The offers on this page are from advertisers who pay us. That may influence which products we write about, but it does not affect what we write about them. Here's an explanation of how we make money and our Advertiser Disclosure.

7 signs it’s time to ditch your bank

Sarah C. Brady · Contributor

Updated Tue, Jun 11, 2024 4 min read

It may seem like all banks are the same, but that is far from the truth.

If you feel constant frustration with your bank, whether due to high fees, low interest rates on your deposits, or bad customer service, there are a hundred other banks and credit unions that could be a better fit.

Yes, switching to a new bank can be a bit of a chore, but the change could lead to major savings and other unexpected rewards. One survey by Frost Bank found that only 11% of people think their bank is a good fit, yet customers who have a sense of belonging with their bank are 160% more likely to have better financial health.

Here are seven signs it's time to ditch your current bank for a better one.

1. High fees

Banks should reward you for lending them money (via your deposits) instead of penalizing you for everyday transactions. If you're paying bank fees on a regular basis, or getting hit with surprise charges, you can save money by switching. Here are some of the fees you can potentially drop at another bank:

Monthly maintenance fees
Minimum account balance fees
Out-of-network ATM fees
Overdraft or non-sufficient fund fees

For free accounts, consider an online bank. Since they have low overhead, online-only banks tend to offer low or no account fees. That's one of many reasons customers tend to rate them better than major national banks like Wells Fargo or Bank of America.

2. Low APY

Annual percentage yield (APY) is the interest earned on deposit accounts (including checking, savings, money market accounts, and CDs) when compound interest is factored in.

There's a huge difference in what you can earn from one bank to the next, so it's worthwhile to shop around for better rates occasionally. For example, say you have $10,000 sitting in a savings account at a national bank that offers just 0.1% APY. If you switch to a savings account from an online bank that offers 5% APY, you could earn an extra $500 in interest over one year.

3. High APR

Annual percentage rate (APR) is the cost you pay to borrow money, including interest charges and fees. Banks charge an average of over 8% to borrow cash for a car loan, over 12% to take out a personal loan, and 22% on credit card debt.

Switching institutions can drastically reduce your APR, especially if you move from a large bank to a smaller one. For example, large banks charge credit card interest rates up to 10 points higher than small banks and credit unions do, and their annual card fees are $63 higher, according to the Consumer Financial Protection Bureau (CFPB).

4. Limited access to support

Many people prefer to handle their banking online rather than in person, so customer support might not seem essential in a bank. But if something goes wrong with your account — for instance, you spot an unauthorized withdrawal from your checking account — you may need immediate access to a live agent.

Before choosing your next bank, check to see how easy it is to contact live support 24/7, and via the channel you prefer, whether that's online chat, phone, in-person, or a combination of the three.

5. No account bonus

Many banks offer incentives to open new bank accounts. For example, at Citibank and Wells Fargo, you can earn a $2,500 bonus for opening a checking account. But there's a catch: You have to be a new customer.

If you're in the market for a new bank account, but your bank only offers bonus incentives to new customers, look around to see what you can earn elsewhere.

6. Security concerns

Banks are some of the biggest targets for data breaches. So far in 2024, Bank of America, Santander, and J.P.Morgan Chase have already been hit. If your bank doesn't offer the following security features and services, they might be jeopardizing your security:

Providing education about new scams
Allowing you to use multi-factor authentication and set up alerts for all accounts
Using encryption software
Making regular updates to their mobile app
Alerting you to data breaches and telling you if your information was compromised and how to respond

7. Deposit delays

Delayed access to deposits is one of the main reasons people lose trust in banks, according to a J.D. Power survey. If you have to wait a full business day (or even longer) to access your paycheck after it's deposited, you might need to bank elsewhere.

Banks that use the automated clearing house (ACH) don't process transactions after business hours, on weekends, or on holidays. So for immediate access to your money, look for institutions that use FedNow or the Real Time Payments Network (RTP) — or that offer early direct deposit.

How to switch to a new bank

Switching banks takes a bit of work, especially if you want to prevent accidental overdrafts and other problems with the old account. Once you've found a new bank that meets your needs, follow the correct steps to switch bank accounts, which include transferring your automatic payments and deposits to the new account, and then getting written confirmation that the old account is closed.