2 Banking Mistakes That Could Cost You Thousands, According to Experts
Written by
Caitlyn Moorhead
Edited by
Nick Friedman
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There are a lot of mistakes you can make with your money. You might tend to focus on the big ones like overspending, racking up credit card debt or having no emergency fund. Most people, however, don’t consider how much where you put your money matters.
Not keeping your money somewhere that pays a decent annual percentage yield (APY) is a simple mistake that too many people make, along with choosing the wrong bank in general. Both of these mistakes can cost you some serious money, so here’s why you should avoid them.
Why You Need a High-Yield Savings Account
The national average savings account interest rate is 0.42% APY, which isn’t great. If you open a traditional savings account, you’ll likely be offered a rate somewhere in this neighborhood.
On the other hand, a high-yield savings account typically pays much higher. This allows you to earn passive income on your savings with no risk. It’s the least any decent bank should do for you as a customer. Even better, look for a high-yield savings account that offers interest that compounds daily, which grows your money at an even more rapid pace.
GOBankingRates has put together the Best Banks annual rankings for 2025. Here are the Best High-Yield Savings Accounts for 2025 (APYs are subject to change, but are current as of January 2025).
- EverBank: 4.75% APY
- Bask Bank: 4.50% APY
- Jenius Bank: 4.80% APY
- Bread Financial: 4.50% APY
- Western Alliance Bank: 4.35% APY
Why Choosing the Wrong Bank Could Cost You Thousands
Too many people make the mistake of keeping their hard-earned money in a traditional savings account. Over time, that mistake could cost you thousands of dollars. Here’s a breakdown of a few key examples:
- If you deposited $5,000 in a Jenius Savings account, then didn’t touch it for an entire year, at 4.80% APY you would have about $5,243. With that same deposit in the EverBank high-yield savings option, you would have approximately $5,238. Both are very good increases of your initial deposit — and you didn’t have to do anything.
- A deposit of the same amount looks a little different with a traditional savings account with an APY of 0.42%. After one year, you’ll have just $5,021, rising to $5,105 in five years and $5,210 after 10 years, assuming the same initial deposit and a 0.46% APY, compounded daily.
- Over the long haul with a traditional savings account, that’s $3,000 less in your savings — just for choosing the wrong bank.
When you open a high-yield savings account, try to find one where you’ll pay no fees. This means no charges for monthly maintenance, withdrawals, inactivity, overdrafts, account opening, account closure or excessive transactions. This way, your money only grows and you can reach your financial goals faster.
Plus, your money is FDIC-insured up to $250,000. Additionally, there are no minimum deposit requirements, so you won’t have to worry about having a certain amount available to open the account or keeping the right amount of money in it. No matter what the size of your balance, you’ll still be able to earn.
Final Take To GO: How To Start Earning a High APY
The bottom line is that putting your money in a high-yield savings account will only grow your wealth faster. If you’re ready to help your money earn more for you, as you’ve seen, keeping your money in a traditional savings account may be a costly mistake. It’s time to put your money to where it counts more.
Jennifer Taylor contributed to the reporting for this article.
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