6 Reasons To Switch Banks in Times of Economic Uncertainty

When the economy feels uncertain — whether from high inflation, rising costs of living or predictions of future instability — changing banks might sound risky, but it could actually be one of the best financial moves you make.

Find Out: Here’s How to Build an Emergency Fund Without Blowing Your Budget

Read Next: 9 Low-Effort Ways To Make Passive Income (You Can Start This Week)

Staying with your current bank might mean settling for lower rates and poor service. Switching, if done wisely, can raise your yield, lower fees and improve your overall financial flexibility. Here are six reasons to consider making the move when the economy feels shaky.

1. Your Cash Can Earn a Lot More — Fast

If your savings sit in a traditional savings account, you’re likely missing out on money — as of October, the average annual percentage yield (APY) is hovering around 0.4%. While some banks offer slightly higher yield accounts, if you’re already considering a change, it makes sense to look for the highest option available.

Start by comparing your APY against leading high-yield accounts, and check out their other services to find the best overall fit.

Learn More: Here’s Why You Need to Monitor Both Your Credit Score and Your Credit Report, According to an Expert

2. Insure More Money

The Federal Deposit Insurance Corporation (FDIC) insures up to $250,000 per depositor, per account type, per bank. If you have more than that in liquid funds, you can spread deposits across multiple FDIC-insured banks and ownership categories for better coverage.

This kind of “switching” might mean adding an additional bank, but it can also bring peace of mind. You may even discover that one of those new institutions offers lower fees or better services too.

3. It’s Easier Than Ever To Move Your Data

In 2024, the Consumer Financial Protection Bureau (CFPB) finalized an “open banking” rule giving consumers greater control over their financial data. One outcome is that it’s now easier to switch banks and take your financial information with you.

While not directly tied to the economy, this new flexibility makes switching less daunting — and a smart move if you find better value elsewhere.

4. Find Better Digital Services

We live in a digital world where fewer people do their banking in person. Whether due to convenience, location or transportation, strong digital access has become essential. If your bank’s online or mobile systems are clunky, slow or outdated, you’re missing out on efficiency and security.

During periods of uncertainty, financial agility matters more than ever, as slow transfers or poor app performance can cost you time and money. If your bank can’t keep up, it’s time to move on.

Story Continues

5. Maintain Access to Credit

Research shows that banks often pull back on lending during economic uncertainty, tightening standards on loans and credit lines. Having relationships with multiple banks or moving to one with stronger lending programs can help preserve access to credit when you need it most.

If you’re planning to apply for a mortgage, business loan or credit card soon, now is the time to shop around.

6. Reduce ‘Silent’ Fees

In tight times, every dollar counts. Even if your APY seems decent, hidden costs like overdraft fees, wire charges and sluggish transfers can quietly chip away at your savings. Many online banks eliminate these costs and offer faster, more user-friendly systems.

To see if switching makes sense, add up the fees you paid in the last 12 months. If the total surprises you, look for a low-fee, high-yield setup that saves money in both the short and long term.

Economic uncertainty can make anyone hesitant to change, but switching banks strategically can strengthen your financial foundation, safeguard your savings and help your money work harder, no matter what the market does next.

More From GOBankingRates

9 Costco Items Retirees Need To Buy Ahead of Fall 5 Ways 'Loud Budgeting' Can Make You Richer, According to Vivian Tu 5 Clever Ways Retirees Are Earning Up to $1K Per Month From Home 9 Low-Effort Ways to Make Passive Income (You Can Start This Week)

This article originally appeared on GOBankingRates.com: 6 Reasons To Switch Banks in Times of Economic Uncertainty

View Comments