This is one of my favorite ways to fold towels. I also like rolling them. But there's a specific way to do these folding methods to make them look good. They could easily be sloppy looking. So here is how I do this fold above and a roll.
Now, it depends on the space you have for your towels, which method works best for you.
At this client's house this method works best. The rolling method would take up too much space and not stay very well. At home we have a very small linen closet and so the rolling works best for that.
For the above fold, you take the full size towel and fold it in half (below)
and then fold it in half again. (below)
Then you take the right side and fold it to the left in thirds, (below)
then you take the left side and fold it over the right side and it should fit perfectly. (below)
Then you flip it over and tuck in the little nub that may be sticking out. (below)
Now it looks smooth and pleasing to the eye. (below)
Depending on which way your towels orient on the rack or shelf I would have none of the edges visible if possible. I like only the rounded edges showing. It has a clean organized look to me.
Here's how I fold the hand towels.
Fold the right side in thirds to the left, then you fold the left side over the third of the right. (below)
Flip it over and here it is. No edges showing, which is beautiful in my book. (below)
For the space that I have at this particular house I just fold the washcloths in half and place them on the shelf. (below)
Voila! Beautifully folded towels!