Banks are always looking for ways to make their customers’ lives easier. In fact, financial institutions are so committed to making banking so easy that they’ve invented new tools and services just for their customers.
While this might not seem like a big deal at first glance—after all, we’re talking about banks here—it is pretty exciting news if you’re a saver.
In this post, we’ll cover 5 ways modern banks make saving easier by offering various highly beneficial digital banking features.
1. Recurring deposits
Recurring deposits are a great way to save money. They allow you to set up a regular payment plan with your bank so you can transfer money from your checking account into a savings account regularly.
Setting up recurring deposits into your savings account is great if you have bills or other expenses you need to pay from your primary, non-savings account. You can also set up regular recurring deposits to an emergency fund.
You can make recurring deposits in electronic form and withdraw those funds when needed. Some banks offer regular automatic deposits, so it’s easy to set one up with their bank account.
The amount deposited can be fixed or variable, which means using the same payment plan for all years of your agreement with the bank (e.g., quarterly). The deposit schedule can also vary depending on the time used (weekly vs. monthly).
2. Savings automation
Automation is a way of saving money by making it easier to set aside money for savings. Automation can help with savings goals, such as paying off debt or saving for retirement.
Automation can make savings deposits more efficient and easier on your bank balance. For example, let’s say you want to save to pay down your monthly credit card balance without worrying about missing a payment deadline. Automation could help you do this automatically, thus helping you avoid late fees or other consequences related to missing a deadline (e.g., late charges).
3. Online and mobile app banking instead of branch visits
In the past, most people had to visit a bank branch and deposit their money in person. The experience is still common today, but many customers now prefer to make deposits through their mobile phone app or online banking platform.
Branch visits can be more expensive than an ATM or online banking service because of the cost of staff time and security measures needed for depositing large amounts of cash at once. However, face-to-face interaction with your banker is essential to building trust between you and your financial institution; therefore, it helps ensure that you always have access when you need it most.
4. Using vaults or pots to store savings within a bank account
Modern financial institutions like TransferWise use a vault or pot-like deposit boxes to store savings within a bank account, thus allowing you to park your cash in a “savings” pot.
Vaults are a type of savings account used by businesses and people who want more control over how much money they save. Vaults are common among people with a lot of money to invest — they want to ensure they keep their money safe in case something happens.
Pots are another way banks make saving easier when you start a bank account. Pots allow you to make regular deposits into your account and earn interest. You can also withdraw or transfer the money at any time.
Pots are great for people who want to track their savings progress but want to avoid dealing with all the paperwork involved with opening a vault account or pot account.
5. Financial Coaching
Coaching might be the answer if you’re looking for a way to boost your savings.
Coaching is a one-on-one service that can help you set financial goals and reach them, and today, most banks have this service, either upon request, to specific banking members or a core account feature.
In addition to helping you make good financial decisions, the financial coaching offered by most good banks can help you set a saving goal and align your financial spending with this goal.
Other banks have financial literacy programs that can make it easier to stick to a budget by teaching you how to save and make more money.
Conclusion
While it’s still not easy to save money and build a nest egg, the modern bank is working hard to make saving easier. Now that you know what they’re doing, it’s time for you to step up your game.
