Your savings switching plan

The rest of the plan is cadence, alerts and a calendar, so the rule runs on a schedule and not on whatever rate ad you saw last. Each earlier chapter feeds one blank in the template near the end of this page.

Which of these are you?

• You have never switched and your rate is a mystery. Do Step 1 and Step 2 today. You will know your own rate and your threshold in about ten minutes.
• You switch whenever you see a bigger number. Start at Step 1 and set a threshold, then read the failure mode on chasing a promotional rate. A rule in dollars removes most of those moves.
• You have a bonus offer in front of you. Your plan still applies. Count the bonus only if you will meet its terms, then run the rule.
• You already track your rate. Skip to Step 3 to check that your alert fires before your rule does, then fill in the template.

Step 1: write the trigger rule

The trigger rule says: switch when the net gain over your horizon is at least your threshold, where net gain is cumulative extra interest minus switching cost. Pick a horizon of 12 months, a threshold in dollars, and a switching cost from your own time and fees. Then the rule is arithmetic, not mood.

Definitions, the same as in the first chapter:

• Switching cost = hours x value of an hour + one-time fees - any bonus you will actually receive.
• Month interest = Balance x ((1 + APY)^(1/12) - 1), balance held constant, no compounding on interest, taxes ignored.
• Net gain over 12 months = sum of the 12 monthly extra-interest amounts - switching cost.
• Rule: move when net gain over 12 months is at least your threshold.

The threshold is the part that is yours. A threshold of zero means "any positive result", which invites moving for a gain too small to survive a mistake. A threshold of $100 or $250 leaves room for a slow bank form, a missed bill or a rate that falls early. Write it down as a number and say why.

A fast screen: the gap that clears your threshold

Before opening a calculator, convert the threshold into a rate gap. With a constant gap over 12 months, the required gap in points is (cost + threshold) / balance x 100. The table uses a $50 cost, which is 2 hours at $25 an hour.

Read across a row to see how the same threshold asks for very different gaps. Larger balances clear it with a small gap, and small balances need a large one. That is why one blanket "switch above X points" rule fails: the gap that matters depends on your balance and your time.

The table is a screen, not the answer. It treats the year as balance x gap, while the model of record compounds monthly without reinvesting interest, which comes out slightly lower. A gap of exactly 0.60 points on $25,000 should net $100, and the full model gives $95.60, so a result near the line needs the real calculation.

Worked example: three cases against a $100 threshold

All figures hypothetical. Balance $25,000, current APY 3.00%, switching cost $50 (2 hours at $25 an hour), horizon 12 months, threshold $100.

The middle row is the useful one. It pays back in five months and still fails the rule by $4.40. That is the rule working as designed. If you would rather move at that result, your threshold was set too high, and you can change it in writing on a calm day, not on the day of a promotion.

Now stress-test the winner. A top rate may not last, so rerun the 4.00% case with the new rate holding for 3 months and then falling 0.05 points a month until it reaches your current 3.00%.

Net gain falls from $192.24 to $146.96, which still clears $100. A rule that survives its own stress test is one you can follow without second-guessing. If the stressed result had dropped below the threshold, the answer would be to stay, or to treat the move as a short-term gain and plan to review again soon.

Our data supports running this stress test on the new account, and not on yours. In the Rate Half-Life study, the median stay in the top 10 of 126 tracked savings accounts was 15 days, and 32% of stays lasted 30 days. That is a rank statistic, one 167-day window, preliminary, and about the leaderboard, not about your own account. The same study found a median of zero rate changes per 90 days among the 91 institutions with at least 60 days of data.

Step 2: choose a review cadence

A monthly 10-minute check of your own rate and a quarterly 30-minute comparison against the market is a sound default, given what we measured. In our tracked set, 47 of 91 institutions with 60 or more days of data, or 52%, never changed a rate by 0.05 points or more in the window. Daily checks mostly find nothing.

That figure has limits that matter for how you use it. It covers the institutions SwitchWize tracks, over one 167-day window, with scraped rates and a change defined as a move of at least 0.05 points that was still in place at the next observation. Of the 73 confirmed changes, 44% were cuts. Treat it as a first look at one rate cycle, not a law. A cycle where rates fall faster would justify checking more often, and your own account agreement or statement is the final word on your rate.

Your cadence has a cost, and you should price it. Ten minutes a month plus 30 minutes a quarter is 12 x 10 / 60 + 4 x 30 / 60 = 4 hours a year. At $25 an hour that is $100 a year. The routine pays for itself when what it protects exceeds that, which on $25,000 is a gap of 100 / 25,000 = 0.40 points kept or found. On a $2,000 balance it would take a gap of 100 / 2,000 = 5.00 points, so the routine is not worth running monthly there. Check twice a year and rely on an alert.

Why your bank may not tell you

A cut to your rate may arrive without notice. Under 12 CFR 1030.5(a)(2)(i), changes in the interest rate, and the corresponding changes in the annual percentage yield, on variable-rate accounts are exempt from the regulation's advance-notice requirement. Other changes that may reduce your APY or adversely affect you do need advance notice under 1030.5(a)(1). So the monthly own-rate check is how you notice the one change the rule does not require your bank to announce in advance. Your account agreement says what your own bank promises.

Step 3: set up alerts

Set one alert on your own rate and one on the market, and put promotional end dates on a calendar, since no alert knows them. The alerts do different jobs: one tells you your rate fell, the other shows you the field. Neither tells you to move. Only the rule does.

Here is what exists on SwitchWize today, checked in the repo:

• Tracking Center (/dashboard/tracking, sign-in required). You can mark a saved savings, money market, checking or CD product as tracked. A daily job compares the rate we observe for that institution and category with the rate recorded when you started tracking, and emails you if it fell by 0.25 points or more. That default is set on the server. After an alert it only alerts again on a further drop of at least 0.10 points. The old /dashboard/saved address redirects to the Tracking Center.
• Rate alerts (/rate-alerts). A daily email with the current best rate for each category you pick. For savings and CDs it also flags the most notable move of the last 30 days when there is one. It has no threshold you set.

Two limits are worth writing next to the alert. First, the tracked rate is the rate we observe for that institution and category. It may not be your rate if you have a balance tier or a promotional rate. Compare it with your statement. Second, the drop alert watches the product you hold, not the better product somewhere else. Finding the gap is the quarterly comparison's job.

Make the alert consistent with your rule. A $100 threshold on $25,000 with a $50 cost needs a gap of about 0.60 points. The default alert is 0.25 points, which is worth $60.76 a year on that balance at the example rates, so it fires before the rule could say move. That is fine. The alert is a prompt to open the calculator, not a decision.

The calculator is the rule. Enter your balance, your own APY, a candidate APY, your time and any fees. If you want the registry version with a longer horizon, the bank switch ROI calculator compares entered rates over one, five and ten years. For the best savings APY we track today, see 4.27%%, and the national average is 0.38%%. Use both only as context, since your rule runs on the account you can actually open and the terms you will actually meet.

Step 4: put the dates on a calendar

A plan that lives in your head fails on the first busy month. Give each task a date, and make the dates recur. The calendar below is a default, so move the quarters to fit your life.

Two of those rows rest on rules worth citing. On taxes, the IRS says most interest credited to an account you can withdraw from without penalty is taxable in the year it becomes available, and that interest of $10 or more should produce a Form 1099-INT. It also says you report taxable interest whether or not you get the form. Both sides of your comparison are taxed the same way, so the rule above is a pre-tax comparison on both sides. On insurance, the FDIC standard maximum is $250,000 per depositor, per insured bank, for each account ownership category. A move that puts a lot of money in one place deserves that check first.

When the rule does say move, execution follows the sequence in the payments chapter, and the planner below turns your dates into a schedule. By its stated rules, the new account opens with a test transfer, direct deposit moves first, bills move only after the first paycheck lands, and the old account stays open at least 45 days.

The one-page template

Copy this into a document and fill every blank. Use dollars, points and dates. The first column comes from the step named in the second.

1. Your numbers

2. The rule, in a sentence

"I move my savings when the net gain over 12 months, with the new rate stress-tested at ______ points of decline per month after ______ months, is at least $______."

3. Review cadence

4. Alerts

5. Account and insurance

6. Change log

Finish by running three checks. Is the threshold a number, and is your reason for it written down? Is the next own-rate check on a calendar with a date? Does every bank and category total stay at or under $250,000, or is the excess a recorded decision?

Where the rest of the series fits

The chapters before this one each answer one blank above. Whether switching pays at all is in the break-even chapter. The yearly cost of waiting sits in the staying-put chapter, how long a top rate lasts is in the rate half-life chapter, and what a Fed move changes is in the Fed chapter. The fine print behind a headline rate, the payment sequence and the failure points are in the last three chapters before this one. Use them as the reference behind your plan, and use this page as the plan.