3 Banking Mistakes to Avoid Like the Plague in 2023

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These could all leave you kicking yourself. 

The money you have in the bank most likely isn’t money that landed there because you won the lottery or came upon an unexpected windfall. Rather, it’s money you most likely worked for by toiling away at your job, and maybe even a side hustle on top of that.

That’s why it’s so important to pay close attention to your bank accounts — and make the time to check up on them. It’s also important to avoid these big mistakes — both in 2023 and in general.

1. Not shopping around for a better interest rate on your money

The interest rate you earn on your savings account or in a CD might vary significantly from one bank to another. Even if your bank seems to be paying a pretty generous amount of interest, it still pays to do some research and see what other banks are paying — especially these days.

A year or so ago, this advice wouldn’t have really held up. Back then, banks were paying such a minimal amount of interest that there was almost no point in putting in the time to earn an extra $0.72 in interest in the course of a year.

But these days, banks are paying a lot more interest. You might easily, for example, snag an interest rate in the 3% range in a high-yield savings account and a rate in the 4% range for a CD. So if your bank is paying 3.2% on regular savings but there’s a bank out there paying 3.7%, that’s a big difference.

2. Paying overdraft fees in your checking account

A growing number of banks are doing away with overdraft fees, which can be costly. But some banks will still charge you for overdrawing your checking account. And if yours does, then you may want to consider either making a switch or managing your money very carefully.

It’s possible to avoid overdraft fees by simply making sure you have enough money in your checking account to cover your purchases. If you make a point to review your checking account balance every few days, you might avoid losing money to fees.

3. Not making a plan for CDs that come due

If you put money into a CD in 2022, it may be maturing in 2023 (that is, if you opted for a six-month or 12-month term). Some banks will automatically roll a maturing CD into a new one with the same term if you don’t take action. But that’s not necessarily what you want to do with your money, so rather than let your bank make that call, be the decision-maker yourself.

You may decide that you don’t want to roll your maturing CD into a new one because you want more flexibility with your money. Or, you may find that another bank is offering much better CD rates, which should prompt you to make a switch. The key, either way, is to not just sit back and let your CD roll over automatically.

Mistakes happen. But these three in particular could be detrimental to your finances in 2023 — and beyond. So it pays to avoid them at all costs.

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