Automatic transfers are incredibly useful features that you can set up through online banking. The features allow you to schedule electronic transfers of your funds from one or more of your accounts. How can this feature help with your personal finances? These are just some examples.
Boost Your Savings
Do you keep forgetting to make contributions to your savings accounts? Then, you should consider automating transfers between your checking accounts and savings accounts every single month. That way, you will never miss a monthly contribution.
For instance, you can start building a reliable emergency fund with this automating strategy. You’ll want to have an emergency fund on-hand so that you can handle urgent, unplanned expenses whenever they crop up.
Without those savings, you might have difficulty covering these expenses out of pocket. You might have to rely on an alternative like a personal loan to help you manage the expenses in a short amount of time. You don’t have to go to your local bank branch for an appointment — you can access loans by phone and complete the application process in the comfort of your own home. If you get approved for the personal loan, you can use the funds to respond to the emergency and then focus on repayments.
Pay Your Bills
You can automate recurring bill payments so that you never miss a single deadline. Do this with your mortgage payments, insurance payments, utility bills, subscription services and other monthly bills sitting on your budget.
For instance, maybe you took out an emergency loan by phone, and you need to start the billing cycle. To make that repayment process easier, you can set up ACH payments. These are authorized electronic fund transfers that are sent from your bank account. You can use them to pay all of the bills on time, without any unnecessary stress.
SetUp Overdraft Protection
With overdraft protection, you can set up automatic transfers from another bank account to replenish your checking account whenever it goes into overdraft. This will ensure that your transactions go through whenever you accidentally spend more than your available balance.
Precautions with Automatic Transfers
One precaution you should take with automatic transfers is to make sure that you have enough funds available. Otherwise, you run the risk of putting your checking account into overdraft. If you don’t have overdraft protection, you could collect NSF fees and default on the payment the transfer was for.
What can you do to prevent this situation?
Create a personal budget and calculate how much you need for your transfers every month.
Give your budget some wiggle room. Don’t account for every single penny — this can help you avoid going into overdraft when you make a miscalculation.
Set up alerts through your online banking to let you know when your checking account balance is running low.
Check your accounts often.
Set up overdraft protection.
When setting up overdraft protection, link your checking account to a savings account. Do not link it to a credit card, even if you have plenty of credit available. Any time you transfer funds from your credit card to your checking account, it will be treated as a cash advance. Then you will have to pay cash advance fees along with your transfer fees.
Don’t ignore this amazing banking feature. Take advantage of automatic transfers now!
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