3 Reasons to Switch Banks in September

Switching banks can be a bit of a hassle. You'll need to change your direct deposit settings, set up bill payments, and perhaps close your old savings or checking account.

That said, changing to a new bank can come with a lot of great perks. Here are three reasons to consider it in September.

1. Taking advantage of technology

The future is now -- we can't buy jet packs on Amazon (yet), but we can do our banking purely from cyberspace. If you've been dragging your feet on online banks, this month might be the perfect time to explore your options.

Online-only banks are based on the internet, and don't have physical branches you can visit. If you heavily rely on face-to-face interactions with your bank, it might not be right for you. I only have to visit a bank branch on rare occasions, so I don't miss this service from my online bank.

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 29, 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 29, 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.

Online banks have the same FDIC protection as branch-based banks, and they often offer robust ATM networks and excellent customer service via phone and chat. You're less likely to pay junk fees when you bank online, too -- without a branch network, these banks have fewer overhead costs to pass on to you.

You can also use their mobile apps for many of your usual transactions, like depositing checks, paying bills, and transferring money around between accounts and banks. There's another huge reason to consider online banks, though -- more on that below.

2. Earning a higher APY on savings

In addition to saving money on fees and time spent visiting a branch, you can expect a much higher annual percentage yield (APY -- how much money you can earn in a year on your account) at an online bank. I've earned over $2,000 in interest this year from my online high-yield savings account -- just for keeping my emergency fund, tax payments, and other savings in the bank.

The Federal Reserve is likely to press "go" on a federal funds rate cut in September, so now is a good time to take advantage of higher rates while we have them. Even after the federal funds rate is cut, APYs on online savings accounts are unlikely to slam back to Earth -- we're expecting gradual cuts starting in September and continuing into next year. The federal funds rate doesn't directly influence savings account rates, but the two are correlated.

As of this writing, you can open an online high-yield savings account with a rate as high as 5.31% -- quite nice compared to the standard big bank savings account rate of 0.01% and the national average rate of 0.42. Even if your rate starts falling this month, it's still going to beat that big bank rate thanks again to those lower overhead costs for online banks.

3. Getting a sweet bank bonus

Finally, you might consider switching banks this month to earn a little extra cash. You can earn the best bank bonuses by opening a new bank account and completing qualifying activities. These can include depositing a certain amount of money, setting up direct deposits, or making transactions within the account (like paying bills).

One word of caution regarding bank bonuses, however: Read through the features and terms of your potential new account to make sure you actually like it before switching. Don't change banks just for a bonus -- ideally, you're hanging onto that new account for a while, and the bonus is a one-time deal.

It also might not be worth opening a savings account with a low APY (such as those offered by the big banks) for a bonus. Earning interest on your cash over time is likely a much better reason to open a new savings account.

Is it time for a new bank? Consider these reasons and pick out a winner so you can move your cash in September.