The Smart Way to Switch Bank Accounts -- and Save a Lot More Money

If you've been putting off switching bank accounts because it feels like too much hassle, you're not alone. Sure, accounts that pay high interest rates and charge low fees are attractive. But it isn't always enough to justify the effort of switching your automatic payments and reconfiguring your direct deposits.

But what if I told you that some banks are paying hundreds of dollars in welcome bonuses? Or that you could supercharge your savings with APYs of 5%? Switching accounts can save you money and make life easier in the long run. Take these steps to do it the smart way.

1. Think about what perks you'd like in your new account

If you haven't shopped around for a new account recently, you may be surprised at some of the features on offer. For example, some banks offer early direct deposit so you can access your paycheck a couple of days ahead of payday. Some checking accounts will also pay rewards on your spending or interest on your balance.

READ MORE: Best Checking Accounts

Here are some useful checking account perks to look for:

• Rewards on spending
• Interest on your balance
• ATM fee reimbursement
• Fee-free international transactions
• Highly rated mobile app
• Early direct deposits

In terms of savings, the APYs on some top savings accounts are as high as 5% right now. That's significantly higher than the national average of 0.46%, per the FDIC. A high APY is important, but it's also worth watching out for fees, minimum deposit requirements, and other inconveniences, such as restrictions on how many withdrawals you can make.

2. Look for a sign-up bonus

Some banks are offering sweet welcome bonuses right now. To qualify, you'll usually have to set up direct deposits of a certain amount of money within a set time frame. You may have to leave it there for a certain amount of time, too. Check the fine print so you can be sure you'll get the extra cash.

Head to our best bank bonuses and promotions page for a selection of all the offers available right now. Chase's $300 bonus for new customers who deposit at least $500 in the first 90 days is particularly attractive. While welcome bonuses should not be the only factor you consider when looking for a new bank account, they are a nice extra.

3. Check for banking fees

Banking fees can come in various forms. You might find monthly account fees, out-of-network ATM fees, overdraft fees, and even fees to close your account. The good news is that many of these fees are avoidable.

Monthly account fees can range from around $5 to $15, meaning you could save $60 to $180 a year with a no-fee account. Some accounts will waive the monthly fee if you maintain a certain minimum balance. Check the terms and conditions and make sure you'll have enough funds available to avoid that extra cost.

If you've been hit with overdraft fees before, try to find an account with a grace period if your balance goes below zero. It's also worth opting into overdraft protection and seeing if your bank will alert you when your balance is low.

4. Make sure there are local in-network ATMs

There's no point in earning a welcome bonus and slashing your banking costs if you have to spend $2 to $5 every time you use an ATM. There are a few ways to cut ATM costs, starting with using in-network ATMs where possible.

Some banks have their own ATM networks, while others partner with an affiliate network such as Allpoint or MoneyPass. Check to see whether your bank has a big network of ATMs and, importantly, whether there are machines in convenient locations for you.

It's also worth considering banks that will reimburse a certain amount of out-of-network ATM fees. This can be a significant money saver, particularly if you travel often.

Key takeaway

If you have savings that aren't earning much interest or you're regularly paying banking fees, you could save hundreds of dollars with a different account. That's before you factor in any welcome bonus or other perks that make it easier to manage your money.

Moreover, it's easier than ever to set up new automatic payments and reconfigure your direct deposits via online banking. This removes a big obstacle that holds many of us back from switching to a new account.