7 Banking Mistakes You’re Making, According To Actual Bank Employees

With plenty of other things on your plate, it can be easy to push all of those banking-related tasks — like dealing with annoying monthly statements and checking out the latest interest rates available for those who open new savings accounts — to the back burner.

But when you only check on your funds to pay bills, you might be missing out on the opportunity to earn more. And in some cases, you could even lose money from your account.

But don’t worry, we spoke with several banking professionals to find out what common banking mistakes they see so you can avoid wasting your own money.

"The most common mistake people make is thinking that because they have been approved for a loan or credit card, it must be a good idea,” says Gates Little, CEO and president at The Southern Bank Company.

Little explains that just because a bank markets credit cards or loans to someone, it doesn’t mean that they can afford it. “The only way to know if you can live with debt is to keep a budget and try to be realistic about how much you need to live on,” Little continues. “People should know if they can afford a payment before asking a bank because getting approved is not the same."

The next time your bank provides a loan or credit card offer, run the numbers for yourself to confirm it suits your financial needs.

“One of the most common mistakes that I’ve seen is that people will leave large amounts of funds sitting in low interest-bearing accounts,” says Brandon Stout, a relationship advisor with Addition Financial Credit Union, a Florida-based credit union.

“There is nothing wrong with having money set aside for the future, but you should always make it a priority to find [an] account that is able to maximize your return, such as a CD or high-yield savings account or money market,” Stout continues. “You worked for the money, so let that money now work for you.”

If you want to rectify this mistake, consider moving your funds to a high-yield savings account.

If you don’t have an account set aside for a rainy day, you’re not alone. “One mistake I’ve noticed people make that is an easy fix is the absence of an emergency savings account,” Stout says.

“Americans across all sectors of the workforce have struggled with managing their funds in a post-pandemic economy,” he continues. “I always advise my members to set aside something as low as $50 a paycheck into an emergency savings account to prepare for any future expenses.”

Life moves fast, Stout explains, and you never know when you’ll encounter a roadblock which is why he suggests saving now so “future you” can focus on the tasks ahead.

Many experts suggest tucking away enough money to cover between three to six months worth of expenses. That being said, even having a few hundred dollars set aside in an emergency fund can help you avoid financial struggles after an issue.

Falling victim to fraud can derail your finances. And, unfortunately, too many fail to protect themselves from these kinds of bad actors.

“I have personally witnessed the rise in fraud-related cases and the direct effect it has on the victim as well as the financial institution,” Stout says.

“To ensure your funds are protected from these digital age grinches, follow my three-step rule,” he says. “Never discuss banking information with anyone besides your financial institution and/or fellow authorized users, be cautious of unknown emails and clicking on suspicious links, and double-check that you have updated security notifications and two-factor authentication set up for your accounts and cards.”

“A mistake so many people make is not taking the time to put together a budget,” Stout says.

“The flow of your cash should be calculated down to the very last penny in order to avoid any fees associated with overdrafting on your account.”

With average overdraft fees sitting around $35, this mistake can add up quickly.

“Budgeting is also a great tool for learning how you spend from month to month and how you can avoid unnecessary financial headaches and discover new opportunities for saving.”

Many financial institutions offer some kind of way to grow your money, which is an investment.

“Some people see the word ‘investing’ and turn the other way,” Stout says. “I am here to tell you, not only is it not as intimidating as it sounds, but you could be missing out on some great opportunities to grow your money.”

Those opportunities include everything from opening a Certificate of Deposit all the way to meeting with a brokerage service representative,” according to Stout.

“No matter what your short (or long-term) financial goals are, I always recommend for anyone to inquire about the investment opportunities that your institution offers as well as ‘rate shop’ to find the best way to diversify your portfolio.”

Stout says another big mistake he often sees involves people who don’t adapt quickly to changing banking technology.

“Most, if not all, financial institutions offer direct deposit and mobile/online banking that allows you to have instant access to your funds whenever you need it,” Stout says. “This ability allows you to have an accurate and up-to-date view of your account anytime and anywhere.”

Not only that, but Stout says that there’s not too much risk associated with these apps, which makes them beneficial to use. “These processes are fast, secure and offer you the greatest gift of all, peace of mind.”

When it comes to managing your money, paying attention to your bank account can go a long way. For many, taking the leap to open a new bank account with lower fees and better interest rates can help you take charge of your wealth-building journey.

Consider heading into your financial institution to talk with your bank representatives to ensure you’re not making any mistakes.

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