Ok - so we might think our day to day banking is a pretty simple affair - but getting it wrong can cost hundreds in fees! Also, putting your money into a bank account doesn't mean you can just go ahead and forget about it. It's your money so you should make sure it is being looked after in the way you want, whilst minimising the fees and charges along the way.

There are lots of different bank accounts so make sure the one you have is right for you. If it's not, think about switching. It might seem like a big deal or a bit daunting, but you could save lots of money in fees and be easier than you thought.

So what are some of the different styles of accounts out there?

Types of Bank Accounts
There are two main styles of bank accounts:

1. Transaction accounts (or everyday accounts)

2. Savings Accounts

1. Everyday Banking Account

Just about everyone has an account with a bank, credit union or building society. This is to receive wages, basic benefits, take out cash and pay the bills. They're usually referred to as 'savings' accounts but they should really be known as 'spending' or transaction accounts.

Depending on which institution you're with, you pay different levels of fees depending on how, when and where you take out your money.

The trick is to find a transaction account that costs you the least amount in fees and suits your own everyday spending habits. We're all different, so here are a couple of things to think about when choosing a transaction account:

* Compare fees and charges

* Use a debit card NOT a credit card

Compare Fees and Charges

Run yourself a basic budget and ONLY keep the money you need to cover everyday costs in your transaction account. This means food and petrol and entertainment for most people. Put the rest of your money in a high interest savings account and watch your savings grow with the extra interest. Alternately, offset it against the Mortgage and save possibly years in interest!

As you probably know - different types of accounts charge different fees. Banks can charge you for:

* Monthly account keeping fees

* ATM fees (for your bank's ATMs and extra for using another bank's ATMs)

* Phone banking fees

* EFTPOS fees

* Internet banking fees

* Branch fees

Have a good think about how you like to access your money and then find the account that offers the lowest fees for your preferred method. So, if you like to withdraw small amounts of money from an ATM, you need an account that has very low or no ATM fees. Alternately, plan to withdraw cash with certain EFTPOS transactions.

To take the legwork out, you can easily compare hundreds of accounts, cards and loans and their features at RateCity. Banks and credit unions can differ greatly in their approach and you may find that the community style approach of credit unions, who are focused on their members, is much better suited to you than the Big Business approach of the Big Banks who are all accountable to their shareholders, not account holders.

Use a Debit Card Instead of a Credit Card

You may have seen ads on the TV for debit cards that are offered through your existing bank and can be attached to your already open account. These cards let you pay for things over the phone or via the internet with your own money instead of racking up purchases on credit.

Banks regularly offer new accounts with more competitive features. Every year to two, you should look closely at fees and features of new accounts and consider switching if you find an account that's more suited to your needs.

2. Savings Accounts: Grow Your Savings Faster

Savings accounts are specifically designed to help your savings grow more quickly. They offer a higher interest rate than transaction accounts without locking funds away like a term deposit.

Some also make it harder for you to access the funds so you aren't as tempted to dip in and spend. With more money saved, you may just be able to take that dream holiday or save the deposit for your first home sooner. Do note:

* Savings accounts are different

* Find an account that's right for you

* You will pay tax on your savings

How Savings Accounts Differ

Most people choose online savings accounts which are convenient because you can easily transfer money to and from your transaction account into the savings account.

Online savings accounts are designed so you leave your money alone so it can grow through compound interest. Some savings accounts even reward you with higher interest if you make regular deposits into the account with no withdrawals. If you are saving for a home, consider getting a first home saver account.

Compound Interest

Remember doing this at school? Compound interest has been likened to double chocolate topping for your savings. You earn interest on the money you deposit, and on the interest you earn - so you're earning interest on interest.

There are many compound interest calculators available on the net to see how compound interest can help you can increase your savings. As an example: If you deposit $20 a week into a high interest savings account earning 6% interest, from the day your child is born, after 21 years they will have over $43,000 and this can be done with automatic transfer payments too. I just wish my parents had done that for me!

There are also savings accounts specifically for children that reward your child for making regular deposits - Bank West have a good example of this. However, it is important to understand how income earned in these accounts is treated for tax purposes. (Check with the ATO to see how these accounts are taxed.) Setting up one of these accounts with your child can give you the chance to talk to them about the value of saving if they're old enough. It's never too early to teach your kids about money.

How to Find an Account That's Right For You

To help decide which savings account is the best one for you, compare the following features:

* The interest rate: how regularly will you receive the interest and how long any introductory rate applies

* Minimum and maximum account balances - ideally you want to be earning interest on every single cent in the account

* Account keeping fees

* What interest you will lose if you withdraw money

* What rewards you get if you deposit money regularly

* Whether or not you need a linked account

You can also check whether the account is offered by an Authorised Deposit-taking Institution (ADI). ADIs are regulated by Australian Prudential Regulation Authority (APRA) so your money is safer with them.

Check whether the institution offering the account is on APRA's list of Authorised Deposit-taking Institutions. Always remember that online savings accounts may give you less access to your money than ordinary transaction accounts.

Paying Tax on Your Savings

Remember that any interest you receive from your savings account must be declared in your tax return and is then taxed at your marginal tax rate. But it is better to have an additional income with the interest to declare than no additional income from savings.

If you are serious about trying to save, open a savings account. You can take advantage of their higher interest rates to help reach your savings goals sooner.

For more tips about understanding money and banking read on!