Why Now’s a Good Time to Search for a New Bank

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It pays to snag a higher interest rate on your money if you can. 

There was a time not so long ago when banks were paying such a small amount of interest on savings accounts and certificates of deposit (CDs) that it almost wasn’t worth trying to chase a better deal. But these days, savings account and CD rates are much higher. So if you’re not getting a great return on your money, it pays to look elsewhere.

Don’t sell yourself short

You might think that snagging a higher interest rate on your money isn’t worth the hassle of having to look around for a new bank and get used to using it. But actually, getting a higher rate of return on your money could get you closer to meeting different financial goals.

Let’s say you have $10,000 in your savings account and are earning 2.5% interest on your money. That means you’re getting paid $250 a year.

But what if you were to find a bank offering 4% interest on savings accounts (which is possible these days)? That would put $400 back in your pocket instead of $250.

Meanwhile, let’s say you’re almost done paying off your credit cards but still have $500 in debt to contend with. Wouldn’t getting an extra $150 in interest from your bank help you get closer to knocking out that balance once and for all?

It’s not just about the higher interest rate

Because interest rates are generally higher across the board right now, it does pay to chase a more generous one than what you’re getting today. But that’s not the only reason to look at switching banks. You may want to make a move if your current bank doesn’t offer such a great digital experience, and you’re looking for the convenience of an easy-to-use platform for your online banking.

A recent study by The Ascent found that 91% of consumers regard digital banking as an important factor in choosing a bank. And consumers also tend to prioritize security and fraud protection.

As such, it could benefit you to move to a bank that makes managing your money digitally a snap. And in researching different banks, dig into what steps they’ve been taking to keep your money secure.

When change isn’t easy, but necessary

If you’ve banked with the same institution your entire life, then moving to a new bank is apt to be an adjustment. And there are certain steps you might need to take as part of that transition, such as contacting your payroll department at work and arranging for your direct deposits to land in a new account, and switching certain bills that are set up to get paid automatically.

But if there’s a bank out there offering a much higher interest rate than what you’re eligible for, then it pays to snag a higher return on your saved money. And while you’re at it, you might find a bank that offers a better, more secure digital experience on a whole. In a world that’s going increasingly digital by the day, that’s really important.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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