The profits of Australia’s major banks continue to grow, setting new records year after year.

The big four banks collectively made a profit of $27 billion last year and, with Commonwealth Bank (CBA) posting another record profit on Tuesday, the trend looks set to continue in 2014.

CBA posted the largest profit ever by an Australian bank, $8.68 billion, a 12 per cent boost on a year ago. Despite being embroiled in financial planning scandal that triggered calls for a Royal Commission, the bank’s wealth management arm lifted profits by 17 per cent, while 40 per cent of the overall profit came from everyday consumers with savings accounts, mortgages and credit cards.

Its margin on loans to business and residential customers is at its highest level in four years, largely because it has been able to access funding cheaply in overseas markets, while at the same time cutting rates on customers’ deposits.

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With the banks profiting from cheaper credit, and low interest rates improving the overall quality of their loans, right now is a good time to consider how to contribute less to the the big four and how to hold onto a little more for the household budget.

Here are the top tips on how to bank smarter and keep more cash in your own pocket.

Be proactive

Kirsty Lamont, money expert and director of comparison website Mozo.com.au, says the first step for many Australians is to be more attentive.

“It’s one of those things that’s not very exciting and we tend to pay as little attention to it as possible,” Ms Lamont says.

“The problem with that is that’s how we end up wasting money on things like bank fees and overpaying when it comes to things like interest.”

She says knowing when payments are due, being aware of the cost of using an overdraft facility, and managing your money to avoid cash advances can all save money.

Wipe out credit card debt

“A credit card debt is dumb debt and the only people who get rich from it are the banks,” Ms Lamont says.

“Yet the average Australian credit card debt is still around $4,400.”

Don’t let credit card debt get out of hand. Shutterstock

Ms Lamont says consumers should consider taking advantage of the growing number of long-term zero per cent balance transfer deals on the market. See top tips to save on your credit card here.

Conduct an annual banking health check

ME Bank chief executive officer Jamie McPhee recommends customers take time to review their banking products.

“Is your home loan interest rate the best you can get, does your bank penalise you for paying off your personal loan faster, do you pay monthly fees on your day-to-day transaction account, and has your term deposit interest rate dropped unfairly at the end of a term?,” Mr McPhee says.

Likewise, Mozo’s Ms Lamont urges being aware that bank fees can be the “leaky tap of your wallet”.

“That little drip might seem innocuous but over time they really add up. Australian households pay almost $150 year on average in bank fees.”

If you’re not getting a good deal with your current bank then consider jumping ship.

Review your bank statement

Often overlooked, your statement can provide a window into where your extra fees are coming from. By regularly reviewing your statement you can track outgoing payments and pinpoint any errors.

Haggle for a better home loan rate

Mozo’s Ms Lamont says borrowers have saved up to 1.3 per cent from their loan by haggling with the banks.

“A discount of about one per cent on the average loan size of $300,000 could save you around $2000 in interest a year.”

Mr McPhee also says to be wary of cash-back sweeteners.

“While cash back sweeteners are a nice little bonus, always remember that you save more on your home loan in the long-term by locking in a lower rate,” he says.

ATM fees add up more than you might think. Shutterstock

Be ATM savvy

It’s common sense to use your bank’s ATM wherever possible to avoid charges.

But many banks are part of a free ATM network that allows users greater access – an account like ING Direct’s Orange Everyday account will allow you free access everywhere.

Pay with EFTPOS

Instead of risking a fee by using an ATM consider getting cash out when making a payment using EFTPOS – your purchase and cash withdrawal will be counted as one transaction.

Move with the times

Ms Lamont says older Australians are more likely to use cheques and hold traditional bank accounts where you pay a monthly fee.

They could also be losing out on handy interest by sticking with an older, less profitable account.

“If you’ve got a lot of cash sitting there for your retirement nest you want to make sure you’re earning the best rates possible and the best rates are not found with the big four banks.”