Tip of the Week: When is the Smartest Time to Pay Your Bills?

Everyone knows that it is important to pay your bills on time, but did you know that it pays to pay your bills as close to their due dates as possible?

Your money works best for you when it stays in your savings account collecting interest.  Therefore, it doesn’t make sense to pay your bills now if they are not due until the end of the month, for example.  Interest accrues daily, so you can maximize your interest income by keeping the largest amount of money in your savings account for the longest amount of time possible.  Below are a few things to keep in mind though:

  • If you still pay your bills via snail mail, you should send your payment five business days in advance of the due date so there is enough time for the check to arrive.  Otherwise, you can schedule your electronic payment to go through on the exact date the bill is due.
  • If you have various bills due throughout the month, decide when is the best time of the month to pay your bills and call your credit card companies and cell phone, internet, cable providers, etc. to change your billing cycles so all your bills are due at around the same time.  That will help you keep track of them, and most places are happy to accommodate.
  • Keep in mind that transferring the money from your savings account to your checking account can take a few business days.
  • Also remember that many savings accounts limit how many times you can withdraw in a month, so figure out how much money you need for your bills and withdraw the whole amount in a few transactions.