How to Set Up a Bank Transfer to Your Savings Account

Adam Rust

WiseWage wants to make savings a possibility for everyone because we believe that everyone needs a strong financial foundation. We want to build a community of savers.

Americans are not doing well with their savings

If you think it is hard to save money, you are not alone. Most people wish they could save more, but many seem to have decided that it isn’t possible. A few years back, a national consumer group surveyed a broad group of US households on savings. What they found was surprising. Thirty-four percent said they had no retirement plan at all. In a separate survey, twenty percent of the respondents said that they planned to fund their retirement from the proceeds of winning lottery tickets. If it’s of any reassurance, the expectations to live from lottery winnings is even higher among Canadians.

The net result is that forty percent of American households have less than $400 in money left over at the end of the month.

Bottom line: if you start saving $35 per month, you will already be ahead of two of every five households in the US within one year. You can take some pride in your ability to stand apart from the rest of us. Be the change!

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WiseWage is here to help

WiseWage has cards designed to help with saving. We have sought out products that reward people for conservation, regardless of the size of their account. We have accounts that pay more than two percent interest on the first dollar of savings.

We also think savings should be fun. How often do you check your account’s app? We check all the time. Sometimes, it’s a matter of making sure there is enough money set aside to cover bills. At other times, it’s to see if there is enough money left over to move some funds into savings. The fun starts when the balance begins to grow.

One trick we use is to set up an individual account just for savings, rather than use an account that is a part of a regular account at a big bank. The big banks pay about 3/100th of 1 percent interest these days. Our accounts pay more than 2 percent interest – seventy times more. However, it helps if the money can e separate, set aside on its own “island,” where it might be harder to spend.

How to Set up an Automatic Transfer from Spending to Savings

We like to set up automatic recurring transfers. Every two weeks, when my paycheck arrives, I move $25 to my account. Over time, that adds up. I enjoy seeing the evidence of my progress, and over time, the results look better and better.

It is relatively easy to set up automatic transfers. All you have to do is let your banks know how to communicate with each other. Banks do that in two ways. Either they use the “micro-deposit” approach, or they integrate an “application programming interface” (“API”) inside their account platform.

When a bank uses a micro deposit, it sends funds (usually twice) in small amounts to the linking bank account. The values will be less than a dollar. The last time I asked for micro-deposit account verification, my bank sent 9 cents and 13 cents. When you receive the deposits, you go back to the sending bank and confirm the amounts. That allows your bank to know that you are the holder of the other account. Once that has occurred, you can make a bank-to-bank transfer.

With an API, the sending bank asks you to log into your account at the receiving bank from a screen inside the sending bank’s web page or app. You give the bank permission to see your account. Once that has occurred, you can direct your sending bank to request funds from the receiving bank by the same bank-to-bank transfer approach.

The accounts at WiseWage will let you set up a recurring transfer of funds from your other account into the account you signed up for at WiseWage.

Here’s an example of a plan you could try:

1. Ask your employer to send your paycheck to one account via direct deposit.

2. Sign on to your other account – the one with the high-yield savings account – and ask the bank to request a transfer of funds into that account.

The logical step would be to synchronize the withdrawals with the timing of each paycheck. For example, you would make a plan to move $25 on each payday to your high-yield account.

Giving Savings a Name

Do you do better when you have the goal in mind? If that is the case, you might want to think of your savings account as your goal-setting place. A goal can be specific – i.e. to save money for a down payment on your next car. Alternatively, a goal can be general but still meaningful – i.e. to save money for a rainy day.

Unless you have a goal, you will probably never meet it. The key is turn a moment of good inspiration into a regular habit. If you can set aside a few dollars on an automatic basis, you may never miss the funds.

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Adam Rust has worked to defend consumers against harmful financial practices since 2005. He has written extensively about overdraft fees, payday lending, credit insurance, student loans, prepaid debit cards, high-cost installment loans, and subprime mortgage lending. The New York Times interviewed him when it reported on the CFPB's rulemaking on prepaid debit cards; subsequently, his research paper framed the debate on consumer protections.

He serves on the Board of the US Faster Payments Council. He is Director of Research at Reinvestment Partners in Durham, North Carolina. He is the author of BankTalk. He is the author of "This is My Home: Challenges and Opportunities of Manufactured Housing" and has testified to Congress on how to redress some of the problems with manufactured housing. See more on his LinkedIn profile.