Bank Shopping Can Help Retirees Get Out of Debt

Editor’s note: This article is part of our “Debt Free” series, a Next Avenue initiative made possible by a grant from the RRF Foundation for Aging.

If you're steamed that your savings account is earning a measly 0.1% a year or that you're getting nickeled and dimed by bank fees, stop carping and start searching — for a bank that will do better by you.

"Our finances evolve over time; our lifestyles evolve over time and our financial goals evolve over time. As we evolve, we may need a bank that meets our current needs better," said Elizabeth Ayoola, lead personal finance writer at the NerdWallet site.

That's especially true if you will be relocating for retirement to an area your current bank doesn't serve. Or if you will travel often and need your bank's ATMs wherever you are.

There's more reason to make the effort to shop for banks these days because the range of interest rates, fees and services among financial institutions is now vast. Also, many banks offer accounts just for people in their 50s, 60s or older.

But don't worry about trying to find one bank with everything you desire.

"If you're earning a lousy rate on your savings and see all these online savings accounts earning north of 4%, you don't have to sever all ties with your current bank," said Greg McBride, chief financial analyst at Bankrate.com. "It can just be a matter of moving that one savings account and then linking it to the checking account you have."

Said Ayoola: "Your approach to banking doesn't necessarily have to be monolithic. You can mix and match online and traditional banks to meet your different financial needs and goals."

Unfortunately, banks often don't make it easy to close accounts or transfer money to competitors. Red tape and foot dragging are not uncommon, especially if you want to move your checking account to a different bank.

"The checking account is the centerpiece of the banking relationship," said McBride. "So, the bank you're with may want to make it difficult to close that account and move it someplace else."

An inside tip: If you're not happy with your bank, you may be able to negotiate for a higher rate on its savings, money-market or checking accounts or CDs. You may be able to negotiate for lower fees, too.

"Where this has the best possibility of working is if you have a longstanding and multifaceted relationship with your bank," said McBride. "But if all you have is a checking account and never have more than 500 bucks in there, they'll open the door for you on your way out."

It's possible that your bank is paying a higher rate to some customers but you don't know it.

The Consumer Financial Protection Bureau (CFPB) recently sued Capital One saying the bank created its high-yield 360 Performance Savings account while it still had the lower-rate 360 Savings account. The New York Times reported that in 2023, the 360 Savings rate was one-tenth that of the nearly-identically named 360 Performance Savings' rate.

The CFPB said Capital One didn't pay out $2 billion in interest because it didn't convert 360 Savings accounts into 360 Performance Savings accounts. Capital One plans to dispute the CFPB allegations in court.

Here's how to shop for the right bank based on your priorities (loans are excluded here since they're one-time decisions and credit cards aren't covered because they're offered by retailers, airlines and banks):

Chances are, you can earn a higher rate on your savings and checking accounts and CDs than where you bank now, quite possibly dramatically higher. For example, many big banks pay about .01% a year on savings accounts but it's possible to earn as much as 4.75% elsewhere.

That difference can be substantial if you have a sizable amount of savings. Put $50,000 in a .01% savings account and you'll get only $5 in interest over a year but a 4% account will bring you $2,000.

"Using an online compound interest calculator can let you see the difference in how much you can earn in a year," said Ayoola. "Sometimes, that's enough motivation to make a simple move by opening another account."

Online banks tend to offer the highest rates on savings accounts and CDs. Credit unions (not-for-profit financial institutions whose customers share a common bond) often offer among the highest rates, too.

In years past, acceptance into a credit union could be hard. That's no longer true. "It's easier than ever to join a credit union," said McBride. "There are community credit unions available to anybody who lives or works within a particular community."

Some banks require minimum deposits to earn their highest CD rates, though. The size of those minimums varies; $1,000 or $2,500 are common.

The Bankrate and NerdWallet sites keep running tabs on the highest yielding savings accounts, checking accounts and CDs around the country. Those sites and Money.com also publish annual lists of the best banks for savers.

Bankrate says Quorum Federal Credit Union has the best savings account in the U.S. for 2025 (the HighQ). Becoming a member there, Bankrate notes, is easy and free. Ally Bank has Bankrate's best money market account, CD and checking account.

Nerdwallet dubs UFB Bank's Portfolio Savings account the best in 2025 and says Vio Bank has the top money market account (Cornerstone). The site calls Ally Bank the best bank or credit union for CDs.

Money.com's 2025 review of best banks and credit unions "for seniors" says Lake Michigan Credit Union is best for savings and Axos Bank's Golden Checking Account is tops for checking.

A word about federal insurance on savings accounts: The federal government insures up to $250,000 per account at all U.S. banks and credit unions through the Federal Deposit Insurance Corporation (FDIC). So, insurance generally will not be a concern when bank shopping.

But heed this warning: Although nonbank financial technology platforms (known as fintech) may say they have up to $250,000 in federal insurance, that's not exactly true.

They work with a number of partner banks that hire middleman companies and pool customers' money in a way that makes it hard, if not impossible, to know who should receive how much money if there's a failure.

This became clear when the Synapse fintech firm collapsed in 2024. More than 100,000 of its customers were unable to access their money and are now battling Synapse in court.

"The money is in the bank, allegedly, but nobody knows which bank," McBride said. "It's been a horrible mess. People have lost their life savings."

Describing fintech situations like Synapse, a Federal Deposit Insurance Corp. report said: "What if you open an account with a nonbank company that says it will deposit your money in an FDIC-insured bank? Will you be eligible for FDIC deposit insurance coverage? The short answer is: it depends."

If you want to pay the lowest fees to bank, shopping around can pay off.

A MoneyRates survey found the average monthly fee for checking accounts is $13.95, which adds up to $167.40 over a year. But more than 37% of checking accounts are free, the site says.

Online checking accounts are more than twice as likely to be fee-free than traditional branch-based accounts, MoneyRates found.

"We've seen a bit of a rebound in terms of the availability of free checking accounts," said McBride. "Forty seven percent of banks offer a standalone free checking account."

His advice: "You don't want to be handcuffed to an account where you have a large balance just for the purposes of avoiding a fee. That's not an efficient use of cash."

Some banks also sock customers with $30 overdraft fees (when you spend more than you have in your account); others have none. Roughly 35% of banks don't charge overdraft fees because they deny payments when accounts are too low for purchases.

The Biden administration's CFPB rule would cap overdraft fees at $5 for most banks and credit unions starting in October 2025. It's uncertain whether President Trump will let this happen though; he recently fired the CFPB director and ordered the agency to stop implementing new rules.

Money.com calls U.S. Bank the best in the nation for bank fee waivers.

Bankrate says Axos Bank Golden Checking (ages 55+) is aces for a no-fee checking account that earns interest on all balances and Connexus Credit Union Innovative checking account is its favorite for no monthly fees or minimum balances. Connexus pays no interest on that account, though.

You may prefer banking where you can walk in and speak with someone, make a deposit, apply for a loan or keep a safe deposit box. That would lead you to a brick-and-mortar bank with retail locations. You may also like the vast ATM networks these banks often have.

Just bear in mind that banks have been shutting many of their branch locations or retaining just their ATM machines. So, you may need to drive further to use a brick-and-mortar version these days.

The disadvantages of brick-and-mortar banks: typically, lower rates on savings and checking accounts and CDs and higher ones on loans than at online banks. You may also pay higher fees to help defray the cost of the bank locations.

If you vacation frequently or have a second home far from your primary residence, you have particular banking demands.

So, you will want to a bank or credit union that either offers free or low-cost ATMs wherever you'll be or reimburses fees charged by out-of-network banks and stores if you use their machines. The average ATM fee is a stiff $4.77, according to Bankrate, the highest since 1998.

Small and medium-size banks and credit unions increasingly offer customers access to large numbers of ATMs around the country, sometimes globally.

"You can have tens of thousands of ATMs available to you free of charge around the country even if your bank only has a half dozen ATMs in the local area," said McBride.

Nearly half of credit union members can use the 30,000 surcharge-free ATMs in the Co-op Shared Branch network.

You may be surprised to learn that a credit union like little Sunbelt Federal, with only nine retail branches, provides access to more than 60,000 free ATMs. By contrast, Bank of America has an ATM network of about 16,000 locations including ones at 7-Elevens, Costcos and McDonalds.

For international travelers, foreign ATMs tend to offer the best currency exchange rates. But you'll often pay a withdrawal fee for using them — typically $1 to $5 or 1% to 3% of the amount you're taking out, according to Wise.com.

NerdWallet says Charles Schwab Bank is best for using ATMs abroad and Capital One 360 is No. 1 for low foreign transaction fees.

"If you'll be traveling abroad a lot, ask your bank about its policies for using your debit card abroad and what kinds of fees it charges," said Ayoola. "Make sure you won't be overcharged."

Richard Eisenberg is the former Senior Web Editor of the Money & Security and Work & Purpose channels of Next Avenue and former Managing Editor for the site. He is the author of "How to Avoid a Mid-Life Financial Crisis" and has been a personal finance editor at Money, Yahoo, Good Housekeeping, and CBS MoneyWatch. Read More