How Switching Banks Can Save You Hundreds
- Many banks offer low- or no-fee checking and savings accounts.
- Switching banks could get you a higher savings account interest rate.
- New account bonuses can be worth hundreds all on their own.
These benefits could be worth any hassle.
When things are working as they are, it's easy to get complacent. If it isn't broken, why try to fix it? Unfortunately, this idea can lull us into a false sense of security.
And, if you're anything like me, this can be especially true when changing things seems like a lot of hassle. Somehow, the more work I perceive something to involve, the more likely I am to convince myself I'm happy the way things are.
Take your bank accounts. Many of us have been with the same bank for years -- if not longer. When all of your finances are tied back to the same bank, switching can seem like far too much work to bother.
But what if someone gave you a few hundred bucks to tackle that task? Would it seem like less of a bother then?
This isn't an idle question. Between fees, interest, and bonuses, switching banks really could save you hundreds of dollars every year.
Account fees can add up quickly
Banks have gone through this odd cycle over the last decade or so. When I started banking, you could head into nearly any bank, big or small, and find a free checking account. Heck, they'd even throw in free kitchen appliances.
Then, somewhere along the line, all of these little fees started popping up. And they got bigger and bigger. One day, I realized I was paying $15 a month just to keep my money in the same bank account I'd opened all those years ago.
Now, though, things are coming back around. The competition from online banks -- whose lower overhead means better deals for customers -- has helped tamp down those fees. But if your old checking account hasn't kept up with the times, you may still be forking over your hard-earned money on useless account fees.
If that's the case, switching banks (or even just account types, in some cases) could easily save you $100 or more each year on those irksome fees. If you have multiple accounts collecting fees, you could even be looking at double or triple the savings.
A good interest rate can be hard to find
Speaking of the banking days of yore, remember when high-yield savings accounts actually yielded some savings? Back then, your savings account not only kept pace with inflation -- it left it in the dust.
While the 5% APY savings accounts are likely lost to the annals of time, you don't have to suffer the pitiful 0.06% average, either. Switching to a new bank could net you a much better return on your savings with an interest rate of 1% to 2% or more.
Depending on how much money you have in the account, this could mean hundreds in extra interest each year.
Don't forget the bonuses!
All right, so this one may be burying the lede a bit. If you're a fan of instant (or somewhat-less-delayed) gratification, you'll love new account bonuses. Many banks offer big cash bonuses to people who open new checking and savings accounts. These can easily be worth $100 to $300 -- or more.
As you might expect, there are usually a few conditions you need to meet. For one thing, you'll probably need to hit some sort of minimum deposit requirement. Often, you need to deposit a set amount and leave it there for three to six months.
In many cases, bonuses are tiered based on your deposit size. The more money you can put in the account, the bigger the bonus you can earn.
For some bonuses, you'll also need to have some sort of qualifying activity, such as making a set number of debit card transitions or having a certain number of direct deposits each month. This is usually as simple as filling out a form at work to switch your direct deposits to the new account.
A little bit of work for a lot-a-bit of savings
With all of these potential incentives, perhaps the idea of switching banks is a bit less daunting. For what may amount to half an hour of comparing banks and moving money, you could find yourself several hundred dollars richer. And better off for years to come.
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