Key takeout
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American adults usually have the same checking account for more than 17 years, missing out on better interest rates and services.
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Switching to a high-yield savings account will allow you to earn hundreds or thousands of dollars of interest each year.
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Online banks often offer higher APY and fewer fees compared to traditional brick and mortar institutions.
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Many banks offer sign-up bonuses to new customers opening accounts.
Many Americans have long-term relationships with banks, often stuck on the same checking account for 19 years, and bankrate research shows that they stick to the same savings account for almost the same length of time. Bank loyalty may seem like the path to least resistance, but maintaining a put may mean missing out on valuable benefits that suit your financial needs.
By comparing current banks with alternatives, you may discover options that offer higher interest rates, better digital banking capabilities, more convenient ATM access, and other benefits. Below are five reasons to consider creating a switch:
1. Higher APY on Savings
Staying at your current bank can mean you’re earning significantly less profits than you can. In fact, most Americans miss the benefits of high-yield savings accounts. Almost two-thirds (67%) of Americans in savings earn a percentage of less than 4%.
Moving savings to a bank that pays a higher APY can add hundreds or even thousands of dollars of interest income each year.
– Greg McBride, CFA, Bankrate Chief Financial Analyst
“You can earn additional interest without sacrificing the safety of federal deposit insurance or accessing money when you need it,” McBride said. “Getting it to get an extra return without taking any risk is the only free lunch in finance.”
Competitive yields in savings accounts are often seen in online banks. This allows customers to pass their savings to their customers in the form of higher fees without the cost of maintaining the branch.
Check out Bankrate’s best high-income savings accountsIt currently exceeds APY of over 4%, up to 40 times the rock bottom yields offered by many traditional banks.
2. Low (or no fee)
Another way to stick to your current bank is that if you are charged monthly maintenance fees, it can cost you. Some banks will waive fees if they maintain their minimum balance or receive direct deposits. However, if you are charged such a service fee, they can sum up quickly and may deny the interest you are earning.
If you charge monthly fees that your account is not easy to avoid, finding an account that doesn’t match you with such fees could save you hundreds of years. Consider these typical bank charges that can drain your account.
- Monthly maintenance fee ($5-15 per month)
- Out-of-network ATM fees (average $4.77 per transaction, according to bank rate surveys)
- Overdraft fees (average $27.08 per incurred, according to a bank rate survey)
- Paper Statement Fee ($2-5 per statement)
- Wire transfer fees ($15 to $50 per transfer)
Many online banks and some credit unions offer completely unpaid checking accounts with no minimum balance requirements. List of the best checking accounts on Bankrate It helps you find options that are not nickel and dime at the rate.
3. Wide branch availability and ATM access
If face-to-face banking is important, consider whether your current bank will provide access to the branches you need. Many consumers prefer the sense of personal support that comes with visiting tellers to trade or ask questions.
Large national institutions such as Chase, Bank of America and Wells Fargo offer an extensive network of branches across the country, but regional banks may offer better coverage in certain regions.
However, if you frequently pay out of network ATM fees, consider finding a bank that offers:
A potential drawback for choosing a bank with a large branch footprint is that many such institutions tend to pay lower APY. Consider a hybrid approach. Keep your current account in a bank with convenient branches, while maintaining your savings with online banks that value your savings.
4. A better digital experience
Not all banking apps and websites are created equally. Because some people offer a more seamless and user-friendly experience than others. If digital banking is important, research what different banks have digitally offerings.
Beyond the basics of checking balances, paying bills and transferring money, today’s best banking apps include:
- Zelle or similar services for instant peer-to-peer payments
- Card Security Control (Debit Card Lock/Remove Lock)
- Automatic spending classification for budgeting
- Credit Monitoring Services
- Early direct deposit access (get pay up to 2 days earlier)
- Automatic savings tool to purchase or analyze purchase patterns
If such perks are not included in current bank apps or websites, it is not difficult to find a bank that will offer them. Find your bank’s app on Google Play or Apple’s App Store and see what your app looks like and user-generated ratings.
5. Value alignment
Some consumers emphasize that they put their money in a bank that matches their values, beliefs, or causes that matter to them.
Political Values: A fused bank could be an option for consumers with progressive political leanings. Banks known as banks that serve union workers also support the causes of social responsibility.
Faith-based values: The Adelfi Credit Union is a university’s Islamic finance and an institution with a religious affiliation. The Kosher Financial Institute is a resource that lists banks and lenders who comply with Jewish law.
Eco-friendly banks: Financial institutions that report participating in eco-friendly practices include Forbright Bank, Limelight Bank and Climate First Bank.
Resources to find banks that match your values ​​include Mighty Deposits, a website that compiles data on how banks invest their money and how they own them. Another option is the Global Alliance for Value Banks. Its members include banks that meet certain criteria for environmentally friendly practices and community-first practices.
Additional perks worth considering
If you’re in the new banking market, here are some additional perks to look for:
Bank Account Bonus: Some banks will pay a sign-up bonus of $200 and $300 or more to new customers opening accounts.
Star Customer Service: Bank customer service-related perks may include extended phone support hours and live online chats with representatives.
Extended branch hours: If you work in the office all day, you can thank a bank with branches that are open outside of normal hours, such as on weekdays or Sundays.
swag: This isn’t the case anymore, but some banks offer free items to new customers. These days, the most likely you will receive when opening an account in a branch is a mug or magnet.
Historically, however, some banks were known to hand out stolen goods, which are step-ups from pens or rulers. For example, the first Republic Bank, now decommissioned, gave umbrellas to new customers who painted the bank’s logo. Harris Bank, now part of BMO Harris Bank, has given new customers a gorgeous toy toy to the likeness of Hubert, the bank’s lion mascot.
How to search for a new bank
Bankrate offers resources to help you find a bank that meets your specific needs. Start by identifying your bank’s priorities.
- Decide what is most important: Higher interest rates? Low price? Branch access? Digital features?
- Research options: Compare banks using Bankrate’s guide to compare them with the best checking accounts, the best savings account fees, and savings calculators.
- Consider a hybrid approach. You don’t need to store all your accounts in one bank. Many people maintain accounts in both online and traditional banks and maximize profits.
- Check out the account switching service: Many banks offer switch kits that help you transfer direct deposits and automated payments.
Remember that switching banks doesn’t have to be all propositions. You may decide that it is smarter to open a new, high-yield savings account while maintaining a checking account in your current bank, or to open a CD for long-term savings while maintaining an existing account.