Should You Open a New Bank Account in 2023? 3 Questions to Ask Yourself
- There are several factors to consider when choosing a bank account.
- Online bank accounts are a great option for most people.
- But there are a few instances when you might prefer a brick-and-mortar bank account, such as if you frequently have to deposit cash.
If your old bank account isn't working for you, now's a great time to find a new one.
It's hard to believe 2023 is just around the corner. It seems like only yesterday we were ringing in 2022, hoping for a less stressful year than the two preceding it. And then inflation happened.
We've all had to make some changes to our financial plans this year, and sometimes that means ditching things that no longer work for us. If you think your old bank account might be holding you back, here are three questions to ask yourself when deciding whether to open a new one in 2023.
1. Can you easily access your cash when you need it?
Bank accounts do a lot for us, including keeping our money secure and helping us earn interest. But that doesn't mean a lot if it's a struggle to access your funds when you need them.
A good bank account should have strong online and mobile tools so you can view your balance and transfer funds between accounts. But beyond this, the options you'll get often depend on the type of bank account you have.
You might be willing to settle for limited accessibility if you open a certificate of deposit (CD). Money you leave in these accounts is best left alone if you want to avoid penalties. But for checking accounts you plan to use often, you'll probably want a checkbook, a debit card, and an ATM that gives you easy access to cash. If your current checking account doesn't offer one of these, that could be a sign that it's not right for you.
The way you want to access your funds might also clue you into which type of bank account is best for you. If you rarely deal in cash, an online bank is probably a good fit. But those who need to deposit cash frequently may be better off with a brick-and-mortar bank account.
2. Is its annual percentage yield (APY) competitive?
Annual percentage yield (APY) determines how much interest you earn on your savings. Many of the best savings accounts have APYs of 2.25% or higher right now. These have climbed steadily over the last few months as the Federal Reserve has raised interest rates.
If you already have an online savings account, you're probably already taking advantage of these higher rates, though it wouldn't hurt to look around and see how your APY stacks up to what other banks offer. Brick-and-mortar bank accounts tend to have much lower APYs, though, and they don't change as much over time. So if you have one of these, you may want to consider switching to an online savings account so you can earn more interest on your money.
Some online checking accounts also offer APYs, but it may not be worth switching banks just for this. Checking account APYs generally aren't as high as savings account APYs, and money tends to move in and out of a checking account more quickly, so these accounts usually don't earn as much.
3. How is the bank's customer service?
Most people can handle their daily banking tasks without interacting with a bank employee in person these days. But if you're someone who prefers face-to-face interaction when you need help, a brick-and-mortar bank might be the way to go. Otherwise, an online bank should suit you fine.
Check into when and how you can contact your bank and make sure this is a good fit for you. Some smaller banks may not have 24/7 customer support, forcing you to call back during business hours, and possibly endure longer wait times to be helped. This may not be ideal for everyone.
How to choose a new bank account
Once you've thought about the questions above, you should have a good idea about whether your current bank account is actually meeting your needs. If it's not, you need to think about where it's coming up short and why that is.
Maybe you don't like how difficult it is to access your money. You could fix that by either switching from a savings account to a checking account or switching banks altogether. Weigh all the possibilities and decide what's right for you.
Once you know what you want in a new bank account, compare some of the top choices out there based on the criteria discussed above. Choose the one that best fits your financial needs at the moment, and then fill out an application to open your new account.
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