessed by credit card issuers and lenders to assess your creditworthiness when you apply for loans or credit cards. But for bank accounts, your ChexSystems record is generally more important.
What is ChexSystems?
ChexSystems is a consumer reporting agency that collects user data from banks and credit unions. One of the things this data is used for is to create consumer reports that financial institutions can use to screen customers.
When attempting to open a new bank account, most financial institutions will pull your ChexSystems report. This report will show your past banking history including overdrafts, bad checks, check fraud, negative balances, or excessive withdrawals.
If you’ve had any of these issues in the past five years, it will likely be on your ChexSystems record. Fortunately, there are several reputable banks that don’t use ChexSystems or check credit to qualify customers. There are also numerous banks that offer second chance checking accounts for people with bad credit.
Can you open a bank account with no credit check?
Opening a no-credit-check bank account is easier than ever, with plenty of reliable banking services to choose from. There are two types of bank accounts for bad credit: banks that don’t use ChexSystems and second chance checking accounts.
Banks that Don’t Use ChexSystems
Some banks simply do not use ChexSystems to evaluate new accounts. These banks offer no-credit-check bank accounts for people with bad credit or a negative banking history.
The good news is that these accounts come with the same features as regular bank accounts offered to everyone else. You can expect to have access to online banking, direct deposit, and a debit card.
Second Chance Checking Account
With a second chance bank account, financial institutions may conduct a credit check or refer to ChexSystems, but they’re willing to give you a second chance regardless of your banking history. Second chance bank accounts usually come with a monthly maintenance fee.
The best second chance checking accounts still have some of the same features as ChexSystems banks and credit unions, such as overdraft protection, online banking, and bill pay. Additionally, it should be possible to upgrade to a standard checking account after demonstrating responsible banking habits.
What to Look for in a Bad Credit Checking Account
If you’re struggling with poor credit history, you might be wondering how to find a checking account that meets your needs while also helping you rebuild your financial reputation. Fortunately, there are several banks that offer checking accounts for bad credit. Here are some key factors to consider:
No Credit Checks
The first thing to look for is a bank or credit union that doesn’t look at your credit report or ChexSystems record when opening a checking account.
Many institutions also offer “second chance” or “fresh start” checking accounts designed specifically for individuals with poor credit or past banking issues. These checking accounts provide an opportunity to rebuild your financial standing, and often offer the option to upgrade to a traditional checking account after a certain period of time.
Low or No Minimum Balance Requirement
When you’re trying to rebuild your credit, every dollar counts. Look for a checking account that doesn’t require you to maintain a specified balance. This way, you won’t be charged fees for falling below a certain balance threshold. This will help you keep more money in your pocket and avoid unnecessary expenses.
Reasonable Account Fees
It’s important to be aware of the fees associated with checking accounts, especially if you have bad credit. Be sure to compare the monthly maintenance fees, overdraft fees, and any other charges associated with the account.
Many online banks offer checking accounts with no monthly fees or waive them if certain conditions are met, such as maintaining a minimum account balance or setting up direct deposit.
Online and Mobile Banking Features
In today’s digital age, having access to online and mobile banking is essential. Look for a checking account that offers a user-friendly mobile app and website, enabling you to manage your money on-the-go. These features should include the ability to check your balance, transfer money, pay bills, and deposit checks remotely.
Account Alerts and Notifications
Opt for a checking account that offers customizable account alerts and notifications. These can help you stay on top of your account activity, track your spending habits, and avoid a potential overdraft fee. You can typically set up alerts for low balance, large transactions, or unusual activity.
Overdraft Protection
Overdraft fees can be a significant burden, especially for people with bad credit. Look for a checking account that offers overdraft protection, which can help you avoid costly overdraft fees. Some banks may offer linked accounts, lines of credit, or small-dollar loans to cover overdrafts.
FDIC or NCUA insurance
Ensure that your checking account is insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). This insurance protects your cash deposits up to $250,000 per account holder in case the bank or credit union fails.
Opportunities for Financial Education
Finally, look for a financial institution that offers resources and tools to help you improve your financial literacy. This might include budgeting tools, educational articles, or workshops. The more you understand about managing your money, the better your chances of rebuilding your credit and maintaining a healthy financial future.
Bottom Line
Having poor credit doesn’t mean you can’t get a bank account. But, it does mean that your selection will be somewhat limited. We also show you how to clear your name and remove yourself from ChexSystems so that you can get a bank account anywhere.
It may take some time to get your name removed. Meanwhile, some of the banks we’ve listed above are just as good, if not better, than any account on the market right now. So, it’s a good idea to start with one of those.
Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank N.A. or Stride Bank, N.A.; Members FDIC. Credit Builder card issued by Stride Bank, N.A.
1. Out-of-network ATM withdrawal fees may apply with Chime except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.
2. Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. Chime generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.
7. To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.
Savings may be essential for financial health, but building a savings account is easier said than done. Between regular expenses and well…life in general, it’s often hard to figure out what you can actually afford to save, let alone prioritize planning for the future.
Fortunately, the best money-saving apps on the market today promote saving techniques that work around your regular spending habits – sometimes so smoothly you save money without even noticing.
What’s Ahead:
Overview of the best money-saving apps
App
Fees
Investing included
Account minimum
Savings account APY
Checking/spending account
Acorns
$1-$5/month
Yes
$0 ($5 for round-ups)
N/A
Yes
Digit
$5/month
Yes
$0
N/A
No
Stash
$3-$9/month
Yes
$0 ($1 for certain investment accounts)
N/A
Yes
Chime
N/A
No
$0
2.00%
Yes
Twine
0.6%/year for investment accounts
Yes
$5 for investment accounts
1.05%
No
Qapital
$3/$12-month
Yes
$10 for investment accounts
0.1%
Yes
Best for first time investing – Acorns
Cost – $3 or $5/month.
Options – Saving, investing, and checking accounts, retirement accounts, children’s UTMA/UGMA accounts, cash back extension.
Acorns gets its name from the idea that small “acorns” of spare change can grow into big savings if you give them a little time. As a combo savings/investing app, Acorns makes things simple for the brand new investor and doesn’t require much money to get started.
The $3/month“Personal” plan gets you an Independent Retirement Account (IRA) and an “Acorns Spend” checking account. For $5/month, you can tack on investment accounts for children as well.
If savings are your main goal, the basic account will probably be enough to get you rolling. When you link a credit or debit card to your investment account, Acorns “rounds up” your purchases to the nearest dollar and invests the difference for you once it hits $5 or higher – a popular auto-savings technique. You can add a “multiplier” feature if you want Acorns to double or triple the amount of investment with every transaction.
Learn more about Acorns or read our full review.
Best for flexible savings – Digit
Cost – $5/month (first 30 days are free).
Options – Savings, investment, and retirement accounts.
Savings techniques – Automatic fund transfers, credit card debt reduction.
For $5/month, Digit’s algorithms analyze your spending patterns and cash flow, then make a savings plan tailored to you. When you can spare a little extra, Digit transfers some cash to a linked savings account. When you have just enough to pay the bills, Digit skips the transfer.
This method can work well for people with fluctuating incomes or anyone who has trouble deciding in advance how much to save. If Digit does overdraft your account (which they promise not to), they’ll reimburse fees for up to two overdrafts.
Like most money apps, Digit lets you pick your own savings goals, and if you’re paying down credit card debt, Digit can automatically send the amount you’ve saved to the credit card company on your behalf.
Learn more about Digit or read our full review.
Best for lots of investment options – Stash
Cost – $3 or $9/month.
Options – Savings, investment, and retirement accounts, checking accounts, individual stocks and fractional shares, life insurance.
For people who want to watch their savings grow, Stash offers over 150 ETFs, stocks, and other micro-investment vehicles. You have more control over your portfolio picks with Stash than you do with Acorns – you can design your own portfolio or pick a pre-selected one from Stash. You can even pick ETFs that align with your values.
Savings options are flexible, too: you can choose an amount to put in savings each month, invest your spare change with the “round-up” method, or let Stash’s “Smart Stash” feature figure out what you can afford to save based on your cash flow.
Stash comes with a debit card, something a lot of savings apps offer, and its own unique “stock-back” incentive. Whenever you use the Stash bank card to buy something at a publicly-traded company, Stash gives you a small fractional share of company stock to add to your portfolio.
The app’s cost depends on how many extra features you want. Most everyday savers will be fine with the $3/month Growth plan, which includes a debit card, an investment account, and stock-back perks. You can also add a tax-advantaged retirement plan (a good idea if you haven’t opened a retirement account yet). Serious investors can upgrade to the $9/month “Stash+” for 2x stock-back returns and extra market info.
Learn more about Stash or read our full review.
Disclaimer – Paid non-client endorsement. See Apple App Store and Google Play reviews. View important disclosures.
Investment advisory services offered by Stash Investments LLC, an SEC registered investment adviser. This material has been distributed for informational and educational purposes only, and is not intended as investment, legal, accounting, or tax advice. Investing involves risk.
¹For securities priced over $1,000, purchase of fractional shares start at $0.05.
²Debit Account Services provided by Green Dot Bank, Member FDIC and Stash Visa Debit Card issued by Green Dot Bank, Member FDIC. pursuant to a license from VISA U.S.A. Inc. Investment products and services provided by Stash Investments LLC, not Green Dot Bank, and are Not FDIC Insured, Not Bank Guaranteed, and May Lose Value.” because the article mentions the debit card.
³You’ll also bear the standard fees and expenses reflected in the pricing of the ETFs in your account, plus fees for various ancillary services charged by Stash and the custodian.
⁴Other fees apply to the debit account. Please see Deposit Account Agreement for details.
⁵Stock-Back® is not sponsored or endorsed by Green Dot Bank, Green Dot Corporation, Visa U.S.A, or any of their respective affiliates, and none of the foregoing has any responsibility to fulfill any stock rewards earned through this program.
Best for low fees – Chime®
Cost – No monthly fees.
Options – Savings and checking accounts.
Savings techniques – Round-ups, automatic transfers to savings, paycheck transfers.
Chime is a mobile app that takes advantage of the lower-cost online-only financial app model to pass savings on to customers. They don’t charge a monthly fee, so you keep any money you save.2
Chime’s free checking and savings accounts offer plenty of the features you’ll find at a bank*, like:
A Chime Visa® Debit Card.
Check deposit options.4
Bill-paying functions.
Two-day advance on directly deposited paychecks.3
Checking and savings are linked; whenever you make a purchase with your checking account, Chime rounds up to the nearest dollar and adds the difference to savings.^ Or you can have Chime auto-deposit 10% of every paycheck into savings before the rest hits checking.1 Either way, the app does all the work.
Learn more about Chime or read our full review.
* Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank, N.A. or Stride Bank, N.A.; Members FDIC. ^ Round Ups automatically round up debit card purchases to the nearest dollar and transfer the round up from your Chime Checking Account to your savings account. 1 Save When I Get Paid automatically transfers 10% of your direct deposits of $500 or more from your Checking Account into your savings account. 2 There’s no fee for the Chime Savings Account. Cash withdrawal and Third-party fees may apply to Chime Checking Accounts. You must have a Chime Checking Account to open a Chime Savings Account. 3 Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date. 4 Mobile Check Deposit eligibility is determined by Chime in its sole discretion and may be granted based on various factors including, but not limited to, a member’s direct deposit enrollment status.
Best for joint savings – Twine
Cost – No fees for saving, 0.6% of invested assets/month for investing.
Twine is ideal for people who are saving for a goal together (though you can use it on your own, too!). It combines savings-app automation with robo-advisor guidance, which can be helpful if you have more than one savings goal.
The basic free Twine savings account earns you a little interest – there’s a 1.05% variable Annual Percentage Yield (APY). They encourage you to earmark accounts for certain financial goals, either “general savings” or specific goals like a vacation or a down payment on a house, and pick a monthly goal deposit amount so you can track your progress. If you’re saving with someone else, you’ll pick a joint goal but open individual accounts.
Investment portfolios are optional if you want to take your savings to the next level. Twine pre-selects diverse portfolios for you, and they only require $5 to get started.
Qapital runs on behavioral economics – their multiple savings strategies use your routines, habits, and everyday purchases to help bulk up your savings.
Here’s how it works: you get a spending account that earns you 0.1% in compounded monthly interest, and a “goals” account to grow your savings. To fund your goals, you can transfer regular, set amounts from a linked bank account to your goals account, or pick one of Qapital’s “rules” or savings tricks.
There’s the “round-up” rule, which lots of apps use. There’s the “trigger” rule which saves a specific amount every time you engage in a certain activity (something simple you do regularly, whether it involves spending money or not).
The “guilty pleasure” rule moves a little cash into savings whenever you indulge in your favorite pricey latte, takeout, etc. The “52-week” rule lets you gradually increase the amount you stash in savings over a year. Qapital has other rules, too, and you’ll probably find one that works for you.
Their pricing is higher than most money-saving apps – a $3/month basic plan has all the savings tools, while the $6/month plan unlocks pre-selected investment portfolios and gives you a Qapital debit card. The $12/month master plan lets you open joint savings with a partner, similar to Twine.
Learn more about Qapital or read our full review.
Why should you use money-saving apps?
You’re just starting to build savings
The idea of building a savings account might be intimidating, but it’s much simpler to stash away 50 cents whenever you buy a cup of coffee or a dollar whenever you refill your gas tank. That’s mostly what these apps do – take the work out of savings one small amount at a time, so your regular budget isn’t disrupted.
Read more: The Pros And Cons of ‘Spare Change’ Investment Apps
You struggle to make savings a habit
If your money management style is on the “spend now, save later” side, it may be unrealistic to overhaul your habits right away and heap everything into savings. That’s not how habits work; they take time to develop.
A free 30-day trial of Digit or Qapital, for instance, could be enough to show you how much the app can grow your savings in a typical month; and after 30 days, you’ll be more used to putting a little cash aside.
You’re curious about small-scale investing
Investing can be a great way to save, but it’s inherently risky, and you don’t want to launch yourself right into an investment account without knowing what you’re doing.
These apps make micro-investing as easy as sticking to an automated savings plan and assessing your risk comfort level. And they let you start with small balances, so you don’t have much to lose.
Read more: 7 Easy Ways To Start Investing With Little Money
Why shouldn’t you use money-saving apps?
You have a savings pattern that works for you
If you’re already saving money on a timeline that fits with your goals and income, a savings app could help you skim a little more off the top of everyday purchases, but it might not be worth the fees.
You already have substantial savings
The savings accounts built into money-saving apps are great tools to get started, but they’re not the highest-yield accounts out there. You’ll earn more money keeping your savings in a bank or investment account that offers a higher APY (Annual Percentage Yield), especially if you have decent credit.
Most important features of money-saving apps
Automated saving
Money-saving apps take the “how much can I afford” guesswork out of savings by putting them on autopilot. You won’t see a huge interruption to your regular cash flow, which is nice – saving money doesn’t have to feel like a penalty or a punishment.
And most apps make the automation flexible; if you’re having a lean month or two, you can temporarily stop withdrawals (or, as with Digit, the app stops them for you).
Most importantly, you’ll get into the savings habit after a while.
Saving for short- and long-term goals
Sometimes it’s easier to save if you have something to look forward to. Money-saving apps keep you motivated by letting you choose your goals and showing you how much your savings have progressed.
“Rounding up” purchases
This auto-savings technique is available on almost every app now. By rounding up your purchases to the nearest dollar (or two dollars, or three – some apps let you multiply) you’re saving small, manageable, regular amounts while you spend.
Checking accounts
Several apps set you up with a checking account and debit card, though you can usually link an existing checking account as well.
Everyday money management
For elaborate budgeting templates, look for a budgeting app specifically (you can find our recommendations here). But savings apps have plenty of tools to keep your finances in line, especially if you tend to be disorganized and overdraft your accounts by accident. You can observe your spending patterns, set up payment reminders for bills, and get regular balance alerts all through the app.
Investing options
While investment accounts aren’t available with every savings app, they seem to be becoming more of a standard offering. “Micro-investing” lets you start out with spare change. Once you really get the hang of it, you may choose to switch to a higher-yield investment account elsewhere.
Summary
Money-saving apps are a great starting point, but they’re only one aspect of a solid financial management plan.
Think of them as a helpful tool to analyze your spending behavior and nudge you into the next steps, whether that means breaking down a monthly budget or working towards financial freedom.
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Are you wondering how much money you should have saved by 25?
If so, this post is for you.
You need to learn how to save from a young age to be financially responsible and enjoy your life without stress.
In this post, I will outline the steps that I took to save a total of $25,000 by age 25. That ultimately led to becoming a millionaire well before most people earn that 7 figure status.
My goal is to help motivate and inspire you to save as much money as possible.
I believe that if everyone saves just 20% of their income each year, we could create massive waves of positive change across the world. So let’s get started!
How much money should you have saved by 25?
It’s never too late to start saving for your future.
By age 25, you should be working through paying off debt and starting to improve your savings rate.
Below are guidelines on how much money a 25-year old should have saved by the age of 25.
Save a Total of $20000
By 25, you should have saved $20000.
Given the average savings for this age is only $11,250 and the median savings is $3,240 (source), you will be ahead of the curve with those super savers in this age group. However, most twentysomethings fall in the middle of the bell curve and could barely afford a job loss or any major expense.
Save at Least 50% of your Annual Expenses
Another rule of thumb for a 25-year-old is to save 50% of your annual expenses.
Let’s say, you spend an average of $20000 a year on rent, food, insurance, discretionary spending, etc, then you would need to save at least $10000.
This method will make sure you have enough money saved based on your lifestyle.
How much money should you have saved by age 30 for retirement?
If you want to have a comfortable retirement, you should save as much money as you can by the age of 25 and 30.
Most people don’t save enough for retirement and twentysomething (age 20-29) only have average 401k balances of $10,500 (source).
That means at a retirement age of 65, your account balance would be $94,259 in a taxable 401k / IRA or $228,107 in a Roth 401k / Roth IRA. The assumptions include no additional contributions and an 8% rate of return.
To prepare for retirement, aim to save between $15000 and $20000 by age 25. To stay on track, use a benchmark to figure out how much you need to save each year and customize your target based on your individual circumstances.
If you’re not saving for retirement yet, start contributing to 401k plans and IRA accounts now so that you’ll have a solid foundation when it comes to savings.
Save at a Minimum of 10% of your Income
This needs to be non-negotiable at the age!
It is very easy to find ways to pay yourself first and save 10% of your income. While you may prefer to hit that happy hour or buy those designer shoes, you are better off trimming your spending and up your savings while you are young.
Then, each year increase your savings percentage by 1% until you reach the 20% threshold.
But, you don’t have to stop there! Many Gen Zs are wanting to explore why there are young and healthy and not be a slave to the workforce. That means you need to save more to make that happen.
What should your net worth be at 25?
Most people in their 20s are typically swaddled in debt, especially student loan debt.
Your goal is to have a positive net worth – even if by $100. That means your savings is greater than any debt you have.
Your goal is to double your liquid net worth quickly.
What is the average savings rate for people in their 20s?
Okay, let’s be real… okay?
Most young adults are spending more money than they are saving. That means each month their spending exceeds their income.
As such the statistics do not even include this age group.
how much should I have in savings at 25?
At 25, you should have about 3-6 months of living expenses saved up in the bank.
Additionally, it is important to start thinking about your long-term financial goals and make sure you are building a foundation that will support those goals.
What are the different savings goals that people in their 20s should have?
Saving for your future is important, and you need to make it a top priority.
There are many different savings benchmarks to choose from including:
Save an emergency fund of at least $2000.
Participate in one of our popular money saving challenges.
Start contributing to workplace retirement and save enough to get the company match.
Begin saving for those big purchases like a gently used car or downpayment for a house.
Set up a Roth IRA and start making contributions (even baby amounts count).
This will make sure you are on your way to becoming financially sound before you turn 30.
What are the list of ways to save money?
If you want to save money, there are a few things you can do.
Saving money in your 20s is the easiest age to save as you don’t have as many responsibilities and obligations as you will in the future.
Here is a list of the most common ways to save money:
1. Use Budget Percentages as a Guide
If you want to save money by 25, you’ll need to start by setting a budget and sticking to it. You can reach this goal by using different budgeting techniques, such as the 50/30/20 rule.
The 50/30/20 rule is a good place to start:
50% of your income going towards necessities (housing, food, utilities)
30% going towards discretionary expenses (groceries, entertainment, travel)
20% saved for emergencies
This will help you be consistent in your savings habits is key to saving money.
2. Track your spending
Tracking your spending is key to understanding where your money goes.
Save receipts from each purchase and go over them once a week to get a better understanding of your spending habits. This can help you see where you might be overspending and make improvements to your budgeting techniques.
Great apps to help you include Simplifi or Rocket Money.
2. Use AI Powered Savings Apps and put your savings on autopilot
With AI, you can save money by automating your savings process.
Setting up recurring transfers to automatically deposit money into your savings account means that you won’t have to worry about finances anymore.
The popular AI saving apps can also help you save for your retirement, as well as any financial goal you may have. Thus, reducing the amount of time spent on financial planning.
Top AI Savings Apps:
4. Use gamification to save
Gamification can help make saving fun and more likely to be kept up.
Gamification can help people save money by providing a tangible benefit to work towards and providing some valuable encouragement.
By using the method of gamification, you help others save money by motivating them to reach a goal while you work to complete the same goal.
For example, if you’re trying to save money for a trip, you could set up a game with friends (aka accountability partners) where you earn points every time you save money with the 100 envelope challenge. Those that save the goal amount get to go on the trip.
5. Collect your employer’s 401(k) match
If your employer matches your contributions to a 401(k) plan, it’s important to take advantage of the match.
A 401(k) match is a free money offer from your employer, so it’s worth maxing out your contributions in order to gain the most benefit.
Also as long as you meet the qualifications, you can also contribute post-tax dollars to a Roth IRA account. This is another great way to increase savings for retirement.
6. Delay buying a home
Buying a home is not easy, but it’s important to have goals and plan for what you want to achieve.
The down payment on a house is one of the most important factors when buying a home as such you may need to delay buying a home for as long as possible to save money.
Also, by delaying buying a home, you can save money by taking the time to research different neighborhoods, compare prices, and get pre-approved for a mortgage.
Not only will this save you money in the long run, but you will also have peace of mind knowing that your future home is exactly what you wanted.
7. Use Open banking to track your spending
If you’re interested in tracking your spending and saving money, you can use Open banking to do just that.
Open banking allows customers to access their bank account information and manage their finances through APIs.
This means you can see how much money you’ve spent and where your money is going, which can help you stay within your budget. Additionally, open banking tools can be used to better understand your bank’s products and services.
Many of the best budgeting apps, such as Quicken, allow you to utilize open banking data to help you organize and manage your money in one place.
8. Use credit cards sparingly
Even those Gen Z has the lowest credit card debt amount (source), it is still wise to make sure you are using credit cards appropriately.
Credit cards can be a great way to earn rewards or get cash back, but only if you use them sparingly and pay off your balance in full each month to avoid interest charges.
It’s also important to check your credit report regularly to make sure there are no outstanding debts you didn’t know about.
9. Use a budget
If you want to save money, using a budget is a great way to accomplish it.
By tracking your expenses and setting limits on how much you can spend each month, you can make sure that you are always saving money.
A budget is a great way to save money because it allows you to choose where you actually want to spend your money rather than figuring out where you spent your money afterward. It also allows you to optimize your spending so that you don’t waste money on unnecessary things.
10. Invest for the long term
Investing for the long term can be a great way to save money as you let your money grow instead of having to create new streams of income.
You can buy stocks in companies or ETFs and hold onto them for a long time, adding money to your account regularly. This strategy can help you take advantage of market volatility and make money over the long term.
You also need to make sure you’re properly investing your money in order to reach your savings goals.
What is the best advice to save money by 25?
To save money by 25, individuals should aim to save 10% of their income.
It may be difficult to save more than 10% of one’s income, but it is possible.
Saving money is essential for financial security at any age, and you can start by being determined and making sure you’re saving at least 10% of your gross salary.
Simple Tips to Save Money by 25
You should focus on spending as little as possible to save money, and set a fixed budget rather than relate your expenses to your income.
Be consistent in your savings and avoid impulsiveness to save money.
Save up on transport or any other thing you might feel is a luxury rather than a necessity.
What is the average savings rate for people in their 20s?
The average savings rate for people in their 20s is $11,250, so it’s important to start saving as soon as possible.
The median savings is $3,240, so most people in their 20s have modest savings.
Savings Tools to Build Cash Fund Savings
There are many ways to save money, so find what works best for you.
People in their 20s have a lot of opportunities to save money, so don’t wait to start!
You want a savings plan that matches your long-term financial goals!
Pay yourself first
In order to have a successful future, it is important to start saving from a young age. There are a few different ways to save money, and one of the most important is to pay yourself first.
This means putting your own money into your bank account before spending it on anything else.
This will help you build a strong foundation for your future, and you will be able to save more money
Save Consistently
Set aside money regularly so you have a stash of cash to use when you need it.
That means each you save $100 or each paycheck you save $250.
Whatever the amount, do it consistently.
Trim Spending
If you want to save more money each month or year, try cutting back on unnecessary expenses.
Don’t rely on your income to directly influence your costs – track how much you’re spending each month and try not to exceed your allotted amounts for each category.
Do not overspend just because there’s more money in your checking account – create healthy financial habits that will last long-term.
Use Cash Windfalls Strategically
These cash windfalls could be from bonuses, inheritances, or even some left hand itching lottery luck!
You want to save those cash windfalls and make a plan on how you will spend them.
Additionally, you may be able to use the money to pay down debt or buy a home. This is an important lesson to learn if you have unexpected money coming your way—you don’t have to spend it all!
Save Increases in Income
Dedicate additional income to savings so that you’re really putting your money where your mouth is.
You can increase your savings by dedicating a percentage of your income to savings. Dedicate 10% of your income to savings, for example, and then an extra 1% to save search year.
Savings will grow along with your income, and you will have more money to use for other needs.
Make Saving a Habit
Your saving habits will change as you reach your 20s and into your 30s.
However, it’s important to keep track of your progress and make saving part of your regular routine. There are many different ways to save and reach your goals, so find what works best for you.
FAQs
If you have a low income, there are still ways that you can save money.
Try to focus on paying off high-interest debt first and then saving three months of living expenses.
Another way to save money is by reducing unnecessary expenses with a 30 day spending freeze.
The answer to this question depends on your individual situation and goals. However, we can offer some general advice on saving habits for a 25 year old should include:
First, it’s important to set a budget and stick to it. This will help you track how much money you are spending each month, and allow you to make better decisions about where to cut back. Add 1% to your monthly savings each month until you reach your goal of $20000 saved.
You also need to be mindful of how you spend your money. Try not to rely too heavily on credit cards or other forms of debt, which can quickly add up over time. Instead, try investing in stocks or bonds instead – these tend to provide more reliable returns over time and offer less risk than some other investments.
Finally, don’t forget about savings! Whether it’s into a high-yield savings account or an emergency fund earmarked for unexpected expenses, putting away some extra cash will help ensure that you have enough resources when necessary.
How much should I have in my emergency fund by 25?
By 25, you should have saved at least $1000.
However, 2% of your annual salary is a better threshold.
By age 25, most people should be saving at least 5% of their income and contributing an additional 1% every year.
If you can’t save enough money to contribute at the recommended rates, don’t worry – you can still save for retirement by gradually increasing your savings rate.
Saving money can be difficult, but it’s important to focus on not spending every penny you earn.
One way to do this is to set aside a certain amount of money each month that you will not spend.
Another way to save money is to find ways to reduce your monthly expenses. For example, you can cook at home more often instead of eating out, or you can carpool with friends to save on gas.
If you’re determined and have the skills, you can quickly learn how to make money online for beginners.
Side hustles are the name of the game right now.
Stick around Money Bliss – we have plenty of ways to help you earn extra money.
If you want to pay off your debts more quickly, you should start by saving money each month.
You can use your savings to pay down your debts faster if you focus on high-interest debt first.
If you have three months’ worth of living expenses saved up in case of emergencies, that would also be a good place to start. Check out the best debt apps to help you.
First, you need to make sure you are financially stable in other areas. You are fully funding your retirement accounts and Health Savings account, you have stable housing.
Then, you can consider saving for a child’s education through a 529 plan.
Saving for a child’s education can be difficult and expensive, but it’s important to start early if you have the extra income to support it.
To save money for a vacation, start by setting a specific amount you want to save each month. Then, calculate how much money you need to save by the date of your dream vacation.
Set a date by which you want to have traveled and begin backing out the math needed for that trip! As long as you continue saving 20% of your income each month and stay within budget, travel is always possible!
How to Save for a retirement
To save for retirement, you should start by investing 5-15% of your paychecks into a tax-advantaged account.
You should also plan your retirement based on your income, age, and desired lifestyle. You can save for retirement by consistently increasing how much you put in retirement accounts.
Don’t forget to include that employer match!
What should I do if I don’t have enough saved by 25?
Don’t get down on yourself!
Start now!
Waiting will only exacerbate things.
There are many different savings techniques to try, so it’s important to find one that works for you:
Start by putting away $50 every month and then add more funds as needed.
Pick one of our money saving challenges.
Use cash or debit cards instead of credit cards.
Even if you don’t have any big expenses planned in the near future, saving is still important for long-term financial stability. You’ll be on your way to having enough money when you’re older!
What are the consequences of not saving by 25?
You have nothing to show for your hard-earned income.
That is the cold and honest truth. But, you are only 25 years old, so you have plenty of time to change your ways.
If you’re not saving by 25, you may have to make some sacrifices in order to reach your financial goals. You may need to cut back on your spending, take on a second job, or make other changes to your lifestyle.
However, if you’re willing to make these sacrifices, you can still reach your goals.
Savings Steps for your Twenty-Something Self
When it comes to your twenties, there are a lot of things you want to do and accomplish.
One of the most important things on that list should be saving money.
After all, the earlier you start saving, the more time your money has to grow.
Starting to save money from a young age can lead to a larger nest egg over time. Plus, if you start early, you can take advantage of compound interest, which will help your money grow faster.
An individual’s earnings and spending patterns are still in flux during their twenties, so there are many opportunities to save.
Also, you need to remember there is more to life than just saving money–put other goals on your list (such as starting a business) and figure out how much you need to save each month in order to reach your targets.
Now, learn how much should I have saved by 30.
Know someone else that needs this, too? Then, please share!!
In the past decade, we’ve seen a major transformation in the banking sector. As the world continues to digitize, the financial landscape has shifted in response, giving birth to a plethora of online banking services. One such innovation that has garnered widespread adoption is online checking accounts.
As a key financial tool, a checking account serves as a lifeline for day-to-day transactions, paying bills, and generally managing one’s finances. But with online checking accounts, convenience, accessibility, and often better rates and lower fees have made them an attractive alternative to traditional banks.
10 Best Online Checking Accounts
These best online checking accounts offer a range of features, from high annual percentage yield (APY) to robust mobile apps, all designed to meet the varying financial needs of users. Here are our top 10 picks for 2023.
1. Chime Checking Account
Chime, a financial technology company that offers online banking services, is revolutionizing the banking industry with its online checking account that pairs both convenience and value into a single offering.
With Chime, you can access banking services without the constraints of physical branches and enjoy a plethora of services, from direct deposits to earning savings interest and more.
It’s essential to note that Chime isn’t a bank but rather a financial technology company providing banking services through Bancorp Bank, N.A., and Stride Bank, N.A., Members FDIC.
Key Features
No monthly maintenance fees or minimum balance: The Chime Checking Account comes with no monthly maintenance fees or minimum balance requirements, making it a cost-effective option for those looking to maximize their financial resources.
Early direct deposit: With Chime, you can receive your direct deposits up to two days early, providing you with quicker access to your funds compared to many traditional banks.
SpotMe® feature: This innovative feature allows you to overdraw your account up to $200 on debit card purchases without a fee, provided that you have $200 or more in qualifying direct deposits each month. The SpotMe® limit can be increased based on account history, direct deposit amounts and frequency, spending activity, and other factors.
Automated savings features: Chime allows you to save effortlessly with its Round Ups feature. Each time you use your Chime Visa® Debit Card, the transaction is rounded up to the nearest dollar, and the difference is transferred to your savings account. The Save When I Get Paid feature lets you set up a recurring transfer of 10% of your direct deposit paycheck of $500 or more from your checking account to your savings account each time you get paid.
Extensive ATM network: With Chime, you get access to over 60,000+ fee-free ATMs nationwide, giving you the flexibility to withdraw cash without worrying about ATM fees.
The Chime Checking Account is a stellar example of how online banks are providing value-packed offerings that rival traditional banks.
The account is particularly beneficial for those who receive direct deposits and don’t need to deposit cash often.
2. Axos Bank Rewards Checking
Axos Bank is an online-based bank that’s shaking up the banking industry with its online Rewards Checking account, a unique blend of convenience and value.
Axos allows you to utilize banking services without the constraints of physical branches and offers numerous benefits, from earning high APY to ATM fee reimbursements and more.
It’s important to note that Axos Bank is a completely online bank without in-person customer service options.
Key Features
High APY: The Axos Bank Rewards Checking account can earn an APY of up to 3.30% on balances up to $50,000, given certain conditions are met. You can earn this high APY by fulfilling certain requirements. These include maintaining a monthly direct deposit totaling at least $1,500 or making qualifying debit card purchases. Additionally, maintaining certain balances in Axos investment accounts, or making a monthly Axos consumer loan payment using Rewards Checking.
No Overdraft Fees: Rewards Checking doesn’t charge overdraft or nonsufficient funds fees. Transactions are simply declined unless you enroll in one of the bank’s overdraft programs, which include the option to set up free automatic transfers from a savings account to your checking account if your balance goes negative.
ATM Fee Reimbursement: Axos Bank offers unlimited ATM fee reimbursements, which gives you the flexibility to withdraw cash from any ATM without worrying about the fees.
Cash Deposits: Axos Bank uses a third-party service, Green Dot, to let customers add cash to their accounts or reload debit cards at retailers such as 7-Eleven and CVS Pharmacy. However, it costs up to $4.95 per deposit. You can also make deposits at some of Axos Bank’s 91,000 in-network ATMs.
Remote Customer Service Options: Axos Bank offers a variety of remote customer service options, including a 24/7 phone line, automated online chat, secure online messaging, and Twitter support.
The Axos Bank Rewards Checking account is a prime example of how online banks are delivering offerings that compete with traditional banks.
The account is particularly beneficial for those who can meet the requirements to earn the high APY and are comfortable with online-only customer service.
3. Current Account
Current, a pioneering financial technology company, delivers cutting-edge banking solutions with its Current Account.
While not a traditional bank, Current collaborates with Choice Financial Group to provide banking services, assuring member FDIC protections up to $250,000.
Key Features
Up to 2-day early direct deposit: With Current, customers can receive their paycheck up to two days earlier with direct deposit, offering superior control over their finances.
Fee-free overdraft protection: Current Account users can take advantage of fee-free overdraft protection, a feature that can safeguard against unexpected charges.
Points earned on debit card swipes for cash back: The Current Account provides added incentives for daily spending, as customers can earn points on debit card swipes that can be redeemed for cash back.
Access to over 40,000 fee-free ATMs: Ensuring easy access to cash nationwide, Current provides its users with over 40,000 fee-free ATMs.
Mobile check deposit: The innovative mobile check deposit feature from Current allows for effortless banking directly from a smartphone.
Current doesn’t just stop at basic features, it goes beyond by offering a range of options that simplify and amplify the banking experience.
Free from minimum balance fees, overdraft fees, bank transfer fees, and in-network ATM withdrawal fees, Current is committed to delivering an uncomplicated and seamless banking experience.
The “Current Pay” feature further enhances the user experience by facilitating instant money transfers among friends and family, simplifying payments or reimbursements.
4. SoFi Checking and Savings Account
SoFi, a modern financial platform offering a suite of financial services, is setting new standards in the world of banking with its online bank account that combines remarkable earning potential and considerable convenience.
Remember that SoFi isn’t a traditional bank but a financial technology company that provides banking services in association with a network of participating banks, all of which are FDIC insured.
Key Features
No account or overdraft fees and no minimum balance: The SoFi Online Bank Account is cost-friendly, with no account fees, overdraft fees, or minimum balance requirements. This makes it an excellent choice for those who want to keep their banking expenses to a minimum.
Potential 2-day early direct deposit: If you set up a direct deposit, SoFi provides the possibility of getting your paycheck up to two days earlier, offering faster access to your money compared to traditional banking establishments.
High-interest earnings: As a SoFi member, you have the opportunity to earn up to 4.20% APY on your savings and Vaults balances, and 1.20% APY on your checking balances. This earning rate is significantly higher than the national average, making your money work harder for you.
No-fee overdraft coverage: SoFi introduces a user-friendly feature covering accidental overspending up to $50 with no fees, given that you have qualifying direct deposits.
Cash back at local establishments: SoFi users can enjoy up to 15% cash back at local establishments when they pay with their SoFi debit card, combining savings with everyday spending.
Increased FDIC insurance: SoFi deposits are insured up to $2M, a feature that provides extra peace of mind when it comes to the security of your funds.
The SoFi Checking and Savings Account is an excellent example of how FinTech firms are providing robust banking solutions that rival and even surpass traditional banks.
The account is particularly attractive to those who frequently use direct deposits and prefer banking digitally, offering superior returns on their balances and protection from various fees.
5. Ally Bank Interest Checking Account
Ally Bank, renowned for its customer-centric digital banking services, provides a comprehensive offering through its Ally Bank Interest Checking Account.
While being an entirely online institution, Ally Bank ensures FDIC insurances up to the maximum allowed by law, bolstering financial security for its customers.
Key Features
Fee-free banking: Ally Bank champions transparency and affordability with no monthly maintenance or overdraft fees, supporting customers in maximizing their financial resources.
Access to 43,000+ no-fee Allpoint® ATMs: With a network of over 43,000 no-fee Allpoint® ATMs, customers enjoy widespread cash access. Plus, Ally reimburses up to $10 per statement cycle for fees charged at other ATMs nationwide.
Spending buckets: This innovative feature helps customers manage their money effectively by setting funds aside for ongoing expenses such as rent and groceries, much like digital envelopes. This encourages better spending habits and gives a clearer picture of personal finances.
Up to 2-day early direct deposit: Offering greater financial flexibility, Ally Bank allows customers to receive their paycheck up to two days sooner with early direct deposit.
Overdraft protection: With the Overdraft Transfer Service and CoverDraft℠ service, Ally provides a dual protection mechanism against accidental overspending, adding to its customer-friendly features.
Manage your debit card: Within Ally’s mobile app, customers can lock their card, set notifications, and limit spending, offering enhanced control over their banking.
Remote check deposit: With Ally eCheck DepositSM, depositing checks is as simple as snapping a photo with your smartphone.
Send and receive money: Through Zelle®, customers can send and receive money quickly, securely, and without the need for an extra app.
The Ally Bank Interest Checking Account provides a robust banking experience, packed with unique features that suit the needs of today’s digitally savvy customers.
It combines the convenience of online banking with the benefits of a comprehensive checking account, delivering unparalleled value.
Furthermore, Ally Bank’s commitment to keeping fees minimal, coupled with its transparent approach, ensures customers can bank confidently and efficiently.
6. Consumers Credit Union Serious Interest Checking
Consumers Credit Union, committed to enhancing its members’ financial prosperity, offers an appealing solution with its Serious Interest Checking®, a high yield checking account.
Despite being a credit union, it combines the benefits of a checking account with an attractive interest rate, making banking rewarding for its members.
Key Features
High-yield earnings: This checking account stands out by offering a whopping 4.00% APY on balances up to $15,000. To qualify for this interest rate, account holders must have 12 posted debit card transactions per month, maintain a $1,000 average daily balance, and establish a minimum recurring monthly direct deposit of $1,000, along with eStatements.
Instant-issue debit card: With the Serious Interest Checking® account, members receive an instant-issue debit card, providing immediate access to their funds.
No debit card usage fees or check deposit fees: In alignment with its member-friendly approach, Consumers Credit Union does not charge fees for debit card usage or for each check deposited.
24-hour online banking and mobile banking app: Offering a seamless digital banking experience, account holders have 24-hour access to online banking and a convenient mobile banking app.
Free online check copies and unlimited check writing: As part of its comprehensive offering, Consumers Credit Union provides free online check copies and allows unlimited check writing, adding to its array of cost-effective features.
Access to 30,000+ fee-free ATMs nationwide: Customers can withdraw cash from over 30,000 fee-free ATMs nationwide, ensuring easy access to their funds.
Competitive interest rates and custom alerts: Apart from competitive interest rates, the account also offers custom alerts for balance and activity, promoting active financial management.
Free eStatements and mobile check deposit: This high yield checking account also features free eStatements and mobile check deposit, further simplifying the banking experience for customers.
The Consumers Credit Union Serious Interest Checking® account blends the convenience of a checking account with the high-yield earnings usually associated with a savings account.
Its feature-rich, value-packed offering makes it a compelling choice for those seeking to elevate their banking experience and maximize their earnings.
7. Quontic High Interest Checking
Quontic Bank, committed to maximizing customer earnings and supporting financial inclusivity, offers a high interest checking account that combines convenience, high-yield potential, and an innovative digital banking experience.
Highly rated by multiple platforms, this account is perfect for those seeking to earn more from their deposits.
Key Features
Earn up to 1.10% APY: The Quontic High Interest Checking account allows you to earn up to 1.10% APY on all balance tiers. To qualify, make at least 10 qualifying debit card point of sale transactions of $10 or more per statement cycle. Failure to meet these requirements results in a 0.01% interest and APY. A minimum opening deposit of $100 is required.
Quontic Pay Ring: In a bid to revolutionize banking, Quontic offers a payment wearable called the Quontic Pay Ring. This innovative feature allows you to make payments effortlessly without needing to carry your debit card.
Access to 90,000+ ATMs nationwide: Enjoy surcharge-free withdrawals at any participating AllPoint® Network ATMs, MoneyPass® Network ATMs, SUM® program ATMs, or Citibank® ATMs located in various retailers across the nation.
Fully mobile & online banking: Quontic offers a dynamic online banking platform and mobile app equipped with features like remote check deposit, bill pay, account transfers, and receipt tracking, providing a seamless banking experience on your terms.
Wide range of pay options: With compatibility for Apple Pay, Google Pay, Samsung Pay, and Zelle, Quontic ensures you have plenty of options to facilitate your payments.
No monthly or overdraft fees: Quontic is committed to transparency and affordability, promising no hidden monthly or overdraft fees.
Member FDIC and advanced security monitoring: As a FDIC-insured institution, Quontic offers robust security features including the ability to lock and unlock your debit card online and protection against unauthorized transactions.
Banking with a purpose: Quontic stands apart by being a Community Development Financial Institution (CDFI), striving to bring the dream of homeownership to low-income families, immigrants, people of color, small business owners, and others who are unable to obtain mortgage financing through traditional lenders.
The Quontic High Interest Checking account combines innovative features, high yield potential, and an inclusive mission, making it a compelling choice for socially conscious individuals seeking to earn more on their deposits.
8. Alliant Credit Union High-Rate Checking
Simplicity and high yields are the cornerstone of Alliant Credit Union’s High-Rate Checking account, a solution tailored to meet the needs of modern-day banking customers, whether they’re on-the-go or prefer traditional banking methods.
Recognized by multiple platforms for its service excellence, this account is designed for customers who desire a seamless and rewarding banking experience.
Key Features
No monthly fee or minimum balance requirement: Alliant Credit Union ensures hassle-free banking with no monthly service fee or monthly minimum balance requirement.
No overdraft fees: Mistakes happen, and Alliant understands this by not charging its customers overdraft fees. However, some standard fees such as stop payment do apply.
Access to 80,000+ fee-free ATMs: Get access to more than 80,000 fee-free ATMs, eliminating the need for ATM hunting. Plus, enjoy up to $20/month in ATM fee rebates for out-of-network ATMs.
Contactless payments and digital wallet compatibility: Pay quickly and securely with your free Visa® contactless debit card or through digital wallets such as Apple Pay™, Samsung Pay™, and Google Pay™, and other payment apps like PayPal, Venmo, and Cash App.
Mobile banking and remote deposit: Manage your finances anywhere, anytime with the Alliant Mobile Banking app, which also allows you to deposit checks remotely.
Free overdraft protection and courtesy pay: Avoid accidental overdrafts with free overdraft protection, and opt-in for Courtesy Pay to cover checks, electronic payments, and transfers beyond your overdraft protection.
Account alerts and card management: Receive alerts for large transactions or unusual account activity, and manage your debit card on-the-go with options to activate or replace a lost/stolen card via Alliant online or mobile banking.
Federally insured and $0 liability on fraudulent charges: Rest assured knowing your deposits are federally insured up to $250,000 by the NCUA, and enjoy Visa’s $0 fraud liability feature, offering protection against unauthorized charges.
To earn interest on your checking account, simply opt for free eStatements and ensure at least one monthly electronic deposit to your Alliant High-Rate Checking account.
The Alliant Credit Union High-Rate Checking account offers simplicity, flexibility, and competitive interest rates, making it a smart choice for your everyday banking needs.
9. Schwab Bank Investor Checking
Charles Schwab brings its robust reputation in the investment sector to banking with its Schwab Bank Investor Checking account, designed for those seeking seamless integration of banking and investing.
This account ensures that your financial management is hassle-free and efficient, encouraging more financial freedom and effective investment.
Key Features
No fees or minimums: Experience the freedom of no maintenance fees or account minimums. This account enables you to focus more on your finances without the worry of hidden charges or minimum balance requirements.
Competitive APY: Enjoy a competitive 0.45% APY on your checking account balance, providing an added benefit of earning interest on your deposited funds.
Unlimited ATM fee rebates worldwide: Travel or live abroad without worrying about ATM fees. Charles Schwab offers unlimited ATM fee rebates worldwide, making accessing your money easier and more affordable.
No foreign transaction fees: Schwab’s account is designed with the international traveler in mind, eliminating foreign transaction fees and making it more convenient and cost-effective for you to use your debit card abroad.
Security and peace of mind: Feel secure with features like card lock/unlock, bank and transaction alerts, and travel notices. These features, combined with the Schwab Security Guarantee, ensure maximum security and control over your financial transactions.
Robust mobile app: Manage all your Schwab banking needs from one place with a feature-rich mobile app. Make deposits, transfer money, and more, with just a few taps on your smartphone.
Mobile payments: Enjoy a secure, convenient, and easy way to pay with your mobile wallet or contactless debit card. This allows for quick and hassle-free transactions, whether you’re shopping online or in-store.
The Schwab Bank Investor Checking account integrates banking and investing, offering convenience, ease, and attractive benefits for the modern user.
Whether you’re an avid traveler or looking for a no-fee, high-yield checking account that also offers excellent digital banking capabilities, this account could be a great fit.
10. Navy Federal Credit Union Free EveryDay Checking
Navy Federal Credit Union’s Free EveryDay Checking is an easy-to-use, accessible banking solution for everyone.
It is ideally suited for those seeking a basic, straightforward account for everyday banking needs, particularly individuals with lower account balances.
Key Features
No monthly service fee or minimums: This account demands no monthly service fees, no opening deposit requirement, and no minimum balance requirement, offering a flexible, low-maintenance banking experience for all users.
Interest-earning: With a 0.01% APY and Dividend Rate, your balance isn’t just sitting—it’s working for you, accumulating dividends over time.
Free debit card with zero liability protection: Your account includes a Navy Federal Debit Card, which is accepted at millions of locations worldwide and comes with zero liability protection for added security.
Digital banking: Navy Federal’s account offers a wide range of digital banking capabilities. This includes Mobile Deposits and Bill Pay, enabling you to manage your finances on the go, securely, and conveniently.
Checking protection options: Protect your checking account from overdrafts and denied transactions with Navy Federal’s Checking Protection Options, ensuring peace of mind and financial stability.
Additional benefits: The Free EveryDay Checking Account also offers free traditional name-only checks, an easy-to-use online ordering system, and automatic notifications to track account activity.
Highly rated: With a 4.7 out of 5 rating based on 142 reviews, Navy Federal’s checking account is highly rated by its customers for its user-friendly features and excellent service.
In addition to these standard features, Navy Federal Credit Union offers comprehensive digital banking tools like mobile banking apps, bill pay services, and convenient transfer and deposit options.
Plus, all members enjoy access to 24/7 customer service and more than 350 branches worldwide. The Free EveryDay Checking Account is a simple, straightforward, and user-friendly option that makes everyday banking a breeze.
What is an online checking account?
An online checking account operates much like the checking accounts you’re accustomed to at traditional brick and mortar banks, with the primary difference being that it’s mostly or entirely digital. They are provided by online banks, credit unions, and even financial technology companies that are not banks themselves.
Online checking accounts have surged in popularity for a variety of reasons. Their major draw is the convenience and flexibility they offer. With these accounts, you can deposit cash, pay bills, transfer money, make debit card purchases, and even deposit checks digitally using the bank’s mobile app. This means that all your transactions can be completed without visiting a physical branch location.
Additionally, online only banks typically offer higher annual percentage yields (APY) than traditional banks, meaning your money grows faster. The absence of physical branches translates into reduced overhead costs for these financial institutions, enabling them to pass on the savings to customers in the form of higher interest rates and lower fees. These accounts also often have lower minimum balance requirements and monthly maintenance fees compared to their brick-and-mortar counterparts.
Lastly, many online banks are insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA), providing the same level of safety for your deposits as traditional banks.
Criteria for Evaluation
Selecting the best online checking accounts was not a task taken lightly. We’ve considered a variety of factors in our analysis to ensure that our picks provide a mix of the most advantageous features for diverse financial needs. Here are the key criteria we used in our evaluation:
Annual percentage yield (APY): We considered the APY offered on the checking accounts. Higher APY means your money grows faster, making it a key feature to look for in an account.
Monthly fees and other costs: Monthly maintenance fees can eat into your savings. We favored accounts with low or no monthly fees. We also looked at other potential costs like overdraft fees, out of network ATM fees, and foreign transaction fees.
ATM access: Easy and wide-ranging access to ATMs is crucial. We considered online banks with large ATM networks and those that offer ATM fee reimbursements.
Customer service: Exceptional customer service is important, especially for an online only bank where in-person assistance is not an option. We assessed the quality of customer service provided by each bank.
Mobile app experience: A great mobile app can make managing your money a breeze. We evaluated the usability, functionality, and reliability of each bank’s mobile app.
Additional features: Other features like early direct deposit, mobile check deposits, cash back rewards, and savings tools can add value to online checking accounts. We considered these additional features in our review.
How to Choose the Right Online Checking Account for You
Choosing the right online checking account is crucial. It can simplify your financial management, enhance your monetary gains, and align with your lifestyle needs. Below are key factors to consider in making an informed decision:
Financial Habits: Evaluate your typical financial behaviors. Do you frequently use ATMs, and will you need access to an extensive, fee-free ATM network? If you regularly maintain a high balance in your checking account, an interest-earning account could be beneficial. Conversely, if you tend to keep a low balance, consider an account with no minimum balance requirement to avoid potential fees.
Goals: What are your financial goals? If you’re aiming to save, consider an account that earns interest. If you’re focused on investing, select an institution that offers seamless integration between checking and investment accounts.
Lifestyle: Assess your lifestyle and daily needs. Do you travel often and need an account that doesn’t charge foreign transaction fees? If you prefer digital banking, look for accounts with robust online platforms and mobile apps that allow for easy money management on the go.
Fees: Examine the fee structure carefully. Consider potential monthly maintenance fees, overdraft fees, and ATM fees. Look for accounts offering fee waivers or reimbursements.
Customer Service: Exceptional customer service is crucial, particularly for an online bank. Look for 24/7 customer support, availability of live chat, and timely response to queries.
Security: Ensure that the bank employs stringent security measures to protect your account from fraud or unauthorized transactions. Features like two-factor authentication, alerts for suspicious activity, and FDIC insurance are vital.
Bottom Line
In today’s fast-paced, digital age, online checking accounts provide a convenient, accessible, and often more financially rewarding alternative to traditional banking. However, the key to making the most of these benefits is to choose the right account based on your individual needs, lifestyle, and financial goals.
By carefully considering factors like your financial habits, goals, lifestyle, potential fees, customer service, and security measures, you can find an online checking account that not only meets but exceeds your expectations. Remember, your checking account is at the heart of your financial life – choose wisely.
Frequently Asked Questions
Are online checking accounts safe?
Yes, online checking accounts are safe as long as they’re offered by a reputable bank or credit union that has FDIC or NCUA insurance. This insurance protects your money up to $250,000 per depositor.
Can I deposit cash into an online checking account?
Depositing cash into an online checking account can be more challenging than with a traditional bank. Some online banks have agreements with certain ATM networks or retail outlets where you can deposit cash. You can also deposit cash into a traditional bank account and then transfer it to your online account.
What should I do if I need to write a check?
Many online banks offer free or low-cost checkbooks. However, if you seldom write checks, you may not need a physical checkbook. Instead, you can use the bank’s online bill pay service, which sends a check or electronic payment to the recipient on your behalf.
Do online banks offer customer service?
Yes, most online banks offer robust customer service options, including phone support, live chat, email, and often extensive FAQ sections on their websites. Some even offer 24/7 support.
It’s tough out there for first-time homebuyers. They’re facing multiple challenges, including rising mortgage rates, high home prices and limited inventory. However, that doesn’t seem to scare off young Americans — in fact, 71.5% of Gen Zers plan to buy their first home in the next one to six years, according to a Rocket Mortgage survey from earlier this year.
At the same time, not every Gen Zer knows what mortgage lenders are looking at when evaluating a home loan application. On average, 33.9% of Gen-Z were wrong about the factors lenders consider when deciding whether to approve a mortgage, according to the survey.
What most mortgage lenders look at when considering your application
CNBC Select explains what factors influence mortgage approval and what young people can do to increase their chances of qualifying for a home loan.
Credit score
Most Gen Zers know that their credit score can impact their ability to secure a mortgage (73.2%). And while they’ve had less time to establish a credit history, Gen Zers have an average FICO score of 679 according to the latest data from Experian. That’s lower than that of older generations but still considered good.
The minimum credit score to qualify for a conventional mortgage is 620. Government-backed mortgages have more relaxed credit requirements. The minimum credit score for an FHA loan is 580 with a down payment of 3.5% or as low as 500 if you can put at least 10% down. USDA and VA loans don’t have set credit requirements, but lenders that offer them might.
Besides approval chances, a homebuyer’s credit affects the interest rate on the loan. A small difference in interest rates can add hundreds of dollars to a monthly mortgage payment.
It’s best to work on building credit before applying for a mortgage. Free credit monitoring services such as CreditWise® from Capital One and Experian free credit monitoring can be helpful in tracking progress and finding opportunities to improve.
CreditWise® from Capital One
Information about CreditWise has been collected independently by Select and has not been reviewed or provided by Capital One prior to publication.
Cost
Credit bureaus monitored
TransUnion and Experian
Credit scoring model used
VantageScore
Dark web scan
Identity insurance
Terms apply.
Experian Dark Web Scan + Credit Monitoring
On Experian’s secure site
Cost
Credit bureaus monitored
Credit scoring model used
Dark web scan
Yes, one-time only
Identity insurance
Terms apply.
Note that the scores credit monitoring services offer differ slightly from the scores mortgage lenders use when making their decisions. That said, they should be pretty close and provide a good idea of your overall credit health.
Debt-to-income ratio (DTI)
Almost one-third of Gen-Z didn’t name the debt-to-income ratio (DTI) as one of the factors affecting mortgage approval (32.8%). In reality, lenders evaluate this closely when determining whether to approve a mortgage and what the terms of the loan will be.
DTI is the amount of debt relative to income. To qualify for a conventional mortgage, you don’t want a DTI any higher than 43%. For USDA and VA loans, the DTI limit is typically 41%, while the FHA might allow you to go up to 50%. Remember, these are guidelines — it’s up to individual lenders to determine the cutoff for what’s an acceptable number.
Calculating your DTI
To calculate your DTI, divide your total monthly bills, such as rent and any debt payments, by your gross monthly income (how much you make before taxes).
For example, let’s say your monthly bills total $2,500 and your gross monthly earnings are $5,000.
$2,500 / $5,000 = 0.5
Multiply the result by 100 to get the percentage. In this case, your DTI would be 50%.
Down payment
When a homebuyer makes a sizeable down payment, the lender may consider them a less risky borrower. Having more money to put down increases the chance of mortgage approval and can lower the monthly mortgage payment.
According to the survey, 10.1% of Gen-Z plan to put down 20% of their home price. If they do, they’ll start off with a good amount of equity in their home and won’t have to worry about private mortgage insurance (PMI). PMI is a monthly fee rolled into the mortgage payment, designed to protect the lender if the borrower can’t pay their home loan.
That said, it’s possible to secure a mortgage without a 20% down payment. In fact, FHA loans require as little as 3.5% down with a credit score of at least 580. Qualified first-time homebuyers can also put 3% down with conventional mortgages, such as HomeReady and Home Possible. USDA and VA loans have no down payment requirement at all.
Saving up for a down payment can take some time — often, several years. Putting the funds in a high-yield savings account can help them grow a little faster. Some of CNBC Select’s favorite accounts include LendingClub High-Yield Savings and the Western Alliance Bank Savings Account for their high APYs and ease of use.
LendingClub High-Yield Savings
LendingClub Bank, N.A., Member FDIC
Annual Percentage Yield (APY)
Minimum balance
No minimum balance requirement after $100.00 to open the account
Monthly fee
Maximum transactions
Excessive transactions fee
Overdraft fees
Offer checking account?
Offer ATM card?
Western Alliance Bank Savings Account
Western Alliance Bank is a Member FDIC.
Annual Percentage Yield (APY)
Minimum balance
$1 minimum deposit
Monthly fee
Maximum transactions
Up to 6 transactions each month
Excessive transactions fee
The bank may charge fees for non-sufficient funds
Overdraft fee
The bank may charge fees for overdrafts
Offer checking account?
Offer ATM card?
Terms apply.
Employment
Current employment, as well as work history, are also factors in mortgage lending decisions. It’s not uncommon for a lender to require two years of consistent employment history. Note that it doesn’t necessarily mean working for the same company. More likely, the lender will be looking to see whether the borrower has been employed in the same line of work or career field and if there are any lengthy gaps without a job.
Showing this kind of consistency can be tricky for Gen Zers who have only just started building their careers. However, as long as the homebuyer can prove they have a stable income and are a responsible borrower, the lack of two years of work history might be something a lender can live with.
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How Gen-Z can prepare for a mortgage application
While mortgage lenders generally examine the same things when evaluating an application, they might not always agree on what’s an acceptable risk. Individual lenders also may offer different types of home loans, work with different down payment assistance programs or even have their own unique offers for first-time homebuyers.
For that reason, it’s wise to speak to several lenders before choosing one. Plus, this will also allow for interest rate shopping, which is essential to securing the best possible mortgage terms.
CNBC Select picked PNC Bank as one of the best lenders for first-time homebuyers, thanks to the variety of home loan options they can offer. Rocket Mortgage can be a good choice for borrowers with lower credit scores, and Ally Bank Mortgage can help new homebuyers save on lender fees.
PNC Bank
Annual Percentage Rate (APR)
Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
Types of loans
Conventional loans, FHA loans, VA loans, USDA loans, jumbo loans, HELOCs, Community Loan and Medical Professional Loan
Terms
10 – 30 years
Credit needed
Minimum down payment
0% if moving forward with a USDA loan
Terms apply.
Ally Bank Mortgage
Annual Percentage Rate (APR)
Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
Types of loans
Conventional loans, HomeReady loan and Jumbo loans
Terms
15 – 30 years
Credit needed
Minimum down payment
3% if moving forward with a HomeReady loan
Terms apply.
Bottom line
Gen-Z are entering a challenging housing market, but many feel up for the task and plan to buy a home in the next few years. Homeownership can be an excellent way to build wealth, but before springing into action, it’s a good idea to educate yourself on what impacts mortgage lending decisions and get your financial ducks in order based on what you’ve learned.
Catch up on CNBC Select’s in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and Twitter to stay up to date
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
There are literally thousands of legitimate checking accounts to choose from, and more spring into being all the time as online banks emerge and grow. There’s no way you can evaluate them all.
If you’re under age 25 and don’t care about loading up on potentially generous features, you can safely narrow your search by limiting your choices to basic checking accounts built for young, unfussy people. One account that should still be among those choices is the BMO Harris Smart Money™ Account.
The BMO Harris Smart Money Account has no monthly maintenance fee for users under 25 and relatively few other account fees. It comes with a Mastercard debit card accepted by millions of merchants worldwide. And it could be right for you — but be sure you understand its capabilities and limitations before opening an account.
What Is the BMO Harris Smart Money Account?
The BMO Harris Smart Money Account is a basic checking account designed for younger people and those seeking the peace of mind that comes with fee-free overdraft protection.
Smart Money has no monthly maintenance fee for anyone under 25 and no overdraft fees for anyone. Otherwise, it has the same basic features as BMO Harris’s two other consumer checking accounts — Advantage and Premier — including a vast fee-free ATM network, a robust mobile app, and no ongoing minimum balance requirement.
What Sets the BMO Harris Smart Money Account Apart?
The BMO Harris Smart Money Account stands out from competing checking accounts in a few key ways:
No overdraft fees. Smart Money has no overdraft fees. This is less generous than it sounds because BMO declines most Smart Money transactions that would result in an overdraft. Still, BMO may allow some transactions to go through even if they result in a negative balance. If and when it does, there’s no charge.
No maintenance fee for younger users. Smart Money has no monthly maintenance fee for users under 25. It qualifies as a free checking account for younger folks.
No way for older users to waive the maintenance fee. Smart Money does have a maintenance fee ($5 per month) for users 25 and older. This is low as checking account maintenance fees go. But it’s also unusual (in a bad way) because there’s no way to waive it. Most checking accounts waive maintenance fees if you maintain a minimum balance or incoming direct deposit.
Key Features of the BMO Harris Smart Money Account
The BMO Harris Smart Money Account is a straightforward checking account for people who don’t need many bells and whistles.
Age Restrictions
Smart Money has no official age restrictions. Kids under age 18 can open an account with a parent as a joint owner, and anyone 18 or older can open an account as the sole owner.
However, Smart Money does make an important distinction between account holders under age 25 and those 25 and older. While there’s no monthly maintenance fee for users under age 25, users 25 and over must pay a $5 monthly maintenance fee. There’s no way to waive this fee, either.
Minimum Deposit & Balance
The minimum deposit to open this account is $25. Once opened, there’s no ongoing minimum balance.
ATM Network
BMO Harris belongs to the Allpoint ATM network, which has more than 40,000 fee-free ATMs across the United States. These ATMs are relatively evenly distributed across the country, including in many locations where BMO Harris has no physical branches.
Smart Money doesn’t reimburse out-of-network ATM fees, however. Be sure to use Allpoint ATMs to the extent possible.
Possible Account Fees
Smart Money has no maintenance fee for users under 25 and an unwaivable $5 maintenance fee for users 25 and older. It has no overdraft fee for any users, though BMO Harris declines most transactions that would result in a negative balance.
Other possible fees include:
A $2 paper statement fee per month
A $3 fee for each out-of-network ATM transaction
A $3 fee for each check image if you’re not opted into paperless statements
Mobile Features
Smart Money users get access to BMO Harris’s user-friendly mobile app. Notable capabilities include:
No BMO user fees for person-to-person Zelle transfers (though other fees may apply)
Free mobile check deposit
Free budgeting and expense-tracking tools
A single view of all your BMO accounts, including bank accounts and credit cards
Advantages
Like the account itself, Smart Money’s advantages are straightforward: no maintenance fees for younger users, no ATM fees if you stay in-network, and excellent mobile features, to name a few.
No monthly maintenance fee for younger users. BMO waives the $5 monthly fee for account holders under age 25. That makes Smart Money an appealing choice for college students and recent college graduates.
No overdraft fees. Though it declines most transactions that would result in negative balances, BMO waives overdraft fees and insufficient funds fees for such transactions anyway. If it allows negative-balance transactions to go through at its discretion, it still doesn’t charge an overdraft fee.
Big fee-free ATM network. As part of the Allpoint ATM network, BMO Harris has more than 40,000 fee-free ATMs in the United States. You can find these machines in every corner of the country, including places far from any physical BMO Harris branches.
Excellent mobile features. BMO Harris has a comprehensive, user-friendly mobile app with useful, time-saving features like mobile check deposit and Zelle transfers.
Disadvantages
Smart Money’s biggest downsides include an unavoidable monthly fee after age 25, unavoidable ATM fees outside the Allpoint network, and no sign-up bonus for new account holders.
No sign-up bonus. Unlike the BMO Harris Premier Account and the BMO Harris Smart Advantage Checking Account, the BMO Harris Smart Money Account has no sign-up bonus for new account holders. If you’re looking to pad your balance early on, consider one of those instead.
Can’t waive the monthly fee after age 25. Most checking accounts offer a way around their monthly maintenance fees, and sometimes several. Often, maintaining a minimum balance of a few thousand dollars or receiving a recurring direct deposit does the trick. Smart Money is different — in a bad way. There’s no way to waive the $5 monthly fee after you turn $25.
No out-of-network ATM fee reimbursement. Smart Money doesn’t reimburse out-of-network ATM transaction fees. These can really add up, so if you expect to use non-Allpoint ATMs often, consider an account with a more generous reimbursement allowance.
How the BMO Harris Smart Money Account Stacks Up
The BMO Harris Smart Money Account is one of three BMO checking accounts. Before you open yours, see how it compares to the highest-end account in the BMO family: BMO Harris Premier.
BMO Harris Smart Money
BMO Harris Premier
Monthly Maintenance Fee
$5, limited waiver only
$25, but can be waived
Waiver Requirements
Only waived if you’re under 25
Yes, required $10,000+ balance
Overdraft Fee
$0
$0
ATM Fee Reimbursement
None
Up to $25 per month
Credit Card Benefits
None
Up to $75 in quarterly spending bonuses
Mortgage Benefits
None
Closing cost and interest rate discounts
Interest on Balances
None
0.01% APY
Final Word
If you’re a college student or recent college graduate looking for a basic checking account that lets you spend as you please, wherever you please, the BMO Harris Smart Money™ Account makes sense for you.
Just don’t expect Smart Money to be anything more than it claims. With no sign-up bonus or perks beyond fee-free in-network ATM withdrawals, it’s not a lifelong checking account. Better to use it as you work to build your net worth, then trade up to a more generous product — whether with BMO or another bank of your choice.
The Verdict
Our rating
BMO Harris Smart Money™ Account
The BMO Harris Smart Money Account is a no-frills bank account with few fees and an above-average mobile experience. It’s ideal for people under age 25, who pay no monthly maintenance fee no matter what.
Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.
Is saving for retirement important? Some people think so. But, if you love spending all of your money on things you want right now, like lavish vacations and designer clothing, then maybe learning how to save money for retirement isn’t for you.
Just kidding, that’s horrible advice.
Your future is very important and you can significantly damage it if you are only thinking about the present.
Let me tell you again, saving for retirement is extremely important. If you keep putting it off, it’s only going to get harder, and it’ll most likely add a lot of stress to your life.
Even though prioritizing your future is important, the average person is behind when it comes to saving for retirement.
Saving for retirement now is important for many reasons, such as:
It can help make sure you aren’t working for the rest of your life.
You can retire sooner rather than later.
You can lead a good life well after you finish working.
Compound interest means the earlier you save the more you earn.
You won’t have to rely on your children or others in order to survive.
As you can see, saving for retirement is very important.
However, according to a survey done by GoBankingRates, 56% of Americans have less than an average of $10,000 in retirement savings and 33% have no retirement savings at all.
This is a very scary statistic, and the image below illustrates is further.
Related:
Other interesting statistics found in this survey include:
42% of millennials have not begun saving for retirement.
52% of Gen Xers have less than $10,000 in retirement savings.
About 30% of respondents age 55 and over have no retirement savings.
26% report retirement savings with balances under $50,000, an insufficient amount for people nearing retirement age.
Nearly 75% of Americans over 40 are behind on saving for retirement.
These statistics terrify me.
And, it isn’t just young people without retirement savings, because as you can see around 30% of respondents age 55 and over have no retirement savings.
That is a lot of people who are close to or at retirement age with very little retirement savings!
So, why is this?
Why aren’t people saving for retirement?
They’re trusting ridiculous articles about not saving for retirement.
Sadly, there are many articles that say it’s okay to not save when you’re young.
However, you should never listen to a person telling you not to save money for retirement. Or perhaps, people are just agreeing with these ridiculous articles because it makes them feel better about how they aren’t saving for retirement?
Whatever the reason may be, everyone needs to face their fears and build their retirement savings.
I have read countless articles, such as If You Have Savings In Your 20s, You’re Doing Something Wrong, that tell people not to save money. I’ve even had people tell me that I’m not living the way I should because I’m saving for retirement.
I really hope no one is listening to this kind of advice, because there are so many reasons to start saving for retirement as early as you can. I don’t think I’ve ever heard someone say “I regret all that money I saved when I was younger.”
In fact, it’s usually the exact opposite.
You should start saving as much money as you can, as soon as you can, because it’ll help you be better prepared for the future.
Many people believe that 5% is enough to save.
There are a lot of people that think saving between 1% and 5% of their income is enough in order to be on track for retirement.
Sadly, that most likely won’t be enough to retire.
Instead, you should watch your spending now and/or find ways to make more money, so that you can start saving for retirement.
By spending less money, you’ll decrease the amount of money you need for the future, including money for emergency funds, retirement, and more.
Just think about it: If you are currently living a frugal lifestyle, then you will be used to living on less in the future. This means that your retirement savings doesn’t need to be as large, which means it may be easier to reach that savings goal.
According to the U.S. Bureau of Economic Analysis, the personal savings rate has averaged around 5% in the past year, and averaged 8.33% from 1959 until 2016.
While 5% is better than nothing, even just one small emergency each year could easily and completely wipe out that savings.
Further, saving just 5% means it will take you a very long time to retire. Mr. Money Mustache has a great graphic in his blog post The Shockingly Simple Math Behind Early Retirement that shows you how your savings rate can dramatically impact when you’ll retire. For example:
With just a 5% savings rate, it would take you 66 working years until you reached retirement.
A 25% savings rate means that it would take you 32 working years to retire.
A 50% savings rate means that it would take you 17 working years to retire.
A 75% savings rate means that it would take you 7 working years to retire.
So, by saving more of your money, you are likely to retire sooner. Sounds amazing, right?
Related: Do You Know Your Net Worth?
A lot of people don’t understand compound interest.
Saving for retirement as soon as you can is a great thing, especially because of the power of compound interest.
With compound interest, time is on your side- meaning you should start saving money as early as you can.
Compound interest is when your interest is earning interest. This can turn the amount of money you have saved into a much larger amount years later.
This is important to note because $100 today will not be worth $100 in the future if you just let it sit under a mattress or in a checking account. However, if you invest through your retirement account, then you can actually turn your $100 into something more. When you invest, your money is working for you and growing your savings.
For example: If you put $1,000 into a retirement account with an annual 8% return, 40 years later you will have $21,724. If you started with that same $1,000 and put an extra $1,000 in it for the next 40 years at an annual 8% return, that would then turn into $301,505. If you started with $10,000 and put an extra $10,000 in it for the next 40 years at an annual 8% return, that would grow into $3,015,055.
Side note: I recommend you check out Personal Capital if you are interested in gaining control of your financial situation. Personal Capital is similar to Mint.com, but much better. Personal Capital is free and it allows you to aggregate your financial accounts so that you can easily see your whole financial situation, including investments.
Some think it’s normal to not have retirement savings.
Many people normalize their debt or low savings rate (or even lack thereof) because they assume others aren’t doing so well either.
Well, why would you want to be normal, especially when it comes to saving money?
You should always strive to do your best as sometimes “average” is not good enough for you to live a financially successful life. Keep in mind that the average person is not the greatest with money, and many are wrecked with stress and hardship due to their unfortunate financial situation.
Just because the average person has a low average savings amount doesn’t mean that you have to be in that same financial situation. Instead, you should be in control of your own life!
If you want to be even better than the average, I highly recommend reading The Average Net Worth For The Above Average Person on the Financial Samurai website. It is an excellent article that can motivate you to improve your finances.
According to Financial Samurai, the average net worth of the above average person is:
Remember, striving to be above average means you can take control of your financial situation, retire on time or even early, and live a happier life.
People think that saving for retirement means you won’t have fun.
As you all know, I really dislike the myth that people who save money are boring. That’s not true at all.
I believe that you can find a balance while living a good life and saving a comfortable amount of money.
There are plenty of ways to live an awesome life while saving money and budgeting realistically. Yes, you can still see your friends, have fun with your loved ones, go on vacations, and more.
Here’s a list of some early retirees who are leading great lives. I definitely recommend reading about them:
If you want to learn how to save for retirement, then learning how to be happy with yourself and figuring out affordable ways to enjoy life are key.
Related article: How To Have Frugal Fun
Women are 27% more likely than men to have no retirement savings.
In fact, 63% of women say they have less than $10,000 saved for retirement to NO savings for retirement at all, which compares to 52% of men in the same situation.
To change this money statistic, please read The Smart Woman’s Guide To Investing Success. Here’s a quick snippet from that blog post:
“Women face different obstacles than men do when it comes to investing in the stock market. Right off the bat, they tend to have less in savings because women often take time off to raise children. With years of not earning a salary, there is no money being saved and compounded upon.
In addition to this, women typically outlive men by close to 10 years on average. Therefore, it is important as a woman to invest in the stock market.”
Some people think they don’t need to save yet.
Instead of thinking that you’re invincible and that you have all the time in the world to improve your finances, you should stop procrastinating and learn how to build your wealth now.
Many people push things off and/or spend their money carelessly because they think they can start tomorrow, next month, and so on. However, for everyday that you push off saving for retirement, the further away and harder you’ll have to work towards your goal.
Stop wasting time and take control of your financial situation now.
Read Why Saving Money In Your 20s Is A Good Idea to learn more.
Many think their income will never end.
Yes, there are many different types of jobs and your income potential is pretty much unlimited. However, you never know how long you’ll be making money, whether you’ll come across medical issues, or how long your job will last.
You might be thinking “But I enjoy my job!”
While it’s great to love your job, you should still be saving for retirement. I have heard far too many people say they don’t need to build their retirement savings account because they love their job enough to just work forever and still be happy.
However, what happens when you can no longer work? You don’t know what the future will bring. You may encounter a medical problem, a serious life event, you may hate your job 20 years from now, and so on.
Remember, nothing is guaranteed.
So, instead of spending every last penny, you should find ways to start saving for retirement.
What you need to do to jump start saving for retirement.
The sooner you start saving, the sooner it will become a habit. By saving for retirement now, you will learn good retirement savings practices that will help you well into the future.
I always say that the first step to investing is to just jump in. However, what if you don’t even know how to start investing and saving for retirement?
If you are like many who don’t know how to begin, here are the easy steps to start saving for retirement:
Start saving your money. In order to invest your money, you need to start setting aside money specifically for it. The amount of money you save for investing is entirely up to you, but in general, the more the better.
Do your research. Before you start dumping your money into the stock market and other investments, it’s a good idea to know what you’re putting your money towards. Researching various investment-related tips will help you become more informed about your investing decisions, which only means you will make better decisions well into the future.
Find an online brokerage or someone to manage your investments. There are two main ways to invest your money- yourself through a brokerage or you can find someone to manage your investment portfolio for you. You will need to chose one of these options to actually start investing your money. Personally, I like to do everything myself through Vanguard.
Decide how you will invest. How you invest depends on your risk tolerance, the time period for which you are investing (when will you retire?), and more. Generally, the sooner you need your funds the less risk you will take on, whereas the longer your time period is, then the more risk you may be willing to take.
Track your investment portfolio. This is important because you may eventually have to change what you are invested in, put more money towards your investments, and so on.
Continue the steps above over and over again. To invest for years and years to come, you will want to continue the steps above over and over again. Now that you know the steps it takes to invest your money, it only gets easier.
As you can see, saving for retirement isn’t impossible. By starting now, you’ll set yourself up for a much better future.
Have you started saving for retirement? Why or why not?
This guest post from Corinne is part of the “reader stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks with all levels of financial maturity and income.
At my previous job, I was paid on a monthly basis. I loved it. I got all my money for the month upfront, so it didn’t matter when I scheduled automatic savings or investment transfers.
When I moved to a job that was on a bi-weekly payroll schedule, I had to make sure the transfers were split across the month so I didn’t inadvertently empty my checking account! I was grumpy about it at first, but I’ve come to discover a wonderful secret about getting paid bi-weekly: If you’re on a biweekly payroll schedule, you’re getting a couple of “bonus” pay checks every year! Yes, that’s right. Bonus checks. Let me explain.
The Bonus of Bi-Weekly Pay
If you’re like me, your budget is constructed around a month’s worth of expenses. Most bills are monthly, rent or mortgage payments are monthly, and I’m betting you plan your grocery spending by how much to spend in a month. Maybe someone budgets by quarter or even by year, but not many people do.
So in any given month, you can expect to bring home two paychecks. Let’s say you take home $1000 with each check. Your budget allocates how to spend $2000 every month.
But wait a minute. Are you paid bi-weekly? If you look at a calendar, you’ll find that in some months, you actually receive three paychecks. Don’t believe me? Have a look at March. Say you get paid every two weeks on Friday. If your first check came on the 2nd, your next came on the 16th, and the third was on the 30th. All your expenses have been entirely covered by the first two checks; this is the amount of money you planned on receiving. The third is pure gravy!
Assuming you’re not living paycheck to paycheck and have enough of a buffer in your primary savings account, this is a huge opportunity to hit your some of your financial goals hard.
Putting the Bonus to Work
What might you do with this “bonus” money? The possibilities are endless, of course. Here are just a few suggestions:
Fund a holiday account. I don’t have any consumer debt and I invest regularly anyway, so this is my personal favorite. With my first “bonus” check, I grab $500 and stick it in a ING savings account called “Christmas Fund.” When the most wonderful time of the year comes around, I can enjoy it and not worry about all the money I’m spending; it was allocated for that purpose long ago.
Pay off high interest debt. If you’re carrying credit card debt, you can use your bonus check to make a serious dent in it (or perhaps pay it off entirely!). This is a brilliant way to spend your bonus money; you get an automatic return of whatever interest rate you’re paying.
Make an extra mortgage payment. I’m a renter in Brooklyn, so I know very little about mortgages! However, I have read that making one extra mortgage payment a year is supposed have a great impact on the overall amount you spend to pay off your mortgage. Maybe you’ve thought about doing this before, but wondered how to find the extra money to do it. Using your “bonus” check makes it completely painless.
Max out your IRA. If you’ve got extra room in your Roth IRA or traditional IRA, why not max it out with your “bonus” money? Remember, you’ve got until 4/17/2012 to contribute to your 2011 IRA. The limits are $5,000 if you’re younger than 50 and $6,000 if you’re older than 50. If you don’t have an IRA yet, then start one with your “bonus” money!
Start (or contribute to) an emergency fund. If you don’t yet have an emergency fund, start one with this “bonus” check. You’ll immediately have half a month’s expenses covered. In fact, you could build your emergency fund entirely through “bonus” checks. If you get two “bonus” checks a year, in three years time you’ll have a three month emergency fund. Not bad for pretty much no effort!
Treat yourself! After regularly reading about personal finance for three years, I’ve become pretty good with money. In fact, I might be frugal to a fault. If you’re like me, you might want to use your “bonus” check as an opportunity to enjoy life. Take a spur of the moment trip, go out to that expensive restaurant you’ve been drooling over for years, or buy thoughtful gifts for your loved ones. I’m thinking about using some “bonus” money to go on a hot air balloon ride for my birthday!
Naturally, you’ll want to spend your “bonus” money in the best way possible for you and that depends on your own unique circumstances. So, what are you doing with your “bonus” money?