Have you ever thought about how your bank can help you save? Your bank is the financial institution that you deal with the most often, and the business that handles your money. Your bank has a vested interest in helping you save because if you do save, you will be able to do more business with them. Your bank also offers many financial services that you may not normally associate with banking, but if you can save money by using them, why not do so. You’ve already trusted them with your money.
One way that your bank can help you save is with the various types of savings accounts and savings instruments they have available. These include traditional savings accounts, interest bearing checking accounts, money market accounts, treasury notes, government bonds, and certificates of deposit. Additionally many banks have an affiliated securities division that can help you with equity stocks, mutual funds, real estate and utilities funds, and other items you’d normally go to a stockbroker or financial analyst for. In fact, many banks have a financial analyst on staff to help you save.
Your bank also has individual retirement accounts available, also called IRA’s. These IRA’s come in two types, traditional and Roth. With a traditional IRA you put money aside for retirement and don’t pay taxes n that money until you retire. The idea is that you’ll be in a lower tax bracket when you retire, and that the money will grow faster, compounding interest without a tax burden every year. A Roth IRA is similar but you put after tax dollars into it. This is money you’ve already paid taxes on, and you next again have to pay taxes on this money, or on any of the interest it earns, which helps you save a tremendous amount of money over time. Also for self employed people a bank can offer an SEP or simplified employee pension plan. For a corporation a bank can manage a 401(k) savings plan for employees.
Your bank may be able to help you save in other ways too. When you are looking for a house loan your bank may be the best place to find a mortgage. Also your bank may offer insurance at a good rate. This can be life insurance, health, and even auto and home owners insurance. In recent years the lines have blurred between insurance companies, banks, and other financial institutions. Just as the phone company gets into the internet business and the cable TV business, while the cable company offers phone service, banks and insurance companies and financial planners are into each other’s businesses as well. That can benefit you because increased competition means better savings for consumers. It is possible that your bank could become your one stop shop for all financial needs. A place to get a mortgage, a checking account, a car loan, a credit card, buy mutual funds, get life insurance and take care of your retirement planning. That would make your bank a very convenient place indeed.