4 signs you're using the wrong bank account

checking bank accountsmoodboard/GettyThere are easy ways to avoid monthly maintenance fees.moodboard/Getty

  • Most people only need a checking account and a savings account.
  • But not all banks are created equal, and choosing the right place to store your money can save - and even earn - you more than you realize.
  • You may consider switching banks if your savings earns little to no interest, your checking account has a monthly maintenance fee, you're paying out-of-network ATM fees, or your bank charges for overdraft protection.
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Most people only need two bank accounts: a checking and a savings.

"I'm a fan of keeping things as simple as possible, regardless of the situation," Brannon Lambert, a CFP at Canvasback Wealth Managementtold HerMoney. "Little benefit is gained by making things more complicated to manage," he said.

Beyond the two must-have accounts, Lambert said, "You may utilize a third account if you want to segregate funds for a specific purpose like a down payment on a home or large purchase." 

But not all banks are created equal, and choosing the right place to store your money can save - and even earn - you more than you realize.

Here are four signs you may need to find a new bank account:

1. Your savings earns less than 2% interest

If you're keeping savings in a traditional savings account, or even a checking account, there's a good chance your money is losing value. A high-yield savings or money-market account can fix that.

These types of accounts will keeping your savings safe and accessible, while also helping it grow. While rates on traditional savings accounts hover around 0.1%, several banks offer competitive interest rates around 2% or higher for high-yield savings and money-market accounts.

The differences between these high-interest accounts are minimal. Both typically limit withdrawals to six times per statement cycle, but a money-market account may come with a debit card or check-writing capabilities. Be mindful that some high-interest accounts also require a minimum balance to earn the highest rate possible.

You can also find high-interest checking accounts at online banks and credit unions.

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2. Your checking account has a monthly maintenance fee

The average monthly maintenance fee on non-interest checking accounts - the account you use probably use to pay for your everyday purchases or monthly bills - is about $5.50, according to Bankrate. While the fee is likely not detrimental to your bottom line, it can easily be avoided.

Most online banks don't levy maintenance fees, so if you're comfortable with no brick-and-mortar, there are plenty to choose from. For those who prefer access to a physical bank branch, you can often avoid an account maintenance fee by either setting up direct deposit to the account or keeping your balance above a certain amount (the average minimum balance amount to avoid fees is $630, according to a Bankrate survey).

3. You're paying out-of-network ATM fees

Nothing is more annoying than paying an extra $5 to use an out-of-network ATM, and you don't have to. Bankrate surveyed more than 200 banks and credit unions and found that 32% offer free ATM withdrawals for customers.

Credit unions are known for low or no ATM fees. Nearly 30,000 credit unions belong to CO-OP, which allows surcharge-free ATM withdrawals at more than 5,000 bank branches across the US. Many online-only banks waive or reimburse ATM fees for withdrawals within the US, too.

Need a new checking account? Consider these offers from our partners:

4. Your bank charges for overdraft protection

Banks often provide overdraft protection on checking accounts, and many don't ask before opting customers into the service. Overdraft protection means the bank will step in and cover the cost of a charge if there's not enough money in your account (you'll still need to pay it back).

Most banks charge around $35 each time a customer overdrafts, according to Bankrate. If you opt out of protection, your charge simply won't go through until you fund your account.

While it's best not to get in the habit of overdrafting, there are dozens of reputable banks that don't charge overdraft protection fees at all.

Personal Finance Insider offers tools and calculators to help you make smart decisions with your money. We do not give investment advice or encourage you to buy or sell stocks or other financial products. What you decide to do with your money is up to you. If you take action based on one of the recommendations listed in the calculator, we get a small share of the revenue from our commerce partners.

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