4 signs it's time to find a better savings account

Let's face it: Switching your savings account can be a hassle. That's why many people pick an account and stick with it — even if it's not the best fit. While that strategy may seem convenient, an underperforming account can actually hinder your financial progress over time. And, what seemed like a good account a few years ago may now be lagging behind, thanks to persistent inflation and interest rates that are at 22-year highs.

The best approach is to put in the work and find a savings account that fits your finances and your short and long-term money goals. After all, your savings account isn't just a place to store money for emergencies or big purchases. It's a vital tool for growing your money, which is why you need one that fits your finances while maximizing your interest earnings. 

But how can you tell when yours is underperforming? Well, there are a few simple signs to watch for in order to determine whether it's time to find a better savings account. Here's what you should keep an eye out for.

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4 signs it's time to find a better savings account

If you find yourself experiencing any of the following, it might be time to consider finding a better savings account.

You're earning a low rate of interest

One of the primary purposes of a savings account is to earn interest on your deposited funds. If you're earning a meager interest rate on your savings, it can significantly impede your ability to grow your wealth over time. 

Right now, the average interest rate on regular savings accounts is 0.42%. While that rate may be better than nothing, the reality is that there are better options for earning interest, like a high-yield savings account. As the name suggests, high-yield savings accounts offer much higher rates of interest on your money — and there are numerous options offering APYs of 4.5% or higher right now. 

High-yield savings accounts aren't just limited to high-net-worth individuals, either. Many of these accounts come with no or low minimum deposit requirements in return for that high rate of interest. Online financial institutions typically offer higher yields than traditional banks or credit unions due to having lower overhead costs, but be sure to shop around and compare options to find an account — and an interest rate — that fits your needs.

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You're paying unnecessary fees

While some fees are inevitable, certain savings accounts come with excessive charges that eat into your hard-earned savings. This could include fees and penalties for monthly maintenance, transactions, ATM use and more. If your current savings account is laden with fees, it's time to reassess whether it aligns with your financial goals.

Seek out savings accounts that offer fee waivers or minimal fees. Many online banks and credit unions offer fee-free accounts, including high-yield savings accounts, allowing you to keep more of your money while earning higher rates of interest. Just make sure you understand the terms and conditions before opening a new account to avoid unpleasant surprises.

Your account access is limited

Having limited access to your savings can be frustrating and inconvenient. Some banks impose withdrawal restrictions or require minimum balances that limit your financial flexibility. Or, there may not be easy online or app access to your account, which can be a hassle when you want to access your money. If your current savings account doesn't provide easy access to your funds when you need them, or limits you to a handful of withdrawals or transfers each month, it's time to consider alternatives.

Look for savings accounts that offer flexible withdrawal options instead — and accounts that won't impose excessive limitations on accessing your money. Many banks provide convenient access through mobile apps and online platforms, allowing you to manage your savings anytime, anywhere. These types of banks can be a much better fit if you're regularly moving money around or withdrawing money multiple times per month.

You're missing out on lucrative bonuses

Another sign that it's time for a change is when you're missing out on lucrative cash bonuses offered by other institutions. The amount of these bonuses tends to range from about $50 to $500 or more, depending on the account. In turn, these promotions and sign-up rewards can be valuable additions to your savings, providing an opportunity to boost your financial growth and maximize your savings potential. 

It can pay to stay informed about promotional offers from different banks and evaluate if they align with your financial needs. Just remember to research your options thoroughly and choose an account that provides not just a lucrative sign-up bonus, but also offers competitive interest rates, minimal fees, convenient access and aligns with your unique financial needs. Start comparing the high-yield savings account options available to you right now.

The bottom line

By regularly evaluating your savings account and recognizing the signs that it's time for a change, you can ensure that you're making the most of your hard-earned money. In most cases, you're not making the most of your savings account if you're earning low interest, paying for excessive fees, have limited account access or are missing out on lucrative promotions. 

If you find that your savings account isn't working hard enough for you, take proactive steps to find a better account that helps you achieve your financial goals faster. That one small change could result in big payoffs over time, making the hassle of changing accounts worth the effort in the long run.