In our society, we recognize that banks are necessary for the efficient flow of money. We keep money in bank accounts so that it is generally safe. Most banks have FDIC insurance and other types of insurance, meant to help keep your money secure in the event the bank fails, or if the bank is robbed. For most people, the bank is a safer place to keep large amounts of money than under the mattress, and using a debit card or credit card is more secure than carrying hundreds of dollars in cash on your person.



We use banks regularly, and are used to their benefits. However, it is possible to make mistakes with your bank patronage, resulting in lower returns than you could be getting – or even in losses. Here are 10 mistakes people make with their bank accounts:

1. Not reviewing your monthly account statement

With technology allowing you to peek at your account activity online, it is easy to neglect the account statement. However, this is a mistake. Your account statement is the “official” record of transactions for the month. What is on the account statement is what goes. Reconcile your bank account statement to your personal records (personal finance software makes this very easy) each month, and look for mistakes and fraudulent charges. Also, look for fees you didn’t realize you were paying.

2. Not reading account materials and notices

It is tedious to read through privacy notices and changes to account agreements. This is important information, though. Banks notify you when fees change, and tell you whom they are sharing your information with. Protect your privacy and change banks if you don’t like new fees that are charged.

3. Keeping money in non-interest bearing accounts

Banks these days have a variety of products that allow you to earn interest. Even many checking accounts offer interest on balances. If you are keeping money in the bank, you should be earning interest on it. Consider rewards checking accounts, and money market accounts in addition to savings accounts. Just be sure to understand any minimum balance requirements or limits to withdrawals.

4. Using a “traditional” savings account

Surprising as it may be to some, there are still plenty of folks using “traditional” savings accounts that offer less than 1% annual yield. Instead, go online, or look for other financial institutions that offer high yield savings accounts. You may have to link to another account, but it’s often worth it. While no savings account is going to offer a great yield, you should at least get what you can.

5. Allowing your CDs to roll over automatically

Some CDs will automatically roll over. This may be a feature of the CD, or the financial institution may inform you that you have the option. While this may be tempting due the hassle free nature of an automatic roll over, you might be doing yourself a disservice. Before you let a CD roll over automatically, do your homework. Look for CDs with higher rates. If you can find a CD elsewhere with a higher rate, either ask your bank to honor that rate, or take your money elsewhere.

6. Borrowing from your bank without shopping around

Because you already have a relationship with your bank, it is tempting to simply go to your primary financial institution when you need a loan. If you do this without shopping around, though, you may end up paying more. Whether it’s a mortgage, car loan or credit card, if you are looking to borrow money, shop around for the best rate and look for the best deal.

7. Not shopping around for lower fees

All banks do not charge for the same services. Some banks offer lower ATM fees, or refund ATM fees. Some banks charge monthly maintenance fees, or fees if you drop below a certain balance. It is also worth noting that banks often charge different fees on different accounts. So, one account at a bank might come with higher fees than another account at the same bank. If you are dissatisfied with the fees your bank charges, shop around at other banks and look for lower fees. Also, compare accounts offered by your financial institution and choose the best deal you can.

8. Using public computers for online banking

It’s amazing to me how many times you can walk by a library computer and see someone initiating transactions. Public computers may not be secure in the same way your computer is. If you do use a public computer to check on your bank account, make sure to log out completely from your account, clear the browsing history and cache, and completely log out of the session. You also face security problems when using public WiFi on your own laptop. The level of security offered by public wireless connections is probably not the same as that of your home router. Instead, do your online banking at home. And make sure that you make it difficult for non-family members to access your home wireless network.

9. Leaving a paper trail

Many people still leave a paper trail of discarded bank statements. Even deposit slips and receipts from your bank can provide information that could be used by identity thieves. After you have verified your information with statements, or with deposit receipts, either store them in a locked file cabinet or shred them. Shredding is best. Whenever you throw out any financial information, you need to shred it first.

10. Neglecting to negotiate

Everything is negotiable. Whether it’s the interest rate on your bank-issued credit card or the fee on your checking account, it doesn’t hurt to ask for a better deal. Bankers want to keep you business. If you find a better deal elsewhere, take it to your bank, and see if it is possible to get the same deal at your current bank. If you are unhappy with a fee, you can ask about it. The worst that can happen is that you are told “no.” However, you do have to be prepared to move your money in this case.



