Many people just leave a lot of money in their checking accounts and then let it sit there. But is this the best move? Probably not.
Gobankingrates spoke with experienced bank teller Rachael P., who has seen it all in terms of the banking habits of clients.
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She knows firsthand the trap of keeping too much money in her checking account and is ready to provide tough financial advice when needed.
Here are seven reasons why bank tellers advise against keeping over $3,000 in checking accounts.
The number one reason Rachael doesn’t like to see huge balances in checking accounts is the complete lack of interest. “Why sit there and do nothing?” she asked.
Checking accounts are for money spent in the short term, not for larger sums of money that make profits elsewhere.
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Rachael noticed a clear correlation between the size of the customer checking account balance and the rash spending they made.
“It’s like having a milkshake in front of you 24/7 – you’ll keep taking STIP regardless of whether you need them or not,” she said.
Split up larger amounts make it psychologically harder to immerse funds for other purposes into funds.
Many banks only use to open a new checking or savings account and maintain a minimum balance of $200 or more bonus.
However, if you already have a larger checking account balance, you will miss the ability to cash out these transactions.
“Why put money on the table?” Rachel asked. “This bonus can be invested directly.”
For all security of surrounding banks, if the bank fails, the checking account balance has only $250,000 in FDIC insurance. Any quantity not protected.
By keeping large sums in checking accounts, customers unnecessarily put their money at risk.
“Write this number and decide if it’s worth it,” Rachel said.
“The miracle of compounding can only work if your money actually invests and earns returns,” Rachael shared.
By leaving a lot of money in checking accounts, many have deprived decades of potential growth.
