2 Red Flags Your Bank Is Putting Profits Above Your Financial Health

I discovered it was legal for a bank to kick me while I'm down the first time I saw a string of overdraft fees hit my checking account. The kicker? I'd been charged more than one fee on the same day -- and I hadn't even realized my balance was low. Surprise! Talk about brutal.

Since then, I've discovered that banks have a surprisingly stuffed toolbox they can use to nibble away at your savings. Don your glasses, folks. The following are two red flags your bank is putting profits above your financial health. More than usual, anyway.

1. Hidden or complex fees -- what are they hiding?

Banks that charge hidden and complicated fees are waving red flags. Read: run. This is 2024. A complicated fee structure is not necessary to hold funds or stay solvent.

In fact, the Consumer Financial Protection Bureau (CFPB) has proposed capping fees to as little as $3 for big banks and credit unions. Today, banks are charging you a whopping average of $27 per overdraft!

Our Picks for the Best High-Yield Savings Accounts of 2024

Product	APY	Min. to Earn
American Express® High Yield Savings Member FDIC. APY 3.80% Rate info 3.80% annual percentage yield as of December 28, 2024. Terms apply. Min. to earn $0 Open Account for American Express® High Yield Savings On American Express's Secure Website. Member FDIC.	3.80% Rate info 3.80% annual percentage yield as of December 28, 2024. Terms apply.	$0	Open Account for American Express® High Yield Savings On American Express's Secure Website.
Capital One 360 Performance Savings Member FDIC. APY 3.80% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening. Min. to earn $0 Open Account for Capital One 360 Performance Savings On Capital One's Secure Website. Member FDIC.	3.80% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening.	$0	Open Account for Capital One 360 Performance Savings On Capital One's Secure Website.
Western Alliance Bank High-Yield Savings Premier Member FDIC. APY 4.46% Rate info The annual percentage yield (APY) is accurate as of November 7, 2024 and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY. Min. to earn $500 to open, $0.01 for max APY Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website. Member FDIC.	4.46% Rate info The annual percentage yield (APY) is accurate as of November 7, 2024 and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY.	$500 to open, $0.01 for max APY	Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website.

Bigger banks tend to charge more fees and complicate them. Capital One, Bank of America, and Citibank are among the banks producing the most fee complaints in the last three years, according to Consumer Affairs. Online banks tend to charge less and simpler fees.

Proof lies in online banking apps like Chime, which charges few fees and lays them out plainly on its website. Do you like fees? Me, neither.

Discover the bank accounts with the fewest fees. Click here to compare our top 10 checking accounts and avoid costly overdraft fees.

2. Terrible rates -- they're nibbling your returns

Banks that offer interest rates nine times lower than high-yield savings accounts are red flags. There's no need for that. You can open a bank account with an online bank right now and get a rate nine times better than the national average. The catch being, no physical branches.

Or is it? Capital One offers a stellar mix of great rates and physical locations. If you live near a Capital One Cafe, you can get the best of both worlds. You won't get as many locations as what Chase offers, but does that matter? If you're traveling, it might. Otherwise, it's probably fine.

I switched from U.S. Bank to Chime and more than tripled my savings account APY. And get this: Chime isn't even one of our best high-yield savings accounts -- click here to compare savings accounts with rates up to nine times higher than the national average.

Should you switch banks?

Switch banks when your accounts become more of a hassle than they're worth. Fees are expensive, shady advertising is a ticking time bomb, and terrible rates are simply unnecessary. It's 2024 and you have options. Shop around to find a better bank.

I've done it twice, and it was worth it. The main downside is it takes time to unlink your debit card from subscriptions and bill payments. But I no longer pay $100 annually in overdraft fees, and my savings earn much more. If you time it right, you may even qualify to get a bank account bonus.