3 Reasons to Switch Banks Even if It Means You Get a Lower Interest Rate
KEY POINTS
- Brick-and-mortar banks don't have the highest APYs, but their in-person banking services might be more important to you.
- You might want to switch banks to increase access to your money or to benefit from relationship perks.
- Some online bank accounts, like the SoFi Checking and Savings, combine many of these perks with a high APY.
If there's one thing I find more tedious than DMV appointments and slow internet, it's switching banks. First, you have to update all your automatic transactions -- credit cards, medical bills, housing payments, utilities, Venmo -- then you have to redirect all direct deposits into your new bank. You might have to deal with your old bank, which could make it hard for you to leave -- "we'll offer you a better interest rate!" And if you forget to update an automatic transaction, you might get hit with a late or return payment fee.
For most people, there are only a couple of reasons you would go through this trouble, and both involve earning money -- either you're getting a bank bonus or snagging a higher APY on a bank account. And while both of those are my own primary motivations for switching banks, I understand that some people will switch banks even if it means getting a lower interest rate. If that sounds counterintuitive, hold your judgment until the end. Here are three (interest-less) reasons you might switch banks.
1. Customer service
Excellent customer service, especially for wealth management, could be a compelling reason to choose a bank with poor interest rates. Whether you need help managing your assets or are sick of being treated poorly by your current bank, having a personalizable, friendly, and helpful customer service team at your disposal could make up for whatever you're losing in interest payments.
Customer service in the form of banking professionals is also crucial when you're making tough financial decisions. For example, if you're trying to decide whether to take out a personal loan, or which loan is best for you, speaking to a professional could clarify your thoughts and help you make the right decision. Ditto for mortgages and home equity loans.
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 January 1, 2025. Terms apply.
Min. to earn
$0
Open Account for American Express® High Yield Savings
On American Express's Secure Website. |
3.80%
Rate info
3.80% annual percentage yield as of January 1, 2025. 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. |
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
4.40%
Rate info
The annual percentage yield (APY) is accurate as of Jan. 2, 2025, 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. |
4.40%
Rate info
The annual percentage yield (APY) is accurate as of Jan. 2, 2025, 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. |
You might also want in-person support at your bank rather than online assistance. This kind of banking acumen is typically available at brick-and-mortar banks, which often don't have the best interest rates on deposit accounts. Online-only accounts may have higher APYs -- like this 4.31% on a UFB Portfolio Savings Account -- but the banking experience at physical branches is simply unmatched.
2. Easier access to money
For me, the strongest reason to move my money to an account with a lower APY would be to bring it into closer reach. That means I would want a bank account with dense ATM and branch access in my area, plus ease of access in places where I travel frequently, like those overseas. I'd also want this account to make it easy to transfer money electronically, especially if I need the transaction on the same day.
Again, you're probably going to find this level of access at a brick-and-mortar bank. Accessing money internationally always poses problems, but some bank accounts make this easy with ATM fee reimbursements. For example, the Schwab Bank Investor Checking™ has unlimited international ATM fee reimbursements, which might sound more attractive to an international traveler than the same account's APY (0.20%).
3. Relationship benefits
Finally, a bank account may offer certain relationship benefits, like waived account fees or higher APYs on deposits, when you maintain numerous accounts with that bank. If these benefits outweigh the high APY on a single account elsewhere, it might be worth moving your assets to it.
One example is Bank of America's Preferred Rewards program. This rewards program dishes out extra perks to checking account holders who maintain at least $20,000. For example, those who maintain $50,000 or more (the Silver tier) will get a 10% savings account booster, 50% credit card rewards bonus, and up to 12 no-fee transactions on out-of-network ATMs, among others. Those with balances above $100,000 would get even more lucrative perks than these.
Get a bank account with high APY, no fees, relationship benefits, and great customer service
Yes, it is possible to get all of the above in one account. One great example is the SoFi Checking and Savings. This account has a stellar APY, charges no account fees, lets you withdraw cash from ATMs, imposes no limit on the number of external transfers, and comes with a sweet bank bonus. It's an account that's worth moving your money to -- and keeping it there long term. Compare it with the best high-yield savings accounts and see if it's worth switching for the extra perks.
Our Research Expert
Steven Porrello writes about personal finances topics ranging from credit card offers to Costco deals to choosing the best places to park your cash.
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