14 Things Your Bank Doesn't Want You to Know (2024)

In 2019, 94.6% of US households (124.2 million people), had at least a checking or savings account and 72.5% had a bank credit card or personal loan. Since banks are a vital part of our lives, it’s essential to understand how they work so you can better manage your money.

Unfortunately, there are some things banks don’t want you to know — like how hidden fees or sticking with a low-interest savings account could make it harder for your money to work for you. Here are a few other secrets your bank is probably trying to keep under wraps.

Credit unions are non-profits and tend to have lower overhead costs. Because of this, they’re able to pass along the savings in the form of lower interest rates on loans, mortgages, and even credit cards. Credit unions may also have lower account fees, although it's always a good idea to compare multiple lenders when you’re applying for a loan or mortgage.

Overdraft protection ensures your transactions will go through, even if you don’t have enough money in your account. However, the service often comes with high fees, sometimes as high as $35 per occurrence. What’s more, you could be charged multiple overdraft fees per day. It’s a good idea to set up text or email bank alerts so you know if you’re close to overspending.

As of January 2022, some major banks including Bank of America and Capital One have announced that they are either reducing or eliminating overdraft fees.

Federal law says you are protected against charges made without your permission if you report a lost or stolen credit card immediately and before someone else uses it. However, if you report the card after fraudulent charges are made, you might be on the hook for at least some of the money taken.

If you wait up to two business days to report your card lost or stolen, you may be responsible for up to $50 of the transaction. If you wait more than two days (or up to 60 calendar days after your statement is sent to you) you could lose up to $500. Be sure to check in on your accounts often, if not daily, and report any fraudulent charges or stolen cards immediately.

Each bank or credit union has its own rules about how long it takes to deposit a check. Federal law states that banks must make funds available in a “reasonable amount of time.” This can be up to two days or even longer for deposits over $5,000 or for deposits made at a third-party bank or ATM.

Banks also may have a different timetable for deposits made on mobile apps instead of at an ATM or local branch. Be sure to check the policy for your bank, so you don’t inadvertently bounce a check or get hit with overdraft fees.

The annual percentage yield (APY) a bank offers on savings accounts is variable and can change at any time, even overnight. Savings account rates are based on the federal funds rate, which is how much banks borrow or lend to each other overnight to meet Federal Reserve requirements. These rates tend to fluctuate based on how the economy is growing or contracting.

If you want to earn the most interest on your short-term savings, search around for high-yield savings accounts, which are generally found at online banks.

As you learn how to manage your money, you might think it’s a good idea to pay off your loan when you have some extra cash. While paying off a credit card early could be good for your credit, paying off an auto or personal loan early might subject you to an early payoff fee from your lender.

Paying off a loan early will also shorten your history of successful payments. Since your payment history makes up 35% of your FICO score, you could be missing a valuable opportunity to improve your credit.

The right of offset rule allows banks to take money from a checking or savings account and use it to pay off a different debt you have with the same bank. For example, if you missed a payment on an auto loan and have a checking account with the same bank, they can deduct funds from your checking account to get you current on the auto loan.

Right of offset language is usually included in the agreement you sign when you open the account, although the specific wording may vary from one bank to another.

Credit card companies were once allowed to increase interest rates on outstanding balances when a late payment for an unrelated loan or account was reported to the credit bureaus. However, the 2009 CARD Act limited credit card companies to raising interest rates only when an introductory period ends, if they’re linked to another rate, or if a payment is more than 60 days late.

In all other cases, credit card companies must notify customers of interest rate increases or other changes at least 45 days in advance.

Banks weigh several factors when reviewing small business loan applications. While there are a variety of loan options available, actually getting a business loan approved can be difficult. Factors like how long you’ve been in business, your personal credit score, and your financial statements or tax returns can all impact the success of your loan application.

Your odds may improve depending on the type of financing you apply for.

Not understanding how your bank accounts work may be costing you in terms of fees and lost interest earnings over the course of your life. Do your research, make sure you understand all of the account details, and ask questions so you know the facts going in.

If you’re looking to make a switch or open a new bank account, check out our list of the best banks.