Should You Take Your Money and Run — To a New Bank?

# Should You Take Your Money and Run — To a New Bank?

Savings account rates are climbing, and staying with a bank that offers below-market yields costs you money over time. NerdWallet examines whether switching banks makes financial sense.

The decision hinges on comparing your current rate against what new banks offer. High-yield savings accounts at online banks frequently beat traditional brick-and-mortar banks by substantial margins. A 0.5% rate at your current bank versus 4.5% elsewhere means hundreds or thousands in foregone interest annually, depending on your balance.

Switching involves practical considerations. Opening a new account takes minutes online. Transferring funds happens electronically within days. You'll need to update direct deposits and automatic bill payments, which requires time but no special skills. Some banks offer switching bonuses to new customers, offsetting hassle.

The math becomes clear quickly. Calculate annual interest at your current rate versus rates at top competitors. If the difference exceeds what switching requires in effort, moving makes sense. Online banks typically offer the highest rates because they lack physical branch networks and overhead costs.

Your existing bank may match competitor rates if you ask, though this rarely happens. Calling and requesting a rate increase costs nothing and sometimes works.

Convenience factors matter too. If you value in-person branches or prefer consolidating accounts at one institution, staying put might outweigh rate differences. But for those comfortable with online banking, rate shopping and switching delivers real savings.

The rising rate environment makes this decision timely. Banks adjusting rates upward create an opportunity to evaluate whether your current institution still serves your financial interests.