Signs a Savings Account Is Worth Switching Banks For

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Here’s how to know if the account you’re eyeing up actually deserves your attention. 

A savings account is one of those things that nearly everyone has but no one gets that excited to shop for. Even though you can make money — possibly hundreds of dollars per year with the right savings account — switching banks can also be a big hassle.

You don’t want to jump ship for just any savings account. Here are three signs the one you’re looking at is actually worth it.

1. It offers a competitive annual percentage yield (APY)

A savings account annual percentage yield (APY) indicates how much interest you can earn on your savings in one year. The best savings accounts right now have APYs around 4.00%. That means that your savings account balance would grow by about 4% in a year, assuming the APY doesn’t change during that time.

The best high-yield savings accounts are usually available through online banks. Since they don’t have branches, their overhead costs are much lower than traditional brick-and-mortar banks, and they pass that savings along to you in the form of lower fees and higher interest rates.

Even if you go with one of these, your rates will still fluctuate over time. But by shopping around and comparing savings accounts from other top banks, you should be able to determine whether you’re getting a good deal.

2. It offers a bonus for new customers

Bank account bonuses are cash bonuses that banks give to customers who open a new account with them and complete certain qualifying activities. This often includes things like keeping your account open for a certain number of months, setting up direct deposit, or maintaining a certain minimum balance.

Bank account bonuses are most common with checking accounts, but some savings accounts offer them as well. This could help you decide between two similar bank accounts if you’re on the fence.

But remember, a savings account bonus is a one-time deal. You’re still going to be stuck with the savings account afterward, so make sure it’s a good fit for you. Pay attention to its APY and how easy it is to access your funds before deciding whether to sign up.

3. It makes it easier for you to access your money

Savings accounts keep your money liquid, but they don’t give you many options for accessing funds directly. You often have to transfer cash to a checking account before you can withdraw it. And many banks limit the number of free monthly withdrawals you can make.

But times are changing. Some savings accounts now offer ATM cards or other means of accessing your cash directly. This can be useful if you don’t have a linked checking account with the same bank and need to access your cash right away.

Think about how you prefer to access your savings account funds and look for a bank that offers these options. If the new bank account you’re considering offers more flexibility than your current account does, that could be worth making the switch.

What to do when you’re ready for a change

If you decide to switch savings accounts, your first step is to apply for the new account. You may need a minimum initial deposit to open it, though many online banks don’t require this.

Once that’s set up, you can transfer the funds from your current savings account to your new account. If you have any automatic bill payments set to come out of your old savings account, change these over to your new account to avoid late fees.

You may wish to close your old savings account if you don’t plan to use it anymore. This is especially true if it charges you maintenance fees. Reach out to your bank to learn how to close it. Once that’s done, you can focus on reaping the rewards of your new and improved savings account.

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