Featured Savings Rates
Online Savings & Money Market Account Rates
If you have your savings dollars in a big bank or a bank with low savings rates, then you are losing money. We've found FDIC insured banks that will pay you more. Take a few minutes to explore the options below and see how you can boost your savings by more than 6X the national average rate. There is competition for your money. Take advantage of it!
|Online Banks||APY||Vs. Nat'l Av.||Min Bal|
Sponsor message: Peace of mind starts here. Member FDIC.
|My Savings Direct||1.25%||10.33x||$1|
|Salem Five Direct||1.00%||8.26x||$0|
|Barclays Bank Delaware||1.00%||8.26x||$0|
|American Express Bank, FSB||0.90%||7.44x||$0|
|Sallie Mae Bank||0.90%||7.44x||$0|
|Colorado Federal Savings Bank||0.85%||7.02x||$2,500|
|Mutual of Omaha Bank||0.85%||7.02x||$5,000|
|Capital One 360||0.75%||6.20x||$0|
|Bank of Internet||0.75%||6.20x||$100|
|Clear Sky Accounts||0.70%||5.79x||$1|
|New Dominion Direct||0.70%||5.79x||$50,000|
|CNB Bank Direct||0.26%||2.15x||$1|
|BAC Florida Bank||0.25%||2.07x||$100|
|BAC Florida Bank||0.15%||1.24x||$500|
Highlighted Savings Rates
Online Savings or Money Market Accounts
By Sol Nasisi
Savings or money market accounts from online banks have become increasingly popular over the past ten years for the higher rates they generally offer. Because these online banks do not have expensive branch networks to maintain, they usually pass some of their savings back to depositors in the form of higher rates.
Unlike certificates of deposit or time deposits, money in savings and money market accounts accrue interest on a daily rate that can change from day to day. It is important to check back on BestCashCow regularly to be sure that your savings accounts continue to earn the most competitive rates, no matter what the rate environment is.
BestCashCow data has shown that online savings account rates have remained relatively stable over the past 18 months and the average online savings account rate is now equivalent to a three year CD.
· Higher interest rate
· Often, top notch online functionality
· Easy money transfer capabilities to and from a primary checking account
· Liquidity. Depositors can withdraw their money at any time.
· A variable interest rate. Although online banks have not lowered rates significantly in the past 18 months, they can lower them at any time.
· Interaction is only via phone or Internet. While you cannot walk into a branch and talk to a customer service representative if you have a problem, many of the leading, high profile online banks provide virtually instant phone access at all hours to a representative. However, interaction with some of the smaller online banks can be more difficult.
· You cannot get money cash or cashier's checks instantly as you can in a branch bank, and matters where you need to rely on the US Postal system can lead to significant delays and obstacles.
· No opportunity to build a relationship with a banker should you need a loan or additional services in the future.
All bank accounts listed on BestCashCow are FDIC insured. The Federal government provides insurance to a maximum amount of $250,000 per individual per institution (or $500,000 for joint account holders). All deposits (CDs, Checking, Savings Accounts) held in the same type of ownership at a single financial institution are only insured to $250,000. However, funds held in different types of ownership (Individual, Joint, Trust, Retirement) may fall under separate FDIC insurance provisions. Please visit the FDIC's website to determine your coverage limits based on your circumstances. BestCashCow.com recommends that you deposit savings in only FDIC insured institutions and that you do not exceed FDIC coverage limits.
To see how this account compares to other similar types of investments, please view the BestCashCow income guide. View it here.
Why do savings rates vary so much?
Even though rates are at levels that are historically very low, there is competition for your money. Like any active marketplace, there are buyers and sellers of goods and services at different prices.
Online banks offer higher savings and CD rates because they have lower expenses from not having to maintain brick-and-mortar locations, but you should also check rates at local banks and credit unions using the tabs above.
What is the difference between a savings account and a money market account?
The differences between a savings account and a money market account are largely arcane. Some money market accounts offer more ways access deposits by issuing checks and debit cards, but prudent consumers will compare the two interchangeably, focusing primarily on rates and service among FDIC-insured banks (or NCUA-insured, for credit unions). Consumers who maximize their use of online savings and money market accounts access these accounts through ACH transfers that are easily set up on the online bank’s website so the additional ways to access deposits that money market accounts offer are rarely valuable.
What does annual percentage yield (APY) mean?
Savings rates are displayed in terms of APY to indicate the effective annual-interest return, including the compounding of interest, of the course of a single year. $100,000 deposited in a savings or CD account with a 1.20% APY will earn $1,200 in the course of the year, but monthly interest in the first few months may be less than $100 a month (this also depends on the number of days in the month). Hence, the APY rate is ordinarily a couple of basis points above the real interest rates. Unlike with a CD, your actual APY in a savings may vary if the rate changes.
How do I choose the right savings account and should I consider CDs?
Begin your search with the table here on BestCashCow.com that you have found. In addition to checking online savings rates, you should also check local bank rates and local credit union rates. If you are unlikely to require access to your cash for some time, you may also consider certificates of deposit (CDs). While CDs have penalties for early withdrawal that may even eat into your principal, the rates on 2, 3, 4 and 5 year CDs are ordinarily significantly higher than savings rates. Several other sections and articles on BestCashCow can also help you to identify your proper cash allocation between savings and CDs. Access these below. You should also familiarize yourself with our Savings Booster Calculator in order to understand the importance of compounding interest at higher rates on your savings over time.
BestCashCow is the most comprehensive bank rate site on the Internet. We scan rates from over 6,000 banks and 4,000 credit unions to find and display the best deals for those looking to earn and save more. You can learn more about the company here.