This Inconvenient Banking Trick Is Actually Helping Me Save More Money

I used to be a banking loyalist, as I've had a relationship with a big national bank since my undergraduate days, and that has included maintaining both a checking and a savings account with that institution. But while the checking account is fee free, the savings account charges me if my balance drops below $300, plus the APY is nothing to write home about.

So when I started freelancing in 2022, I opened a high-yield savings account at an online-only bank on the advice of my financial planner. At that time, I just needed a place to keep the money I owe the IRS and my state every quarter to cover my estimated taxes (as a freelancer, it's on me to make those payments). I figured it would be nice to earn some interest on that money along the way.

When it comes to money, being loyal to one banking institution may not always benefit you. And if you're still keeping all your money at just one bank, you're missing out on a host of potential benefits. In addition to getting a much higher APY on my online savings account, I'm also finding it easier to save money and resist the temptation to spend, thanks to the extra legwork required to move money between multiple banks. Here's how.

Making a payment app work for me

I get paid by my freelance clients via direct deposit. I have those payments set to come into my checking account at the big bank, and I then distribute the money from there. Some of it goes to pay my bills, but before I do that, I take out Uncle Sam's cut as well as money for my savings goals (more on that below). Rather than using a traditional bank transfer to send that cash to my online-only bank, I use a payment app that works with both banks.

However, I discovered pretty early on in this process that the money only moves quickly in one direction. Cash sent from my big bank to my online bank credits immediately. I have a process for making my tax money/savings transfers -- I sign into my big bank's website, initiate the transfer, then log out and sign into my online bank's website and further distribute the money. By the time I change accounts, the money has already hit my online savings account. How convenient!

But not so fast. If I need to move money back in the other direction (online bank to big bank), it's not an instant transfer. Instead, it takes a day to happen. This is the kind of inconvenience I don't mind, however.

My savings goals changed

Near the end of 2022, I gave my online savings account a new job -- I started putting money away to buy a home. This means that a lot of the money in there has a longer timeline than my quarterly tax payments, and it's even more crucial that I earn a generous APY on it. This actually turns the inconvenient transfer time into an advantage. Why?

It gives me a greater sense of security to know I can't just tap that money in the blink of an eye. And as I shell out various bits of money along the way to homeownership (such as an earnest money deposit, paying a home inspector, and so on), I'll have to plan accordingly, giving me the time to budget and consider my expenses ahead of time.

My online savings account also let me set up different sections within the main account for different savings goals. Along with saving for a house, I also have spots for mundane goals, like cash to pay for vet visits for my cats, as well as for fun things like travel. I really enjoy watching the money in those increase over time, and I love that I can fund them in an instant, but it requires more time and planning to get the money out.

Knowing that cash can only be transferred instantly going in one direction has made it easier for me to park money in my savings account -- and harder to justify pulling it out. What's not to like? If you've got all your money with just one bank and are saving for a big goal, I recommend moving your savings to a different bank (and if it's one that pays a higher APY, all the better!). You might just find that this inconvenience works out well for you too.