3 Big Banking Mistakes to Avoid in 2024

Banks are supposed to help you manage your money, but sometimes you can end up losing money when you use them. This can happen if you fall victim to some common banking mistakes.

You want your bank to make your finances better, so be sure to avoid these three big banking errors in 2024.

1. Paying monthly maintenance fees

Some checking accounts come with fees ranging from $5 per month to as much as $35 per month. These fees are generally a huge waste of money since you often don't get anything special from banks that offer them compared to those that don't charge fees at all.

While fees can sometimes be waived if you do things like maintain a required minimum daily balance or have a certain amount of money directly deposited, it can be a pain to manage this. And it can be unnecessarily restricting if, for example, you want to take more money out of your account.

To make sure you don't get hit with these unnecessary fees, check out the best free checking accounts for 2024 and consider switching to one so you can avoid the big mistake of making bankers richer and yourself poorer. Trust me, they already have enough money and don't need yours!

2. Incurring ATM charges

ATM charges are a huge expense. The average cost of out-of-network transactions is $4.73, including an average of $1.58 charged by the account holder's bank and $3.15 charged by the ATM being used.

Personally, I find the idea of paying almost $5 to access my own money to be incredibly off-putting, and you should, too. Paying these fees is a huge mistake, as these costs can add up and leave you with a lot less money in your account than you should have.

To avoid this, make sure your bank has a large ATM network or, better yet, look for a bank that doesn't charge out-of-network fees and that reimburses you for the fees charged by others. The Schwab Bank High Yield Investor Checking account is a great pick, as it reimburses ATM fees worldwide while not charging you any fees if you use an out-of-network ATM.

3. Keeping money in the wrong accounts

There's another huge banking mistake you'll also want to avoid this year. It involves keeping money in the wrong accounts. Particularly, you should avoid:

• Keeping money in checking that you won't need to pay upcoming bills or expenses
• Keeping money in a low-yield savings account

If you keep your money in checking when it should be in savings, you miss out on the chance to earn interest, since most checking accounts will pay you little or nothing in interest. And if you're keeping money in a savings account with the national average rate of 0.47%, you're also losing the chance to maximize your returns since many high-yield savings accounts today pay 4.00% to 5.00%, or even more.

The table below shows how much you stand to lose if you keep an extra $1,000 in a checking account or low-yield savings account that belongs elsewhere.

While rates on high-yield savings accounts and other banking products may go down as the Federal Reserve begins to dial back the federal funds rate (which is likely to happen at some point this year), you're still better off having money in a high-yield savings, as you'll always earn more than a standard savings account would pay -- and more than a typical checking account can offer you, too.

By avoiding these three banking mistakes, you can end up with more money in 2024 and beyond.