When it comes to maximizing your savings, high-yield savings accounts (HYSAs) have become a go-to option. But what happens if you find a better interest rate at another bank? Many savers wonder: Should I close my old HYSA before opening a new one—or keep both?
Let’s break it down so you can make the smartest financial move.
Why People Switch HYSAs
Banks adjust their annual percentage yield (APY) frequently. Today you might see one bank offering 5.00% APY, while another sits at 4.35% APY. Over time, that difference can significantly impact your savings growth.
Other reasons people switch include:
- Lower fees at a competitor bank.
- Better online tools and apps for managing money.
- Promotional bonuses for new account holders.
Pros of Keeping Your Old HYSA Open
Before you rush to close your current HYSA, consider these benefits of keeping it:
- Diversification of banks – Having money in multiple banks reduces risk if one experiences technical issues.
- Flexibility – You can transfer money strategically depending on interest rate changes.
- Relationship history – A long account history can sometimes help with creditworthiness or loan approvals.
- No penalties – Most HYSAs don’t have maintenance fees, so keeping one open may not cost you anything.
Reasons to Close Your Old HYSA
There are also times when closing your old HYSA makes sense:
- Minimum balance requirements – If the account charges fees for low balances, it could eat away at your earnings.
- Too many accounts – Managing multiple accounts may get confusing.
- Better organization – Closing an unused HYSA simplifies your finances.
- Dormancy risks – Some banks charge inactivity fees if your account goes unused.
What’s the Smartest Strategy?
- Open the new HYSA first. Never close your old account until the new one is approved and ready.
- Transfer funds strategically. Move money into the new account to start earning higher interest immediately.
- Decide later if closure makes sense. If your old account has no fees and doesn’t complicate your finances, keeping it open could be beneficial.
Key Takeaway
You don’t have to close your old HYSA when opening a new one. In fact, many savers keep multiple HYSAs to take advantage of different rates and perks. The best move depends on whether your old account costs you money or adds unnecessary complexity.
If it’s free and simple to keep, there’s no harm in holding on to it. If it’s draining your funds with fees, then closing it is the smarter choice.
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