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AMERICA'S BEST BANKS 2023

Newsweek Europe

November 18, 2022

With inflation high and interest rates rising, you need a bank that helps you make the most of every dollar more than ever

AFTER MONTHS OF RECORD-BREAKING price increases on food, gas and other basics of everyday life, it's never been more important to bank with a financial institution that helps you maximize the power of every dollar.

While no bank or credit union offers payouts that come close to keeping pace with inflation, institutions have been steadily hiking rates this year in response to the Federal Reserve's record interest-rate increases. Last October, the average savings account paid just 0.06 percent interest. Today, that's up to 0.21 percent, and top-yielding accounts offer more than 3 percent. Payouts haven't been that high since 2010.

Still, that's just a drop in the proverbial bucket compared with the staggering 8.2 percent annualized rise in consumer prices over the past 12 months. That makes top rates only one factor to consider when choosing a bank these days.

Finding an institution that offers bigger incentives, like cashback or other rewards programs and fewer-than-average fees, also ranks highly for customers on the hunt for a new bank, a J.D. Power surv recently found.

Some banks have been listening. Over the past year, major players, like Capital One, Bank of America, Citibank and U.S. Bank, have reduced or eliminated their fees for overdrafts and other transgressions or offered more ways to avoid maintenance fees. "Many people view these overdraft fees as predatory," says Ken Tumin, founder of DepositAccounts.com. "This change will help a lot of people, particularly those who can least afford to pay a $35 overdraft fee." Many institutions, though, give with one hand and take with the other, by increasing different charges to offset the lost revenue from overdraft fees, says Tumin. Free paper statements are all but a thing of the past. And ATM fees continue to rise as more people use digital payment systems like Zelle instead of cash, making it costlier for banks to maintain their ATMs.