Unhappy With Your Bank? 4 Warning Signs You Shouldn’t Ignore

A bank is typically one of the best places to stash your cash, but not all financial institutions are created equal. If you’re not confident that your bank can keep your money safe, or if its fees and interest rates aren’t competitive, then it might be time to choose a new one.

How to Know When It’s Time to Switch

You Find Out Your Bank Isn’t FDIC-Backed

Most banks protect your money via the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per depositor, per ownership category. Some fintech companies also offer bank accounts but aren’t banks themselves, and thus don’t have FDIC protection. Instead, they partner with FDIC-insured institutions to store your cash.

However, this indirect relationship adds risk, as the failure of fintech company Synapse last year showed. As such, it might be safer to directly bank with an FDIC-insured bank.

You’re Paying a Monthly Account Fee

Nowadays, there are quite a few banks that offer free savings accounts. If you’re still paying a monthly account fee, without getting clear value from doing so, consider switching so you can save more money.

You’re Getting Hit With Hefty Additional Fees

Alongside monthly account fees, competition and regulation have prompted many banks to drop their hidden fees. However, don’t assume there’s such a thing as a no-fee bank. Many banks still charge for select items, such as expedited debit cards or wire transfers. So, if you’re getting nickeled and dimed, that’s a good sign it’s time to look for a new bank that doesn’t charge as many fees.

You See Other Banks Pay Much Higher Interest Rates

Lastly, your bank should ideally pay competitive interest rates. Granted, it might not be worth your time to constantly chase the highest rate, and you might be willing to accept a lower one in exchange for certain benefits, such as having access to a large no-fee ATM network. 

That said, it’s still worth shopping around to see how your bank stacks up and how much more you could be earning if you switched to a higher-yield account.

The Bottom Line

Don’t get complacent with your bank. If you realize that it’s not directly FDIC- or NCUA-insured, you’re paying high fees, or you’re earning little in interest, it could be time for a switch. The time you spend researching the best bank for your situation can be well worth it if it means keeping your money secure and ensuring it grows as fast as possible.