3 signs you need to switch banks now
With inflation still persistent and the interest rates to combat it higher than they've been in years, it's clear the old ways of doing business are over. In today's economic climate, Americans need to take a closer look at their finances and be more judicious about where they keep their savings and do their banking. Even if you're comfortable using your current bank or credit union, it may not be the best institution to be using now. In fact, you could even be losing money by leaving your accounts where they are.
But how do you know when your bank is valuable and when it's time to look elsewhere? Below, we've compiled a list of signs that you should switch banks now. While this is not exhaustive (everyone's personal financial situation is different), it should provide a good barometer for those considering a move.
Start by exploring high-yield savings accounts with different banks here to see how much more money you could be earning.
3 signs you need to switch banks now
Here are three signs it's time to move your money elsewhere.
You have a low interest rate
The average interest rate on a regular savings account is around 0.40%, according to the FDIC. Rates on high-yield savings accounts, meanwhile, are exponentially higher. It's not unusual to find an account offering an interest rate that's 12 times more than what can be secured with a regular savings account. That's substantially more money you could be making simply by switching your savings from your current bank to one offering high-yield accounts.
How much more money are we talking about? Using a $5,000 deposit for an example, that money left in a regular account will grow to just $5,020 after one year. But if you put it into a high-yield account earning 4.85%, that same deposit will increase to $5,242 over the same period. The more you deposit, obviously, the more you can take advantage of the high rate.
Just don't accept the first interest rate you get that's higher than your current bank. Shop around first to find the highest rate possible. Get started here now.
You're getting charged fees and penalties
It's difficult enough to build up your savings. Don't let it get eaten up by maintenance fees and minimum balance penalties. There are many online banks that both provide high interest rates and no fees, letting your money grow uninterrupted.
That said, these accounts are generally offered by online banks. Because these institutions don't have the same overhead costs as banks with physical branches, they generally have lower expenses. They pass these savings on to account holders in the form of higher interest rates and reduced or eliminated fees and penalties.
You do most (or all) of your banking online already
If you're a member of a bank with physical branches but you do most or all of your banking online anyway, that's a sign you should consider switching to an online one. As mentioned above, online banks can provide much higher interest rates and little to no fees and penalties.
While an online bank may not be advantageous for someone who likes to visit their local branch and do their banking in person, it's likely preferable for those already doing their banking online. In this case, the transition to an online bank should be relatively seamless, and you'll earn more interest and pay fewer fees. It's a rare win-win-win.
Check your online high-yield savings account options here now and get started.
The bottom line
In today's economic climate, you don't want your savings to suffer from inertia. You may be earning the highest interest possible with your current bank (and not getting hurt by fees and penalties). But if you're not, and you're already doing the majority of your banking online, it may be time to switch banks. By moving your money into an online account, you can earn more interest, pay fewer fees and enjoy the ease you're already used to by banking electronically.
