3 Reasons to Switch Banks in October
KEY POINTS
- Interest rates have fallen by 50 basis points and CDs can lock in rates.
- Your bank may be offering you a rate 10 times worse than competitors.
- Switch banks in October to reduce holiday season fees.
Chances are good you're missing out on easy ways to put your money to work. Opening a top-ranked certificate of deposit could snag you great rates -- before they fall for years. The best savings accounts will continue to keep rates above average, while competitors dwindle.
With rates falling and the holidays approaching, there may be no better time to switch banks. Here's why it may be a smart move to open an account at a new bank before October ends.
1. Another bank will help you lock in rates with CDs
You can lock in historically high rates by opening a certificate of deposit (CD).
The Federal Reserve dropped interest rates 50 basis points (or half a percentage point) in September, signaling what appears to be the start of a downward curve. When interest rates fall, so does your savings account rate. But you can lock in rates before they fall by opening a certificate of deposit.
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. |
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. |
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. |
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. |
This is ideal when you have the money to invest in a steady, cash-generating account. A CD gives you a predictable interest rate for months or years. In exchange, you must keep your money deposited until the CD term expires. To open a great CD, you may need to switch banks.
2. Your bank's rate is 10 times worse than competitors
The best savings accounts offer rates 10 times higher than average.
You may be surprised to learn that the best savings accounts are offering APYs in the 5.00% range. Though these may shrink as interest rates fall, many online banks continue to offer rates much better than old-school competitors.
To illustrate, the typical bank savings rate right now is 0.42% according to the FDIC. SoFi® offers a base annual percentage yield (APY) of up to 4.00%² for savings account customers who direct deposit into SoFi®. You could earn hundreds more each year simply by switching banks.
3. Avoid overdraft fees during the holiday season
Many banks eliminate fees for overdrawing from your checking account.
The number-one time I consistently break the budget is during December holidays. Gifts and celebrations eat into savings. Sometimes, I forget to keep up with my checking balance. If you're one of the unlucky ones, your bank charges you up to $39 for the crime of overspending.
Bless their shriveled hearts, but these banks are overcharging you. Surprised? You can avoid these fees completely by switching to banks that waive overdraft fees by simply declining your attempts to overdraw. Some even spot you up to a couple hundred dollars -- Chime does this.
Banks with sign-up bonuses this October
SoFi® offers up to $300 for opening up a checking account and using direct deposit.¹ It's one of the best checking account bonuses we've found. Right now, Capital One gives you $250 for opening a Capital One 360 Performance Savings account and making direct deposits.
Some banks offer cash for setting up savings accounts or referring friends. Explore the best bank promos to compare how much you could earn by switching this October.
Our Research Expert
Cole Tretheway is a full-time personal finance writer whose articles have been featured on Motley Fool Money and The Motley Fool. He has a degree in English with a Certificate in Professional and Technical Communication from California Polytechnic University, SLO.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Motley Fool Money is 100% owned and operated by The Motley Fool. Our knowledgeable team of personal finance editors and analysts are employed by The Motley Fool and held to the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.
SoFi Disclosure:
¹ New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus when they set up Direct Deposit of at least $1,000 during the Direct Deposit Bonus Period. Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 12/31/24. Full terms at sofi.com/banking. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC.
SoFi members with Direct Deposit can earn 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the 4.50% APY for savings (including Vaults). Members without Direct Deposit will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 8/27/2024. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
² SoFi members with Direct Deposit or $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either Direct Deposit or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi members with direct deposit are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of 8/27/2024. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.