One of the most common causes of smelly, moldy towels is a lack of thorough drying after they've been washed. Use the highest heat setting on your dryer to make sure towels are completely dry after they've been in the washing machine. If you are trying to conserve energy and need to take them out while they are a little damp, hang them up in an open-air space until they are completely dry. This will help to ensure moisture doesn't become trapped in the fabric, resulting in a moldy towel.
Keep Your Washing Machine Clean
You probably don't think about it often, but your washing machine is the place where you cleanse some of the dirtiest items in your home: your clothing. In fact, humans shed 1 billion skin cells daily, most of which are shed onto your clothing. Then, this clothing is put into your washing machine. To keep towels fresh, clean out your machine before washing a load of towels. One way to do this is to wash a load of whites with bleach just before you wash your towels to ensure maximum freshness and cleanliness.
Wash Towels Frequently
Another way to keep your towels feeling and smelling fresh is to wash them frequently. Don't use a towel more than three times without washing it. Any more than that, and you may start to accumulate dead skin and other dirt, grime and bacteria on it, even as you continue to use it repeatedly. When you do wash the towels, do so in small loads and use hot water in your machine.