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15 Banking Mistakes the Upper Class Never Makes (#8 Is So Simple)

Unveil the secret strategies that safeguard the affluent from financial pitfalls.

By Adam Palasciano

Edited by Eric McWhinnie

Updated Nov. 7, 2024

In the world of banking, the upper class often navigates with ease, avoiding common pitfalls that may hinder financial progress.

From maximizing perks to leveraging digital tools, their approach to banking is strategic and informed.

By understanding the banking mistakes the upper class never makes, you can adopt strategies to boost your net worth and achieve greater prosperity.

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Ignoring credit card rewards programs

Maximizing the benefits of credit card rewards programs to earn cash back, travel rewards, and other perks on your everyday spending means less money you'll have to spend.

You'll want to strategically select the top rewards credit cards and use them responsibly to optimize reward accumulation without incurring unnecessary debt.

By leveraging credit card rewards programs, you'll enjoy valuable perks and incentives that enhance your overall financial well-being and lifestyle.

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Not asking for what you want from your bank

Whether it's requesting waived fees or negotiating better interest rates, a simple phone call can lead to significant savings and perks.

By advocating for yourself, you can ensure that your banking relationships are mutually beneficial and aligned with your financial objectives.

Not searching around for the best banking perks

By conducting thorough research and comparison shopping, you can ensure that your banking decisions align with your financial goals and lifestyle preferences.

Investing time and effort into finding the best banking perks enables you to optimize your financial outcomes and enjoy exclusive benefits tailored to your needs.

Get a free stock valued between $5 to $200

Secret: You don't need thousands of dollars to buy thousand-dollar stocks or create a diverse portfolio.

Robinhood offers a method of investing called “fractional shares.” On its own, one share of a single stock could cost a lot of money, making it difficult to diversify. Robinhood allows you to buy pieces of stock instead, so you have the option to build a diverse portfolio quickly.

Let’s say you want to invest $250, as an example.

With that amount, you could build a relatively diverse portfolio with an investment of $50 in a big tech stock, $50 in a retail stock, $50 in an energy stock, $50 in a manufacturing stock, and $50 in a bank.¹ This content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice. To get stock reward, new customers need to sign up, get approved, and link their bank account. Stock rewards shares cannot be sold until 3 trading days after the reward is granted and the cash value of the stock rewards may not be withdrawn for 30 days after the reward is claimed. Stock rewards not claimed within 60 days may expire. See full terms and conditions at <a href="https://robinhood.com/us/en/support/articles/open-account-pick-your-stock/">rbnhd.co/freestock</a>. Fractional shares are illiquid outside of Robinhood and are not transferable. Not all securities available through Robinhood are eligible for fractional share orders. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see the Fractional Shares section of our Customer Agreement. Robinhood Gold is offered through Robinhood Financial LLC and is a membership offering premium services available for a fee.

Even better news? Add a Robinhood Gold membership, and you’ll get access to 4.00% (as of 12/27/24) APY² Annual Percentage Yield. Rate valid as of April 12, 2024. To earn interest, a cash balance is needed. If you have a margin balance, there is no cash balance to earn interest. Interest rates for cash sweep and margin investing can change at any time. Fees may reduce interest earnings. on your uninvested cash³ Interest is earned on uninvested cash swept from your brokerage account to partner banks. Partner banks pay interest on your swept cash, minus any fees paid to Robinhood. As of Nov 15, 2023, the Annual Percentage Yield (APY) that you will receive is 1.5%, or 5% for Gold customers. The APY might change at any time at the partner banks' or Robinhood's discretion. Additionally, any fees Robinhood receives may vary and are subject to change. Neither Robinhood Financial LLC nor any of its affiliates are banks. All investments involve risk and loss of principal is possible. Robinhood Financial LLC (member SIPC), is a registered broker dealer. and the ability to buy and sell stocks 24 hours a day, 5 days a week.

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Not diversifying financial institutions

Instead of relying solely on one bank, consider diversifying your accounts across multiple financial institutions that offer the best accounts.

This spreads risk and allows you to access a broader range of products and services tailored to your specific needs and preferences.

By maintaining relationships with different banks, you can ensure flexibility and resilience in your financial strategies, safeguarding against potential disruptions or limitations.

Not taking advantage of wealth management services

Wealth management services offer personalized financial guidance and investment strategies tailored to high-net-worth individuals.

Recognizing the value of expert advice and leveraging wealth management services can optimize your portfolios and help you achieve your long-term financial goals.

By partnering with experienced professionals, you can access sophisticated investment opportunities and strategic wealth planning strategies that enhance your financial outcomes.

Not using digital banking tools

Digital banking tools help streamline financial management. From mobile banking apps to online bill pay, leveraging digital solutions to track spending, manage accounts, and make informed financial decisions on the go is key.

By embracing innovation, you can enhance efficiency and convenience in your banking activities, freeing up time and resources for other priorities.

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Not paying attention to fee structures

Paying close attention to fee structures can help minimize unnecessary charges. By understanding fee schedules and account requirements, you can avoid surprises and keep your banking relationships cost-effective.

Proactively monitoring fee structures allows you to make informed decisions about where to allocate your funds and maximize the value of your banking services.

Using ATMs of other banks

Instead of paying fees for using out-of-network ATMs, choose banks with extensive ATM networks or ones that reimburse ATM fees as part of the account benefits. This provides convenient access to cash without incurring unnecessary charges.

By choosing banks with robust ATM networks, you'll minimize transaction costs and maintain flexibility in accessing your funds wherever you go.

Going into overdraft

Manage your accounts diligently to avoid overdraft fees and associated penalties. Maintain sufficient balances, set up low-balance alerts, and utilize overdraft protection options to prevent accidental overdrafts.

By staying proactive and vigilant, you can avoid costly overdraft fees, which can erode your financial resources and disrupt your cash flow.

Earn up to a $300 bonus and grow your money with up to 3.80% APY

This powerful combination checking + savings account from SoFi® allows you to earn up to a $300 bonus with direct deposit and grow your money with up to 3.80% APY.⁴ New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Direct Deposits received during the Direct Deposit Bonus Period) OR $300 (with at least $5,000 total Direct Deposits received during the Direct Deposit Bonus Period). Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 1/31/2026. See full bonus and annual percentage yield (APY) terms at <a href="http://www.sofi.com/banking#1">sofi.com/banking#1</a>. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC. SoFi members who enroll in SoFi Plus with Direct Deposit or by paying the SoFi Plus Subscription Fee every 30 days or with $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either SoFi Plus or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi Plus members are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of Jan. 24, 2025. There is no minimum balance requirement. Additional information can be found at <a href="http://www.sofi.com/legal/banking-rate-sheet">http://www.sofi.com/legal/banking-rate-sheet</a>. See the SoFi Plus Terms and Conditions at <a href="https://www.sofi.com/terms-of-use/#plus">https://www.sofi.com/terms-of-use/#plus</a>.

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SoFi has no account fees⁵ We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at <a href="http://sofi.com/legal/banking-fees/">sofi.com/legal/banking-fees/</a> or overdraft fees⁶ Overdraft Coverage is limited to $50 on debit card purchases only and is an account benefit available to customers with direct deposits of $1,000 or more during the current 30-day Evaluation Period as determined by SoFi Bank, N.A.  The 30-Day Evaluation Period refers to the "Start Date" and "End Date" set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the "30-Day Evaluation Period"). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY.  Members with a prior history of non-repayment of negative balances are ineligible for Overdraft Coverage. and additional FDIC insurance up to $3 million on deposits is available through a seamless network of participating banks.⁷ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per depositor per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $3M through participation in the program. See full terms at <a href="http://sofi.com/banking/fdic/sidpterms">SoFi.com/banking/fdic/sidpterms</a>. See list of participating banks at <a href="http://sofi.com/banking/fdic/participatingbanks">SoFi.com/banking/fdic/participatingbanks</a>. Plus, you can receive your paycheck up to 2 days early.⁸ Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.

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SoFi is a Member, FDIC. ⁷ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per depositor per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $3M through participation in the program. See full terms at <a href="http://sofi.com/banking/fdic/sidpterms">SoFi.com/banking/fdic/sidpterms</a>. See list of participating banks at <a href="http://sofi.com/banking/fdic/participatingbanks">SoFi.com/banking/fdic/participatingbanks</a>.

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Not maintaining minimum balances

Adhering to minimum balance requirements will help you avoid monthly maintenance fees and maximize the value of your accounts. Strategically allocate funds to meet minimum balance thresholds while optimizing liquidity and investment opportunities.

Maintaining minimum balances allows you to enjoy the full benefits of your accounts without incurring unnecessary costs, preserving your wealth and financial flexibility.

Not being aware of transaction limits

Understanding transaction limits helps avoid disruptions to your banking activities and potential fees for exceeding limits.

Whether it's ATM withdrawals, online transfers, or debit card transactions, always stay informed and plan transactions accordingly to avoid inconvenience and penalties.

By staying within transaction limits, you'll maintain seamless access to your funds while avoiding unnecessary fees or restrictions on your banking activities.

Not reviewing account statements regularly

Regularly reviewing your account statements to detect errors, unauthorized transactions, or suspicious activity promptly is important.

By monitoring account activity, you'll maintain financial security and ensure the accuracy of your banking records. This proactive approach allows you to identify discrepancies early on, preventing potential financial losses or fraudulent activity.

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Not automating bill payments

Automating bill payments helps you never miss a payment deadline. This avoids late fees and maintains a positive credit history.

Set up recurring payments for utilities, loans, and credit cards, streamlining your financial obligations and minimizing the risk of oversights.

Automating bill payments will free up time and mental energy to focus on more strategic financial planning and wealth-building activities.

Not having an emergency fund

Always set aside funds in a liquid account to cover unexpected expenses, job loss, or other financial emergencies, providing a safety net for yourself and your family.

This prudent financial habit ensures you're equipped to handle unforeseen challenges without derailing your long-term financial goals or resorting to high-interest borrowing options.

Overlooking interest rates

Whether you're investing in high-yield savings accounts, CDs, or loans, paying attention to interest rates can help you maximize returns or minimize borrowing costs.

Shopping around for competitive rates and negotiating for better terms when necessary is key. Prioritizing favorable interest rates also enables you to optimize your savings and borrowing strategies, increasing your wealth over time.

Bottom line

Reflect on your banking habits and consider how adopting strategies employed by the upper class could enhance your financial well-being. Are there areas where you could optimize your banking relationships and avoid common pitfalls?

By taking proactive steps to improve your banking practices, you can elevate your financial management and protect your wealth in the long run.

More from FinanceBuzz:

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