This column originally ran June 1, 2022, and has been updated.
Here’s why it may be time to break up with your bank
With interest rates rising, it could be time to leave your bank for another financial institution paying more on deposit accounts
Since the Great Recession, stockpiling money at a bank or credit union has almost felt like depositing your money in your mattress, given the minuscule interest rates financial institutions pay on checking and savings accounts.
Then high inflation hit. This led the Fed to increase interest rates in an effort to dampen consumer demand and decrease inflation.
“Now, at least things are moving in the right direction,” said Greg McBride, chief financial analyst at Bankrate.com. “Interest rates are going up and the goal is to bring inflation down.”
If you’re following the advice to keep a healthy emergency fund, you might wonder whether you should break up with your bank for a higher rate on your savings or checking account. I asked McBride about the questions savers should consider if they are planning to move their money.