Should You Open a New Bank Account in 2023?
- Savings account interest rates have increased, but not for everyone. Opening a new account may net you a higher rate.
- New bank accounts, like new credit cards, often come with sign-up bonuses.
- Sticking with your current bank because it's familiar may be stopping you from finding a new bank that's a better fit.
A new year, a new bank account.
Those who love credit card rewards are often quick to open a new account whenever we find one with a nice bonus or good perks. Or you may get a new card because it simply suits your lifestyle better than your current cards.
But few people consider doing the same with their bank accounts. The truth is, there are just as many good reasons to open a new bank account as there are to open a new credit card.
If you haven't considered whether you could benefit from a new bank account, 2023 may be the time to give it some thought. Here are a few ways a new account could be beneficial.
Savings account APYs going up for some
In a supposed effort to curtail inflation, the Fed has increased interest rates by record amounts this year. This was bad news for folks looking for a mortgage. And for those who are dealing with credit card debt.
However, the increased interest rates have actually led to something we haven't seen in a while: higher savings account interest rates.
While the average rate is still quite low -- less than 1% -- you can now find standout accounts offering 2% to 3% APYs (annual percentage yields). You'll find these rates most often when looking at online-only banks, but you may find something in that range at some of the more forward-thinking brick-and-mortar banks, too.
If your current bank account is still stuck in the past when it comes to savings APYs, switching banks could wind up being very lucrative.
This is especially true if you've managed to put aside a proper emergency fund. (Most experts now suggest having a 12-month emergency fund.) It's wise to keep that fund in a high-yield savings account where you can minimize the impact of inflation on your savings.
New account bonuses can be valuable
Another thing to consider when contemplating a change in banks is that most banks will offer you some sort of new account bonus. Very similar to the sign-up bonus for a new credit card, bank account bonuses can be worth hundreds of dollars.
New bank account bonuses are frequently offered for savings accounts, but you can find them for checking accounts as well. They're even offered for business checking accounts if you own a small business (and yes, sole proprietors can open business bank accounts, too).
Make sure you read the fine print for the account bonus before you open the account. Most bank account bonuses require you to meet a few conditions to earn the bonus.
The most common condition is some sort of minimum balance requirement. You'll typically need to deposit a minimum amount of money into the account within 30 days of opening it. The larger the new account bonus, the more you'll likely need to deposit.
Often, you'll then need to maintain that minimum balance for the first 90 days -- or more, as some may require up to six months -- before you can earn the bonus.
Another common condition to earn a new bank account bonus is making a minimum number of transactions within a set period of time. You may need to have a certain number of direct deposits, for instance, or meet a minimum transaction threshold. Checking accounts, in particular, will commonly ask you to make a number of debit card transactions as a part of a new account bonus requirement.
New goals, new bank account
One common reason to open a new bank account -- specifically, a savings account -- is to use it to save toward a goal. If you have any new financial goals for 2023, opening a new bank account could help you keep that goal on track.
For the best results, set up the new account at a different bank than your usual accounts so it's harder to access the funds quickly. As the old adage goes, out of sight, out of mind.
You can also consider setting up automatic transfers to your new account so you can save without thinking about it. (Just be sure this won't cause you to overdraft in another account!) Even a small amount transferred every week, or every paycheck, can add up quickly in a high-yield account.
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