When To Jump Ship on Your Savings Account

With the average savings account interest rate hovering around a measly 0.23%, as measured by the BankingMyWay Savings Account Rate Tracker, frustrated bank consumers may already be halfway out the door.

And the consumer who does so may have plenty of company. According to a 2009 study of consumer bank satisfaction by J.D Power and Associates, only 35% of customers say they are highly committed to their retail bank this year, compared with 37% in 2008 and 41% in 2007. "On average, highly committed customers use more products, give more referrals and are much less likely to switch to
another bank, compared with customers who have lower commitment levels," the study reports.

The study also noted that consumers reporting the lowest levels of satisfaction with their banks in 2009 have deposit balances that are 15% higher than average.

But not all banks are the same, and some savings accounts are worth keeping – and some are worth abandoning. How can you tell the difference? If, for example, your bank is sloughing off on interest rate performance, but raising fees anyway, it might be time to close your savings account and move on down the road.

But that’s not the only reason – let’s examine some red flags that could leave you waving “bye-bye” to your bank. 

Interest rates that just aren’t competitive. A cursory search of the BankingMyWay Savings Rate Search Tool shows how banks – even in the same state – can vary widely when it comes to savings rates. Take the state of New York. There, you can find a CheckSpring Bank in the Bronx that offers a savings account with a 2.02% APY, with a minimum $1,000 deposit. But you can also find an APY First Source Federal Credit Union, which offers only a 0.25% APY, albeit with only a nominal ($5) minimum deposit. The moral of the story? Always be on the lookout for significantly better rates – and always use the BankingMyWay Savings Rate Tracker.

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