5 Bad Bank Account Habits to Break in 2023

Break these habits now so you can start 2023 off on the right foot.

With only a few weeks left in 2022, now is the perfect time to start thinking about what financial changes you want to make before the new year starts. Many people have poor bank account habits, some of which can be costly. If you're ready to improve, here are some bad bank account habits to break in 2023.

1. Keeping too much money sitting in your checking account

You might be keeping too much money in your checking account. If you have money anxieties or went through financial difficulties in the past, you may feel more secure keeping more money than necessary in your primary bank account. But that may not be the best move to make.

It's good practice to keep enough money in your checking account to cover your bills and some extra money as a backup. But don't be tempted to keep all of the money that you have there. If you do this, you'll miss out on the chance to earn interest. Figure out how much money is plenty for you to have at the ready, and then move your extra funds over to a savings account.

2. Not monitoring your spending

While it may seem like a chore, keeping an eye on your bank account balance and monitoring your transactions can be beneficial. With mobile banking apps, this is easy to do.

Our Picks for the Best High-Yield Savings Accounts of 2024

Capital One 360 Performance Savings APY 4.25% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening. Min. to earn $0 Open Account for Capital One 360 Performance Savings On Capital One's Secure Website. Member FDIC.	APY 4.25% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening.	Min. to earn $0
CIT Platinum Savings APY 4.85% APY for balances of $5,000 or more Rate info 4.85% APY for balances of $5,000 or more; otherwise, 0.25% APY Min. to earn $100 to open account, $5,000 for max APY Open Account for CIT Platinum Savings On CIT's Secure Website. Member FDIC.	APY 4.85% APY for balances of $5,000 or more Rate info 4.85% APY for balances of $5,000 or more; otherwise, 0.25% APY	Min. to earn $100 to open account, $5,000 for max APY
American Express® High Yield Savings APY 4.25% Rate info 4.25% annual percentage yield as of September 10, 2024 Min. to earn $0 Open Account for American Express® High Yield Savings On American Express's Secure Website. Member FDIC.	APY 4.25% Rate info 4.25% annual percentage yield as of September 10, 2024	Min. to earn $0

If you don't monitor your spending, it can be easy to neglect your budget. Some people may end up overdrawing their accounts if they're not careful. Get into the habit of monitoring your spending to know where your personal finances stand and to make more informed choices.

3. Paying extra fees

When you pay bank fees, you waste your hard-earned money. If you're giving in to additional fees like monthly maintenance fees and out-of-network ATM fees because it's convenient, you should know that those extra fees can add up and cost you a lot of money in the long run.

Figure out how to eliminate these fees going forward so you can keep more of your money. Choosing a bank that offers checking accounts with no monthly maintenance fees and reimburses out-of-network ATM fees is one option. If your bank doesn't reimburse out-of-network fees, you can take other steps to avoid paying unnecessary ATM fees.

4. Forgetting to save

Many people forget to make regular savings contributions. If you don't transfer extra funds from your checking account to your savings account, it can be too easy to spend what's left and never save for the future.

Are you looking for a way to make saving easier? Set up automatic transfers from your checking to your savings to save time and eliminate forgetfulness. You can do this through your bank's website or mobile app. Once you set up regular savings contributions, you can reach your savings goals faster.

5. Not paying attention to APY

If you have a savings account, make sure you know your account's APY or annual percentage yield. Many high-yield savings accounts offer attractive interest rates, which can help you earn more. You're missing out on free money if you keep your savings in an account with a lower APY. It's not a bad idea to review rates every so often to ensure you're maximizing your earning potential.

It can be easy to stick with bad habits because they're familiar. But some banking practices may cost you money and negatively impact your financial future. Consider making some changes as you think about the year ahead. It's never too late to improve your financial situation.