4 reasons to ditch your regular savings account now

The choice of where to store your hard-earned money is just as important as how much you save. While traditional savings accounts have long been a popular choice for parking cash, if you're using one for your money, it's time to consider whether they still serve your best interests. 

After all, while inflation appeared to be cooling in June, the most recent report showed that inflation ticked back up in July. The higher costs that come with inflation mean the money in your budget isn't stretching as far as it was last year. If you need to dip into it for an emergency or unexpected expense, neither will the balance in your savings.

And, there are a few more reasons to ditch your regular savings account now, too. 

Explore the rates you could be earning on your savings here now.

4 reasons to ditch your regular savings account now

If you're still keeping your savings in a regular savings account, it's time to make the switch. Here's why.

Regular savings accounts aren't keeping up with inflation

The fundamental goal of saving is to preserve and grow your money over time. Unfortunately, if you're using a regular savings account to do that, it's probably failing to meet this basic objective. 

With an average interest rate of a mere 0.42%, these accounts are struggling to keep up with the rate of inflation. As the cost of goods and services steadily rises, the purchasing power of your savings erodes. 

And, high inflation coupled with meager interest rates means your money is effectively losing value. It's time to upgrade to an account that not only preserves but also enhances your wealth instead.

Find out how the right account could benefit your savings here now.

There are accounts with better earnings potential

Another reason to ditch your regular savings account is that there are accounts that offer savers more lucrative interest. High-yield savings accounts are a viable alternative, with many accounts boasting interest rates of 4.5% or even higher right now due to the Federal Reserve's numerous interest rate hikes over the past year. 

These accounts, which are offered by both brick-and-mortar and online banks, offer substantially better returns on your money while still providing the convenience and security of a traditional savings account. 

Certificates of deposit (CDs) are also an attractive alternative, with rates potentially exceeding 5%. These fixed-term accounts offer predictable returns in return for locking your money away for a specific term, making them a good potential addition to your savings strategy.

Your regular savings account may be costing you

Traditional savings accounts aren't always as straightforward as they appear. Many banks impose maintenance fees or transaction charges that can eat into your already modest interest earnings — and it simply isn't worth paying these costs for an account with such a low earning potential. 

In contrast, high-yield savings accounts and CDs are known for their fee transparency. And, there are many options for fee-free or low-fee CDs and high-yield savings accounts, too. By transitioning to these accounts, you can free yourself from the burden of unnecessary fees and maximize your earnings.

Other accounts still offer easy accessibility

One common misconception is that transitioning away from a regular savings account means locking away your funds. However, this couldn't be further from the truth. 

High-yield savings accounts, CDs and money market accounts offer varying degrees of accessibility. High-yield savings accounts, for example, often allow unlimited withdrawals while maintaining competitive interest rates. Money market accounts combine high yields with check-writing privileges, providing both accessibility and growth potential. 

CDs, while less flexible due to their fixed terms, can still offer scheduled payouts and early withdrawal options in some cases. So, if you'd prefer to move your money to this type of account, your best bet is to just shop around and find one that fits your needs.

The bottom line

The days of settling for lackluster returns from your regular savings account are over. It's time to take control of your financial future by embracing alternatives that not only protect your money from inflation but also provide substantial growth opportunities. High-yield savings accounts, CDs and money market accounts are all currently better options than a regular savings account, and if you make the switch today, you'll set yourself up for a more prosperous future.