5 common banking mistakes Aussies should avoid in 2024

Even the best of us can make banking blunders from time to time. Whether you’re just starting your financial journey or you’ve been around the block a few times, steering clear of these common mistakes can help you keep more of your hard-earned cash where it belongs – in your account.

1. Ignoring account fees

It might seem like a small charge, but account fees can add up quickly. Monthly fees, ATM withdrawal charges, and transaction fees are just some of the ways banks can chip away at your balance. If you are one of the many Australians paying unnecessary fees, it's time to compare bank accounts.

Mozo tip: Look for a bank account with no monthly fees and free ATM access. Many banks offer fee-free accounts, so there’s no need to pay for basic banking services.

2. Keeping all your savings in a transaction account

Sure, it’s convenient to have your savings in the same account as your everyday spending money, but you could be missing out on better interest rates. Transaction accounts typically offer little to no interest, which means your savings aren’t working as hard as they could be.

Mozo tip: Open a high-interest savings account or a term deposit for your savings. These accounts offer better interest rates, helping your money grow faster. Plus, keeping your savings separate from your spending money can help you avoid unnecessary splurges.

3. Not taking advantage of offset accounts

If you’ve got a home loan, an offset account can be a game-changer. An offset home loan account reduces the amount of interest you pay on your mortgage by offsetting the balance in your account against your loan. Yet, many Australians might not be making the most of this powerful tool.

Mozo tip: Use your offset account to its full potential by keeping as much of your money in it as possible. Your salary, savings, and even your emergency fund can all live in your offset account, reducing your interest payments and helping you pay off your home loan faster. Learn more about an offset account and how much you could save.

4. Overlooking online banks

The big four banks might dominate the Australian market, but they’re not your only option. Online or digital banks often offer competitive rates, lower fees, and innovative features that can give you more bang for your buck.

Mozo tip: Don’t overlook the benefits of online-only banking players. With fewer overheads, online banks can offer better rates and lower fees than traditional banks. Plus, their apps often include handy tools like spending trackers and goal-setting features.

5. Not reviewing your bank statements

When was the last time you gave your bank statement a good hard look? Failing to review your statements regularly can lead to missed errors, unnoticed fees, and even fraudulent charges.

Mozo tip: Make it a habit to review your bank statements at least once a month. Look out for any unfamiliar transactions and contact your bank immediately if you spot anything suspicious. It will also help you to spot any charges from places like streaming services or gym memberships that you may have forgotten about and no longer use. Keeping a close eye on your account can help you avoid unnecessary losses and keep your finances in check.

Banking doesn’t have to be complicated, but it does require some attention to detail. By avoiding these common mistakes and staying on top of your banking habits, your small efforts could lead to big rewards down the track.