3 Reasons to Switch Banks in August

For a lot of people, switching banks can be one of those tasks that sits on their to-do list forever but never makes it to the top. Or maybe you've never thought about switching banks, and you don't know why you'd need to.

It's not a requirement, but it's something that's worth keeping in mind, especially if you don't have a high-yield savings account yet. And if you keep putting it off, here are three great reasons to make your move in August.

1. Interest rates might be dropping soon

Many people expect the Federal Reserve to begin cutting interest rates in the next few months as inflation continues to cool. When this happens, bank account rates usually follow pretty closely. Now's a good time to make your move if you want to take advantage of the sky-high interest rates we've been enjoying for the last few years.

This is most important if you're looking to open a certificate of deposit (CD). Your CD rate is guaranteed for the entire term. That's bad news when rates are low, but good news in times like this when rates are high.

Switching now isn't as critical if you're looking at savings accounts with variable interest rates. But it could still earn you a high APY on your cash, at least for the next few months.

2. You're looking for a way to grow your wealth

Switching banks can prove rewarding in several ways. Online banks typically have much higher APYs than traditional brick-and-mortar banks, which means larger monthly interest payments for you. Most don't charge maintenance fees either, so that's another expense you can take off your plate.

If you need further motivation, some bank accounts offer cash bonuses to new customers, but these are usually only available for a limited time. There are several competitive ones worth $100 or more expiring in September and October. If you hope to take advantage of these, now is a good time to switch banks.

Just be careful about opening a new bank account specifically for the bonus. You'll still have the account afterward, so make sure you like it. You also need to make sure the bonus requirements are achievable before you try to claim it.

3. You're unhappy with your current bank

There's no need to stay with a bank you're unhappy with in this day and age. There are tons of great online options available today, and switching is pretty easy. Most enable you to apply online within a few minutes. Then, you just transfer funds over from your existing checking or savings account.

If it feels too overwhelming for you, break it down into a few steps. First, think about what types of bank accounts you're interested in opening and the features that matter most to you for each one. Then, look for the top banks that offer these accounts and compare them. Explore the bank's customer service and the quality of its mobile app too. Once you've settled on one you like, open your new account and transfer your funds.

If you plan to close an existing account, remember to transfer any automatic bill payments or direct deposits to the new account first. Otherwise, you could run into problems with late payments or difficulty accessing your funds.