Is it Time to Switch Banks?

Small institutions often offer the best savings yields, but credit cards from big banks come with valuable perks.

bank storefront
(Image credit: Getty Images)

Large banks provide vast ATM networks, advanced technology and a wide array of products. But when it comes to interest rates on savings accounts, they’re often overshadowed by small banks and credit unions. While a number of local institutions and internet banks recently offered rates of 5% or more on savings accounts and money market deposit accounts, interest rates on some large banks’ accounts have barely budged since the Federal Reserve Board started hiking short-term rates in March 2022.

A 2023 research paper published by the UCLA Anderson School of Management concluded that customers of large banks are willing to accept low rates on their savings in exchange for other benefits large banks provide. Small banks are compelled to offer higher rates on deposits in order to stay competitive, the economists found. 

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Sandra Block
Senior Editor, Kiplinger's Personal Finance

Block joined Kiplinger in June 2012 from USA Today, where she was a reporter and personal finance columnist for more than 15 years. Prior to that, she worked for the Akron Beacon-Journal and Dow Jones Newswires. In 1993, she was a Knight-Bagehot fellow in economics and business journalism at the Columbia University Graduate School of Journalism. She has a BA in communications from Bethany College in Bethany, W.Va.