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However, you may not be maximizing your relationship with your bank to build and protect wealth.
Choose the Right Financial Institution
Where you put your money matters.
Financial technology companies, or fintechs, are becoming increasingly popular for their ease of use and special perks.
However, your money may be at risk even if the company partners with a traditional bank.
The banks themselves didnt go bankrupt, so the coverage didnt apply to Synapse users.
When you do business directly with an insured bank, your cash is safe should the institution become insolvent.
If you have over $250,000 in your account, the excess funds are not covered by FDIC insurance.
You could lose that money if the bank goes out of business.
Maintaining multiple accounts below the quarter million dollar threshold at different banks ensures all of your cash is protected.
Do Business With Multiple Banks
Keeping all of your money in one bank can be convenient.
However, you may want to spread your funds across multiple institutions for reasons beyond FDIC insurance.
Working with more than one bank could give you access to different benefits.
Your bank can give you insight on how to better manage your money, Williams said.
For instance, an individual retirement account (IRA) could be a great addition to your investment portfolio.
An IRA builds wealth while providing tax advantages.
A traditional IRA is the opposite: funded with pre-tax dollars and taxed upon withdrawal.
Your bank may also make it easy to grow your savings account balance.
While bank-issued rewards probably wont make you rich, they will add up over time.
Expand Your Financial Literacy
Want to learn more about money management?
Your bank may offer several educational resources, such as:
Visit your banks website to get started.
Williams said, The most important bank product to build wealth is a home loan.
Homeownership is where the majority of Americans accumulate wealth over time.
As an added perk, your bank may offer you a better interest rate simply for being a customer.
Even a small rate reduction could save you tens of thousands over the life of the mortgage.
Get Insured
According to Williams, life insurance is a necessary product to build generational wealth.
A whole life policy, while more expensive, builds cash value and pays out a death benefit.
It remains in effect as long as you pay the premium.
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