3 Signs You Need a New Savings Account

Quick Answer

Here are three signs you need to find a new savings account:

  1. You’re paying monthly fees
  2. Your interest rate is below average
  3. Your account lacks desirable features
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Stashing away money in a savings account for emergencies and short-term savings goals is key to improving your financial life. It's also the ideal place for money you may need to access at short notice. But does your current savings account offer the features you need to nail your money goals?

Here are three signs you may need a new savings account, plus what to look for in your new savings account.

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1. You're Paying Monthly Fees

If you're being charged monthly maintenance fees for your savings account, it may be time to consider switching to a new one. If your bank charges monthly maintenance fees, you could be paying anywhere from about $5 to $25 a month—which eats into the money you're trying to set aside for your future.

Your bank may waive maintenance fees if you meet a certain minimum deposit. For example, a bank might set a minimum daily balance requirement of $300. But if meeting your savings account's minimum balance isn't in your budget now, it may be a sign to house your money somewhere with no minimum balance requirements and no monthly fees.

2. Your Interest Rate Is Below Average

Keeping your money someplace where it earns a solid annual percentage rate (APY) helps you cushion your savings. Over time, the interest you earn can grow and compound.

Switching to a high-yield savings account could help you earn more interest without sacrificing liquidity or the safety of FDIC insurance. While you won't earn as much as you might through investing, the highest rates currently hover around 5%, which can help your short-term savings grow more quickly.

To see the difference a higher rate could make, try using Experian's savings calculator to crunch the numbers.

3. Your Account Lacks Desirable Features

If your account lacks standard and bonus features that could make your banking experience better, it may be time to switch.

Do some research to see if your current savings account offers these popular features:

  • An easy-to-navigate online banking app
  • Easy access to your money through online transfers and ATM withdrawals
  • Good customer service
  • The ability to open multiple savings accounts to separate money for different goals
  • Mortgage, auto loan and personal loan offerings (applying for financing through a bank you have history with may help you get approved)

What to Look for in a Savings Account

When you're ready to make the switch, find a new savings account by comparing offerings at several banks and credit unions. In addition to traditional and high-yield savings accounts, consider these other options when looking for the right fit:

  • Money market accounts combine some features of checking accounts—such as the ability to write checks—with the benefits of a savings account, including earning some interest on your money.
  • Certificates of deposit (CDs) offer higher rates in exchange for leaving your money deposited for a set period of time. Pulling your funds out early may result in early withdrawal penalties.

Beyond considering types of accounts, weigh whether you want an online-only bank or one with local branches. Online banks tend to offer higher rates, but some people like the option to bank in person. Also, it can sometimes take longer to withdraw savings from online banks.

Last, make the most of your switch by picking a bank that will allow you to earn a bonus when you open your savings account.

Learn more >> How to Choose the Best Savings Account for Your Needs

The Bottom Line

If your current savings account is falling flat in helping you reach your short-term money goals, it may be time to find a new savings account with the features, APY and perks you want. Take time to research which type of account fits your needs and where you're comfortable keeping your money, then feel confident making the switch.