Many common banking mistakes result from not looking at the big picture, focusing instead on one attractive aspect of a banking service.

For example, imagine Lester, who keeps the required minimum of \$2,000 in his interest-bearing checking account at his bank. The bank rewards him with the princely interest rate of 1%. (Lester is pleased with this, because other checking accounts at the bank offer even lower rates, or no interest at all, although the minimums are lower.) So Lester earns about \$20 per year. Meanwhile, though, this account charges him \$9.95 per month as a "service charge." This amounts to roughly \$120 per year in costs, leaving poor Lester with a loss of \$100 for the year. Ouch!

Another big mistake is keeping too much money at your local bank, especially in savings accounts and other accounts that pay paltry interest rates. That money could be put to work for you much more effectively.

For example, let's say that Sonia has managed to save \$6,000 in her savings account. (Way to go, Sonia!) She's not yet ready to invest in stocks, so she's content earning a little interest. But, her savings account is paying her just 1.5% per year. For \$6,000, that amounts to just \$90. She should consider some other options.

If she assumes that she won't need \$2,000 of that money for at least two years, she could park it in a two-year CD earning, let's say, 4.3% (see table for actual rates on 2-year CDs). That will amount to \$86 in the first year. If she won't need another \$2,000 for at least one year, it could earn 4.1% in a one-year CD, amounting to \$82 in the first year. She might park another \$1,000 in a three-month CD (renewing it every quarter), earning 3.9% or \$39. So the \$5,000 she shuffled out of her savings account will bring her a total of \$207 that first year, instead of \$90. Not bad! (Oh, and let's not forget an additional \$15 on the \$1,000 still in her savings account.)

To find good rates, the Fool recommends Bankrate.com (NYSE:RATE). If interest rates are considerably higher in a few years, your savings potential could be much more meaningful. You can get additional money-saving banking insights in our Foolish Banking area.

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Rate (%)*

4.88

IndyMac (NYSE:NDE)

4.93

NetBank (NASDAQ:NTBK)

5.07

ING Direct

4.94

*Rates on two-year CDs provided by Bankrate.

This article was originally published on June 12, 2006. It has been updated by Fool sector head Joey Khattab, who does not own any of the shares mentioned. BankRate is a Rule Breakers selection. The Fool has a disclosure policy.