Beyond Banking: How Building a Relationship with Your Financial Institution Benefits You

From GreenPath.com, July 29, 2024 — Author: Tara Spicer

For most of us, the relationship we have with our financial institution feels purely transactional — depositing paychecks, withdrawing cash, and managing bills online in the space of a few clicks. However, forming a deeper relationship with your bank or credit union can unlock benefits that go beyond simple transactions.

When you take the time to establish a relationship with your financial institution, you signal your willingness to engage in a two-way dialogue. This can lead to more personalized service, tailored financial advice, and opportunities for financial growth.

📚 Tap Into Educational Resources

One of the key benefits of building a relationship with your financial institution? Access to valuable educational resources. Many banks and credit unions offer free workshops, webinars, and one-on-one consultations designed to help you strategize short- and long-term goals.

A free online workshop on building credit could be invaluable if you’re looking to purchase a home or a vehicle in the coming months. Schedule a meeting with a financial advisor at your institution to discuss your plans and see how they can support you.

💸 Optimize Your Spending & Savings

✅ Checking

Think beyond basic checking accounts and explore options offering rewards or dividends. Some checking accounts offer cashback on purchases, meaning you earn a percentage of your spending back as a reward.

This can be advantageous if you make frequent purchases using your debit card. For example, a checking account with 1% cashback on all purchases means that for every $100 spent, you would earn $1 back. Over time, these rewards add up, effectively reducing your spending or contributing to your savings.

Additionally, some checking accounts offer dividends on your balances. These accounts pay you a small percentage of your average balance as a dividend — similar to how interest works on savings accounts. The more money you keep in the account, the more you earn.

✅ Savings

High-yield savings accounts are another way to make your money work harder for you, offering significantly higher interest rates compared to standard savings accounts. For instance, if your bank offers a high-yield savings account with a 2% interest rate and you save $5,000, you could earn $100 in interest over a year.

High-yield accounts are especially useful for setting aside funds for short-term goals or emergency funds. You get the twofold benefit of having a safe place for your money while earning a competitive return.

✅ Certificates of Deposit (CDs)

Financial institutions offer various CD options, all insured for safety, ensuring your money grows securely. CDs offer higher interest rates than regular savings accounts in exchange for locking your money away for a set period. (For example, a 3-year CD with a 3% interest rate on $10,000 earns $300.) Here’s how CDs work, at a glance:

• Fixed Term: You agree to keep your money deposited for a set term, from a few months to several years.
• Guaranteed Interest Rate: In return for committing your funds, you earn a higher, fixed rate compared to regular savings accounts.
• Penalty for Early Withdrawal: Accessing your funds early may result in a penalty that reduces or negates the interest earned.

✅ Utilize Customer Discounts and Rewards

Similar partnerships can extend to services such as travel, insurance, and home improvement, allowing you to save money in various areas of your life. To make the most of these benefits, check the customer benefits section of your financial institution’s website or contact them directly about current offers.

Honor offers discounts with trusted partners so you can save on services you need. Check out our current member offerings:

• Tax Discounts: Intuit TurboTax and H&R Block
• Love My Credit Union Rewards
• Trust & Will
• CU Trust
• TruStage
• Insurance Services
• RX Optical Eye Care

📱 Embrace Technology

According to the American Bankers Association, 79 percent of customers say digital innovations in banking make services more accessible. Financial institutions have made significant strides to ensure their customers have convenient access to their accounts. If you aren’t already, make sure to:

• Download the Mobile App: Most financial institutions offer mobile apps that let you check balances, transfer funds, and deposit checks from your phone.
• Set Up Alerts: Use account alerts to stay on top of your finances. Get notifications for low balances, large transactions, or upcoming due dates.
• Use Online Banking: Take advantage of online banking features to pay bills, monitor transactions, and manage your accounts.

💳 Boost Your Credit & Earn

A long-standing relationship with your financial institution can improve your chances of securing credit when you need it. Lenders often consider the length of your banking history when assessing creditworthiness. By demonstrating a consistent financial track record, you can increase your eligibility for loans, mortgages, or credit cards.

Sharing the benefits of being an Honor member is a win-win! Invite friends or family to open an Honor account, and when they meet the requirements, you’ll receive a $25 Mastercard Prepaid Card. It’s a great way to treat yourself while helping your loved ones enjoy fantastic benefits! Check out Refer a Friend.

🆓 Free Debt Counseling

Take control of your finances and get tailored guidance with hassle-free budgeting support. Honor partners with GreenPath to offer personalized advice on how to manage your money.

This article is shared by our partners at GreenPath Financial Wellness, a trusted national non-profit.