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If you're like most people, you probably don't give your banking relationship much thought on a day-to-day basis. Yet many Americans may not be happy with their banks—according to a 2023 J.D. Power retail banking study, the number of customers with more than $10,000 at their primary bank has declined to 28% from 44% a year prior, meaning some people are moving their money to better fit their needs.
Switching from one bank or credit union to another can be a headache. But the payoff could be worth it —especially if it saves you money or helps you earn more interest. Below are four signs it's time to switch banks and some suggestions on how to choose the best bank for your lifestyle.
1. You’re Not Getting the Highest Interest Available
Not all banks are the same where interest rates are concerned. As of April 2024, the Federal Deposit Insurance Corporation (FDIC) reports that the average national deposit rate banks offered customers on savings accounts was just 0.46%. However, the best high-yield savings accounts feature annual percentage yields (APYs) over 10 times higher than average—some exceeding 4.50% or even 5.00% at the time of this writing.
If your bank isn't offering you competitive interest rates on your balances, it may be time to look at opening accounts elsewhere. The key to earning the highest interest possible might be to open multiple bank accounts. Just be sure you have a plan to manage multiple bank accounts wisely so you don't run into potential problems.
Recommended High-Yield Savings Accounts
Bank Account | APY | Features | Learn More |
---|---|---|---|
|
5.25%
UFB Direct breaks balances into five tiers, but, currently, there is only one interest rate. |
No minimum deposit |
Open Account |
|
0.50% - 4.60%
Customers earn 4.60% APY on savings balances when they set up recurring monthly direct deposit of their paycheck or benefits provider via ACH deposit. Alternatively, deposit at least $5,000 each month to earn 4.60% APY on your savings balance. Checking balances earn 0.50% APY |
No minimum deposit |
Open Account |
|
5.05%
Earn 5.05% APY on balances over $5,000. Balances of less than $5,000 earn 0.25% APY. Annual Percentage Yield is accurate as of July 27, 2023. Interest rates for the Platinum Savings account are variable and subject to change at any time without notice. |
$100 minimum deposit |
Open Account |
|
4.65%
Annual Percentage Yield is accurate as of July 27, 2023. Interest rates for the Savings Connect account are variable and subject to change at any time without notice. |
$100 minimum deposit |
Open Account |
2. The Fees Are Adding Up
Some banks offer customers the chance to avoid bank account fees by meeting certain criteria each month. Yet there are also free checking accounts (and other types of deposit accounts) with no fees and no hoops you have to jump through either. If you decide to change bank accounts to avoid recurring monthly fees, just remember to close your bank account after you make your move. Otherwise, you may continue to incur monthly maintenance fees on your original bank account despite transferring your money elsewhere.
Recommended Fee-Free Checking Account
Axos Rewards Checking Account
- Our Rating 5/5 How our ratings work Read the review
- APYUp to 3.30%
Earn up to 3.30% APY for completing qualifying activities.
- Minimum
Deposit Required$50 -
Intro Bonus
Up to $300Expires June 30, 2024
Use promo code AXOS300 and apply by June 30th, to earn up to a $300 bonus!
Axos Bank Rewards Checking gives customers the chance to earn up to a 3.30% APY on their deposits with no monthly fees. These are all terrific features for a checking account, but Axos is digital-only, so if you deal with cash regularly it’s probably not the best fit for you.
Overview
While it takes a bit of work to unlock the maximum interest rate, Axos Rewards Checking customers can potentially earn an impressive 3.30% APY. This account also does not include any monthly fees.
Read the reviewPros
- Strong APY compared to similar accounts
- No monthly maintenance fee or monthly minimum balance
- No overdraft or non-sufficient fund fees
- Unlimited domestic ATM fee reimbursements
Cons
- Minimum deposit required for account opening
- Several qualifying activities required to earn maximum interest
- No physical branch locations
3. Your Bank Isn’t Keeping Up With the Times
Many banks provide online services and mobile apps that can make banking more convenient for their customers. Yet some banks outperform others in this area. What's more, smaller financial institutions might not be equipped to keep up with the times when it comes to digital upgrades.
Make an honest assessment about whether your bank lacks features that are available elsewhere, such as mobile deposit and online transfer capabilities, online budgeting tools and other useful technology. If you find that your bank doesn't measure up where current technology is concerned, it might be time to see what other financial institutions (especially the best online banks) have to offer in this department.
Recommended High-Yield Savings Account
UFB Direct Secure Savings Account
- Our Rating 5/5 How our ratings work Read the review
- APY5.25%
UFB Direct breaks balances into five tiers, but, currently, there is only one interest rate.
- Minimum
Deposit RequiredN/A - Intro Bonus N/A
The UFB Direct Secure Savings Account has one of the highest interest rates we’ve seen for a high-yield savings account at up to 5.25% APY. Plus, there are no monthly fees and no minimum balance to open.
Overview
With one of the strongest high-yield savings interest rates on the market, as well as no monthly fees or minimum opening deposit, UFB Direct’s Secure Savings Account is an extremely attractive package.
Read the reviewPros
- Strong interest rate
- No maintenance fees or minimum monthly balances
- Free complimentary ATM card
- Mobile app and SMS banking
Cons
- No signup bonus
- No associated checking account
4. You Want More In-Person Banking Options
Online banks don't have the same overhead that banks with brick-and-mortar branches have to factor into their budgets. As a result, they often pass those savings along to their customers in the form of higher interest rates on deposit accounts and lower fees.
Despite this benefit, some people need or prefer in-person banking options. If you deposit a lot of cash, for example, you may need a bank with physical branches. Or you might just like face-to-face customer service where financial transactions are concerned.
Over time, however, some bank branches close or relocate. According to data reported by the FDIC, there are fewer than 4,200 commercial banks in the United States as of 2022. That number is down from roughly twice that amount—8,300—in the year 2000. If your bank has closed or doesn't have enough branches to meet your needs anymore, it might be time to shop around for an alternative.
How to Choose the Best Bank
If you're unhappy with your current banking relationship, your best bet is to ask yourself some questions about the services and products you would like to find in an ideal bank or credit union:
- Do you want to earn a high APY on your savings account, checking account, CD or money market account?
- Are you looking for deposit accounts that charge no fees or limited fees?
- Is the ability to do business in person (in your local area and beyond) important to you?
- Do you prefer a bank that also offers financing products (e.g., loans, credit cards or lines of credit)?
Explore the Best Checking Accounts
Visit the MarketplaceWhatever your banking priorities may be, shop around and search for banks and credit unions that can meet your specific needs. You'll find that the "perfect" financial institution doesn't exist. Yet it may be quite possible to find a bank or credit union that matches the priorities you have added to your banking wish list.