6 signs you're using the wrong savings account

Liz Knueven

Mar 1, 2020, 18:56 IST

6 signs you're using the wrong savings account

signs you're using the wrong savings account

If your savings account's app doesn't work well, it's time to switch.

If your savings account isn't earning enough interest, has poor support, or has outdated online interfaces, it might be time to switch savings accounts.
Additionally, if you're finding it hard to save or are tempted to spend your savings, a new savings account could solve the problem.
Don't let the wrong savings account keep you from reaching your goals - there are plenty of fee-free and high-interest options out there, and you can try as many as you'd like.
See Business Insider's picks for the best high-yield savings accounts »

It's hard to save when you have the wrong savings account.

Whether you're growing a travel fund, maintaining an emergency fund, or saving for a down payment on a car or house, having the right account is essential.

You're not tied to your savings account: You can have multiple open if you want, and there's no long-term commitment. If one savings account doesn't work, there are plenty of others to try, including those that are fee-free and offer interest. Don't let the wrong account keep you from saving.

Here are six signs you might be using the wrong savings account:

1. Your account is earning less than 1% APY

If your savings account isn't earning much interest, it's not helping your money grow.

The interest rate on a typical savings account is .09% according to the FDIC. But, you could be earning more - up to 20 times that - with a high-yield savings account.

While they're hardly any different from a traditional savings account, high-yield savings accounts offer more interest. Generally, these types of accounts offer 1.5% to 2% in interest. If you still have a traditional savings account, it's time to look for a high-yield savings account to make sure you're not leaving free money on the table.

2. You find it hard to get help from your bank

The last thing you want from a bank is poor customer service. If you're having trouble getting in touch with your bank when you have questions or problems, it might be time to switch bank accounts. Reading reviews can be a great way to find out if the bank you're considering offers good customer service.

3. You find it hard to make changes, like setting up auto-deposits

Being able to easily make changes to your account is critical to growing your savings. It should be easy to make deposits, change automatic deposits, and make withdrawals when needed. If not, there are plenty of other options out there that do make this easy.

Ally Bank, for example, has been touted for its easy-to-use interface, and took a top spot overall in Business Insider's best savings account roundup for that reason.

4. The bank's app or online experience is hard to use

If you access your account online, the experience on your computer or phone is critical. If you're constantly having problems with it, a new savings account might be in order. Many online-only banks offer great interfaces and apps, so it might be worth looking at one of those services.

5. You're tempted to spend your savings

Many people open a savings account at the same bank as their primary checking account. While that works for some, it's not always the best idea. If you're tempted to spend your savings by having such easy access, separating the two could be wise. Make a new savings account at a bank separate from your checking account to keep saved money out of sight and out of mind.

6. You feel like saving is a chore

Are you starting to feel like making a deposit every month is just another thing on your to-do list? It shouldn't be. It could be a sign that you have the wrong savings account. Saving money for your future goals should be motivating, at least, and even fun, at most. If you find that logging into your account is intimidating, annoying, or tedious, you might want to look into other options to choose a bank that works for you.

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