3 reasons to change banks in September

Switching banks can be complicated. You’ll have to change your direct deposit settings, set up bill payments, and possibly close your old savings or checking account.

That said, switching banks can come with a number of benefits. Here are three reasons to consider it this September.

1. Leverage technology

The future is here: We can’t buy jetpacks on Amazon just yet, but we can do our banking entirely from cyberspace. If you’ve been on the fence about using online banking, this month might be a great time to explore your options.

Online banks are internet-based and do not have physical branches that you can visit. If you rely heavily on face-to-face interactions with your bank, this service may not be right for you. I only have to visit a bank branch on rare occasions, so I don’t miss this service from my online bank.

Online banks enjoy the same FDIC protection as branch banks and often offer robust ATM networks and excellent customer service via phone and chat. You’re also less likely to pay unnecessary fees when you bank online: Without a branch network, these banks have fewer overhead costs to pass on to you.

You can also use their mobile apps for most of your usual transactions, like depositing checks, paying bills, and transferring money between accounts and banks. There is, however, another important reason to consider online banks, more on that below.

2. Earn a higher annual return on savings

In addition to saving on fees and time spent visiting a branch, you can expect a much higher annual percentage yield (APY — the amount you can earn in a year on your account) at an online bank. I earned over $2,000 in interest this year on my online high-yield savings account — just by keeping my emergency fund, tax payments, and other savings in the bank.

The Federal Reserve is likely to accelerate its cut to the federal funds rate in September, making this a great time to take advantage of higher rates while they last. Even after the federal funds rate is cut, annual returns on online savings accounts are unlikely to come back down to earth. We expect gradual declines starting in September and continuing into next year. The federal funds rate does not directly influence savings account rates, but the two are correlated.

As of this writing, you can open a high-yield online savings account with a rate as high as 5.31%, which is pretty good compared to the standard savings account rate at major banks of 0.01% and the national average rate of 0.46%. Even though your rate starts to drop this month, it will still be higher than the big banks thanks to these lower overheads for online banks.

3. Get a nice bank bonus

Finally, you might consider switching banks this month to earn some extra cash. You can earn the best bank bonuses by opening a new bank account and completing qualifying activities. This could include depositing a certain amount of money, setting up direct deposits, or completing transactions within the account (like paying bills).

A word of caution about bank bonuses though: read the features and terms of your potential new account carefully to make sure it’s really a good fit for you before you switch. Don’t switch banks just for a bonus: ideally, you’ll keep the new account for a while and the bonus is a one-time offer.

It may also not be worth opening a savings account with a low annual interest rate (like those offered by major banks) just to get a bonus. Earning interest on your money over time is probably a much better reason to open a new savings account.

Is it time to change banks? Consider these reasons and choose the right one so you can transfer your money in September.