This Banking Mistake Could Cost You Thousands

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 not having an emergency fund. However, people often overlook the importance of where you put your money.

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This mistake can significantly impact your ability to grow your savings, earn passive income and reach your financial goals. So what is the most common banking error when it comes to savings? Let’s break it down below.

Not Using a High-Yield Savings Account

The national average savings account interest rate is 0.40% 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 interest. 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.

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Each year, GOBankingRates puts together its Best Banks annual rankings. Here are the Best High-Yield Savings Accounts (APYs are subject to change, but are current as of November 2025).

• EverBank: 4.05% APY

• Bask Bank: 4.15% APY

• Jenius Bank: 4.20% APY

• Bread Financial: 4.20% APY

• Western Alliance Bank: 4.10% APY

Too many people make the mistake of keeping their hard-earned money at a bank that does not offer the best products and services. Over time, that mistake could cost you thousands of dollars.

For example, here’s a breakdown of keeping your money in a high-yield savings account vs. a low-interest traditional savings account:

• $5,000 in a high-yield savings account at 4.20% APY grows to $5,210 in one year.

• $5,000 in a traditional account at 0.42% APY grows to just $5,021 in the same period.

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: 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 where it counts more.

Jennifer Taylor contributed to the reporting for this article.

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This article originally appeared on GOBankingRates.com: This Banking Mistake Could Cost You Thousands