Your savings account should do more than just keep your money safe (though it needs to do that, too) — it also needs to help your money grow so you can more quickly meet financial goals like saving for a down payment on a home or building your emergency fund.
But it's not always obvious when your current savings account isn't passing muster and you need to make a switch. Below, CNBC Select and a certified financial planner list 4 signs that signal it's time to consider a new account.
Your current savings account isn't earning much interest
The average savings account interest rate is currently 0.37% according to the FDIC. But, it's possible to earn 5% APY or more with some accounts. "Interest rates are huge," says Nilay Gandhi, a certified financial planner and senior wealth advisor at Vanguard. While Gandhi cautions against focusing solely on your account's APY when deciding if it's time to ditch it, it's an important consideration. "If you're able to seek out 1% or 1.5% additional, then it makes a whole lot of sense," he says. "You're paying yourself first that way."
Some of CNBC Select's top picks for high-yield savings accounts include LendingClub's LevelUp Savings (for its high APY and no minimum balance requirements or monthly fees) and UFB Portfolio Savings (for earning a high APY and also offering a free ATM card and mobile check deposits).
LendingClub LevelUp Savings Account
Annual Percentage Yield (APY)
4.00% (with monthly deposits of $250 or more), or 3.00%
Minimum balance
None
Monthly fee
None
Maximum transactions
Excessive transactions fee
None
Overdraft fees
N/A
Offer checking account?
Yes
Offer ATM card?
Yes
Terms apply.
You're paying multiple fees on your account
If you're paying fees to maintain your savings, it might be time to look for a new account.
"Many banks or institutions will have costs, whether it's transactional costs or account costs," Gandhi says. "We're always focused on fees and how you can make those less so you can keep more in your pocket."
The average American pays $7 per month in fees, totaling $84 per year. From out-of-network ATM fees to monthly maintenance or service fees, these extra expenses can eat into your savings each month.
There's good news, however: these fees aren't necessary. Many institutions also offer fee-free savings accounts, including Marcus by Goldman Sachs, which doesn't require a monthly fee or a minimum balance.
You can't easily access your cash
Easy access to the funds in your savings account is a must, and if you're having trouble getting your money then you might consider a switch.
"What's the access to the liquidity?" Gandhi says. "Does it require you to go in person to a bank, or can it be withdrawn from an ATM?" Look carefully at the ATM network and availability, whether or not ATM fees are reimbursed, and even whether there's a debit card available.
One of CNBC Select's favorite high-yield savings accounts, Ally Bank's Online Savings Account, doesn't charge any monthly maintenance fees and offers fee-free ATM access within the Allpoint network and $10 per statement cycle for other ATM fees.
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Your money exceeds the deposit insurance limits
If you're worried about your money exceeding the $250,000 Federal Deposit Insurance Corporation (FDIC) insurance limit, it might be worth opening another bank account. Working with a separate FDIC member institution is one way to get more coverage for your money. You can check whether your bank or institution is a member with FDIC's BankFind tool.
It's also possible to find accounts that offer more coverage than the $250,000 FDIC limits. For example, Wealthfront's Cash Account offers $5 million for individual Cash accounts ($10 million for joint accounts) through partner banks. Betterment's Cash Reserve and SoFi's Checking and Savings also offer more than $250,000 worth of coverage.
Generally offered by fintechs and online banks, these accounts spread deposits across a network of FDIC-insured banks. However, you should review the banks used to hold your deposits, and double-check to make sure you don't already have deposits there to ensure every dollar is covered.
Bottom line
If your savings account isn't serving your purposes, opening a new one could be a smart move. Start thinking about getting a new account when you're not able to easily access your cash, earn enough interest, or when you're paying fees or have deposits that exceed the account's FDIC limits.
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