The Bank ID Card, which we receive these days — one for each bank account — is a report that provides a comprehensive financial overview of our banking status. It includes details about expenses, income, assets, and liabilities as recorded in the bank account. The information in this report serves as an important tool for making informed financial decisions and improving our banking habits.
So, what should you do with your Bank ID?
First, open the envelope or log into your online banking account to download the report to your computer—sometimes, this is the hardest step. Once you open the report, you’ll find that it consolidates all the key information about your bank account in one place. The report’s structure is uniform across all banks, meaning that once you learn how to read it, you can apply this knowledge to any bank account you or your loved ones have.
Here are 10 essential actions to take when you receive the report:
- Check your account settings: Review the list of account holders and authorized persons, and make changes if necessary.
(Location in the report – General, Part A). - Check your balance of assets and liabilities: Assess the ratio between your bank assets (credit balance, deposits, savings, securities) and your liabilities (loans, overdrafts, guarantees).
(Location in the report – Part 2: Daily Balances). - Compare savings versus credit: Do you frequently overdraw (go into overdraft) and pay high interest while simultaneously keeping savings in a deposit account with a much lower interest rate? It’s recommended to manage your finances in a balanced way, ensuring that expenses do not exceed income. If possible, consider withdrawing deposit funds at the next available opportunity to cover your overdraft.
(Location in the report – Part C1: Income/Expenses from Interest, Credit Facilities, and Loans vs. Deposits and Savings). - Check if you are financially balanced: Compare your monthly income with your expenses to identify months when you struggle financially. Prepare for these months by setting aside money when your income exceeds your expenses.
(Location in the report – Part C1: Monthly Income-Expense Graph). - Improve your loan terms: If you have bank loans, use your Bank ID to negotiate better terms with your current bank or consider switching to another bank. Before taking out a new loan, carefully evaluate whether you truly need one.
(Location in the report – Part C3: Adjusted Interest Rate on Loans and Credit Facilities). - Plan for early loan repayment: Check when your loan’s interest rate is scheduled to be updated. This can help you determine whether repaying the loan on that date could save you from incurring additional repayment fees.
(Location in the report – Part C3: Interest Rate Change Date Field). - Adjust your credit limit to your needs: If your credit limit is larger than necessary, consider adjusting it. Overdraft interest rates are divided into tiers—work to lower the interest rate on the more expensive tier while increasing the cheaper one. If you never use your overdraft but still have a credit facility, think about canceling it. You’re likely paying a credit allocation fee for a facility you don’t use. Remember, an overdraft is a problem, not a solution.
(Location in the report – Abbreviated Report, Part C, Section 3. More details are available in the full report, Chapter 3: Credit Facility in the Current Account). - Assess the feasibility of switching to a fixed-fee banking plan: By reviewing the fees paid to your bank over the past year, you can determine whether switching to a fixed-fee plan (where you pay a set amount each month for a predetermined number of transactions) would be beneficial. Learn more about fixed-fee banking plans.
(Location in the report – Part C4: Annual Average Fees and Number of Transactions in Current Fee Series). - Negotiate portfolio management fees: If you have an investment portfolio, check the detailed report for full information about the portfolio and the associated fees.
(Location in the report – Detailed Report, Chapter 5). - Check how much you earn on a positive balance: Does your bank pay interest on your account balance? If so, compare it with other options. A deposit, savings account, or investment portfolio might provide better returns.
(Location in the report – Part C5: Additional Current Account Data).
