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Online Savings & Money Market Account Rates 2019

Highest Online Bank Rates for Savings And Money Market Accounts - April 21, 2019

Savings Account National Average Rate: 0.21% ?

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Western State Bank
2.50% 11.74x $0
Banesco USA
2.47% 11.60x $100
Rising Bank, a Division of Midwest BankCentre
2.45% 11.50x $1,000
New account holders only.
UFB Direct, a division of Bofi Federal Bank
2.45% 11.50x $25,000
CIT Bank
2.45% 11.50x $25,000
2.41% 11.31x $10,000
My Savings Direct, a division of Emigrant Bank
2.40% 11.27x $1
Transportation Alliance Bank, Inc. d/b/a TAB Bank
2.40% 11.27x $2,500
Quontic Bank
2.40% 11.27x $100,000
2.39% 11.22x $0
New money only.
Rate available for new accounts only.
Citizens Access
2.35% 11.03x $5,000
Purepoint MUFG Union
2.35% 11.03x $10,000
Sallie Mae Bank
2.30% 10.80x $0
Live Oak Banking Company
2.30% 10.80x $0
Northpointe Bank
2.30% 10.80x $25,000
SFGI Direct, a division of Summit Community Bank
2.27% 10.66x $0
FNBO Direct
2.25% 10.56x $1
Promotional rate for new depositors only. Prior depositors may receive a lower rate.
Marcus: By Goldman Sachs
2.25% 10.56x $1
Synchrony Bank
2.25% 10.56x $30
Promotional rate for new account holders only.
Customers Bank
2.25% 10.56x $25,000
Amboy Direct
2.25% 10.56x $30,000
BAC Florida
2.25% 10.56x $100,000
Barclays Bank Delaware
2.20% 10.33x $0
Ally Bank
2.20% 10.33x $0
Incredible Bank, a division of River Valley Bank
2.20% 10.33x $25,000
Peoples Bank (Mississippi)
2.15% 10.09x $10,000
TIAA Bank / Everbank
2.15% 10.09x $100,000
American Express Bank, FSB
2.10% 9.86x $0
Discover Bank
2.10% 9.86x $0
2.10% 9.86x $5
Bank5 Connect
2.05% 9.62x $10
Radius Bank
2.05% 9.62x $25,000
2.02% 9.48x $2,000
Ridgewood Savings Bank
2.00% 9.39x $0
Clear Sky Accounts
2.00% 9.39x $1
Colorado Federal Savings Bank
2.00% 9.39x $1
Mutual of Omaha Bank
2.00% 9.39x $1,000
Capital One 360
2.00% 9.39x $10,000
2.00% 9.39x $100,000
BankPurely, a division of Flushing Bank
1.90% 8.92x $0
ableBanking, a division of Northeast Bank
1.85% 8.69x $1,000
My Banking Direct, a division of New York Community Bank
1.85% 8.69x $25,000
Cross River Bank
1.82% 8.54x $0
Dollar Savings Direct, a division of Emigrant Bank
1.80% 8.45x $0
Northern Bank Direct
1.51% 7.09x $0
Zions Bank
1.26% 5.92x $1,000
Axos Bank, a division of Bofi Federal Bank
1.05% 4.93x $0
Charles Schwab Bank
0.50% 2.35x $0
OneWest Bank, a division of CIT Bank
0.40% 1.88x $100,000
New Dominion Direct
0.40% 1.88x $100,000
CNB Bank Direct
0.26% 1.22x $100
AirBanking, A Division of MainStreet Bank
0.25% 1.17x $1,000
Kirkpatrick Bank
0.15% 0.70x $1
Dime Community Bank
0.05% 0.23x $0
All rates listed are Annual Percentage Yield (APY). The APY rate in a savings account or money market account is a variable rate that is subject to change at any point. The Min listed is the minimum deposit account balance required to obtain the rate listed.

If you have cash in a large bank, or any bank with low savings rates, you are making less in interest than you could be and should be making. There are FDIC-insured banks that will pay you more through higher savings rates on your deposits. Take a few minutes to explore the table above that presents an unbiased list based on the best savings rates currently offered by online banks. You may be able to boost your annual interest earned from savings by more than 10X. Banks are always competing for your money. Take advantage of it!

Summary: Highest Savings Accounts

Bank Institution Interest Rate (APY)
Western State Bank 2.50% APY with no minimum
Banesco USA 2.47% APY with $100 minimum
Rising Bank, a Division of Midwest BankCentre 2.45% APY with $1,000 minimum, a division of Flushing Bank 2.45% APY with $25,000 minimum
UFB Direct, a division of Bofi Federal Bank 2.45% APY with $25,000 minimum
CIT Bank 2.45% APY with $25,000 minimum

What Our Users and Experts Say About The Most Well Known Online Savings Accounts in January 2019

Marcus logo

Marcus Savings by Goldman Sachs - 2.25% APY, $1 minimum

Great for: High Savings and No Penalty CD Rates with no transaction fees ever

Overview: Marcus is the online bank of Goldman Sachs. Throughout 2018, it consistently offered one of the highest online savings rates, earning it recognition as a BestCashCow 2019 Best Bet.

Highlights: Marcus is very highly rated in customer reviews on BestCashCow. Users cite the consistently high savings rates, lightening fast ACH transfers, the ease of web access, strong customer service and the absence of any fees ever.

What to watch for: Marcus does not yet have a mobile app.

Citizens Access logo

Citizens Access Online Savings – 2.35% APY, $5,000 minimum

Great For: High Savings and No Penalty CD Rates with no transaction fees ever

Overview: Citizens Access is a relatively new entrant in the online banking space, but is a subsidiary of Citizens Bank, one the largest, oldest and most well established US banking institutions.

Highlights: Citizens Access never changes any monthly fees. Its user reviews on BestCashCow have been outstanding. Its consistent rate increases at or in anticipation of each Federal Reserve action in 2018 has earned it a spot as one of BestCashCow’s Best Bets for 2019.

What to watch for: All Citizens Access savings and CD products require a $5,000 minimum balance.

Ally logo

Ally Bank Online Savings Account – 2.20% APY, no minimum

Great For: Consistently Competitive savings and No Penalty CD rates with 24/7 Customer Service

Overview: Ally’s strong advertising campaigns and name recognition has made it one of the most recognized online banks. The savings rate is consistently competitive, and the bank also offers competitive CD products (with modest early withdrawal penalties) and no penalty CDs (with no early withdrawal penalties).

Highlights: BestCashCow user reviews cite a strong mobile app, great customer support, and the ease of getting into and out of No Penalty CD products. Ally also recently offered new and existing users a 1% cash promotions for bringing new deposits.

What to watch for: Some users have expressed disappointment with long wait times in reaching customer service by phone during peak hours. Others have commented about disappointment in being aggressively cross-sold for auto loan, personal loan, credit card and online banking products.

CIT logo

CIT Bank Savings Builder – 2.45% APY

Great For: Consistently Competitive rate

Overview: CIT Bank is a nationwide direct bank and is a division of CIT Bank, N.A. CIT was an early entrant into the online banking space, and has been offering competitive savings and CD products to US customers through the internet for many years. Due to the competitive positioning of its Savings Builder Account, we have rated CIT Bank as a BestCashCow 2019 Best Bet.

Highlights: User reviews left on BestCashCow’s savings table are consistently strong with users highlighting strong and responsive customer service by phone when necessary.

What to watch for: The Savings Builder account requires a $25,000 balance or a $100 deposit with at least $100 in subsequent monthly deposits.

Synchrony logo

Synchrony Bank High Yield Savings – 2.25% APY, no minimum

Great For: Consistently Competitive rate and 24/7 Access to Customer Support

Overview: Synchrony Bank is the former GE Capital Retail Bank that has now been spun off completely into its own institution, and has offered very competitive online savings and CD rates for some time. As Synchrony is an entirely independent entity now, BestCashCow does not believe that Synchrony has exposure to GE’s problems .

Highlights: User reviews left on BestCashCow cite strong and consistently available customer service.

What to watch for: Synchrony is no longer as aggressive or quick to raise rates as many of its competitors. It has become more aggressive in its special CD offerings (14-month and 15-month) than in its savings rate. Some customers have noted that the early withdrawal penalties for some of its special CDs are onerous.

Barclays logo

Barclays Bank Delaware Savings Account - 2.20% APY, no minimum

Good for: Solid APY with No Minimum Balance

Overview: Barclays Bank Delaware is a division of the often-troubled UK-based Barclays PLC. In the US, its brand recognition emanates from its role as one of the credit card issuers for American Airlines. The US subsidiary does not have a branch network enabling it to pass along competitive savings and CD rates to its customers.

Highlights: Barclays offers no minimum to open, 24/7 access to funds, online transfers to and from other banks, direct deposit and a mobile app.

What to watch for: Barclays Bank Delaware has not been consistently competitive in raising its savings rates as the Federal Reserveincreased rates over the last several years. While it used to be a very strongly reviewed bank by BestCashCow’s users, more recent reviews cite slower ACH transfers than some competitors. With uncertainty around Brexit, BestCashCow strongly recommends that depositors at this U.S. subsidiary maintain deposits within FDIC limits.


How Do Online Savings Accounts Work

Over the last two decades, online banks have emerged to offer depositors higher rates on their online savings and money market accounts than are available in the major money center banks and in smaller brick-and-mortar banks. Since 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. All online banks and local banks listed on BestCashCow are FDIC Insured.

Unlike certificates of deposit (CDs) or time deposits, money in savings and money market accounts accrue interest on a daily rate. The best yielding savings rates can conceivably change from day-to-day with new online banks emerging or existing banks more aggressively seeking to raise the capital accounts. 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.

The table above lists the highest yielding online savings account rates.

Recent Performance of Online Savings And Money Market Accounts

BestCashCow data has shown that the highest yielding online savings account rates have increased over the past year. The Federal Reserve remains committed to raising The Fed Funds Rate over the next year. This should cause leading savings rates to continue to increase through 2018 and into 2019.

The average online savings or money market rate exceeds the national average rate quite dramatically. The graph below shows how the average rates for online savings and money market accounts have trended over the last several years.  Even while online savings rates have improved, the the average rate of all online and locally offered savings accounts in the BestCashCow rate database has remained much lower at 0.14%. (The BestCashCow rate database, the largest in the world, contains rates on over 2,000,000 bank products from all 8,000 banks and 7,700 credit unions in the US.)

Best High Yield Savings or Money Market Accounts

Depending on where you live, there may be banks and credit unions offering rates still higher than the best online savings rates. Check BestCashCow’s list of the highest yielding local bank rates and the highest yielding credit union rates.

Best Online Bank Accounts with High Interest Rates

In the above table, you will find a list of the highest online savings account rates, ranked in descending order by interest rate currently offered. Online bank accounts are slightly different in terms of their features and the services offered. By reading the reviews of each bank, accessible from the rightmost column, you will be able to determine which bank is the best for you. Please also refer to the section below entitled “Best Online Savings Account Rates".

Are Online Savings Accounts Safe?

All bank accounts listed on BestCashCow are insured by the Federal Deposit Insurance Corporation ("FDIC"). The FDIC is a federal government chartered institution that 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. strongly recommends that you deposit savings in only FDIC insured institutions and that you do not exceed FDIC coverage limits. Please visit the FDIC's website to determine your coverage limits based on your circumstances.

Advantages of Online Savings Accounts:

  • Higher interest rate.
  • Often top notch online functionality with 24/7 access, 365 days a year. You can check your balance, update your contact info, make transfers, and order deposit slips at any time. For more pressing issues, customer support is also usually accessible 24/7, so you can talk to an actual human instead of your computer screen.
  • Superior online and mobile access. Many traditional banks have been slow to adopt the best web and mobile features to improve the customer experience online. 
  • Easy money transfer capabilities to and from a primary checking account.
  • Liquidity. Depositors can withdraw their money at any time.

Disadvantages of Online Only Banks:

  • A variable interest rate. Most leading online banks have not lowered rates significantly in the past 18 months, there are often new entrants to the market that can disappear as quickly as they arrive on the scene. Any savings rate can conceivably be lowered at any time.
  • Interaction is only via phone or Internet. You cannot walk into a branch and talk to a customer service representative if you have a problem with your savings account. Nonetheless, 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 as it is ordinarily limited to business hours in their area of operation.
  • 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.
  • There is no opportunity to build a relationship with a banker should you need a loan or additional services in the future.

What is the best account for easy access?

Depending on where you live and how accessible the branch is, you may find that the best account for easy access is through a local bank or credit union. However, today many high yielding savings and money market accounts provide such easy accessibility, including through mobile apps, and can enable such easy transfers to a correspondent account at a local bank through ACH transfers, that more and more people are opening accounts for cash and savings that they do not need immediately.

Is a high-yielding online savings account your best option?

High-interest savings accounts are always an ideal place to keep your emergency fund or any money to which still you need ready access. Your money will be safer than if you stuffed it under your mattress, and it will grow a bit, too. Investors will find that keeping large amounts of money in savings and CDs provides them with lower returns but cushions them against market crashes like we experienced in 2000 and 2001 and again in 2008 and 2009.

Compare Online Savings Accounts

Savings Rates at Most Recognized Online Banks

To see how savings and money market accounts compare with CDs or time deposits and bonds, view the BestCashCow income guide here.


What is a savings account?

A savings account is one of the simplest types of bank accounts. It allows you to store cash securely and earn interest on your money.

What is a money market account?

The differences between a savings account and a money market account are largely arcane. Some savings accounts are limited by US federal regulations to six outbound transfers per month (the bank may allow additional access for a fee). Money market accounts are technically not bound by those limitations and offer more ways access deposits by issuing checks and debit cards. 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.

How to Open a Savings Account?

The process of opening an online savings account or money market account is usually very simple. Banks ordinary ask you a few questions to verify your identify. These questions include seeking information from a state or government issued ID, such as a driver’s license. Due to increased US anti-money laundering rules and Department of Homeland Security requirements, it is very likely that you will also be asked to produce a photocopy of your license and a picture taken from your iPhone or other smartphone and emailed to the bank will ordinarily suffice. The bank may ask for information regarding a correspondent account from which you intend to have them draw the money to provide the initial funding. You therefore will need the ABA number and account number from an existing account that you have. They will verify this account by having you log back in to confirm the amounts of one or two small deposits to your correspondent account before they draw the funds from this account. Finally, many banks do a “soft” credit pull from Experian, Equifax or some other credit rating agency. While your credit rating will ordinarily not be affected, the application process may involve your answering questions about where you have lived, loans you may have had, past employers or cars you may have owned. Many people do not enjoy providing the amount of personal information required over the internet; therefore, some of the larger online banks have 24-7 customer service to guide you through the process. You can see the experiences of others with a given online savings bank that you are considering by reviewing the comments left in BestCashCow’s table above.

Are online savings rates always better than rates at brick-and-mortar banks?

No. Online banks often offer higher savings and CD rates because they have lower expenses from not having to maintain brick-and-mortar locations. You should also check rates at local banks and credit unions. Unlike other websites, compiles all of these rates, listing them in an unbiased manner that shows the proximity of each bank or credit union to you. Please access these rates using the tabs above.

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.

How do I choose the right savings or money market account?

Begin your search with the table here on In addition to checking online savings rates, you should also check local bank rates and local credit union rates.

What is the Best Fixed Rate Savings Account?

BestCashCow strongly encourages people to avoid very short-term promotional rates. The very nature of a savings or money market account is that the rate can change from one day to the next. Savings rates may be guaranteed not to change for some very short length of time, but they are not fixed. If you require a fixed rate or greater certainty that the rate that you are making will not change, you should consider CDs, which represent a time deposit, for some or all of your savings.

Should I consider CDs?

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. CDs also offer the certainty of rate stability for the term of the CD. Several sections and articles on BestCashCow can also help you to identify your proper cash allocation between savings and CDs.

With savings rates at such low levels, does earning a higher savings rate or the best savings rate really mean anything to me?

Even a difference of a couple of basis points (hundredths of percentage points) can really add up over time, especially on large sums of money. You may wish to familiarize yourself with the BestCashCow Savings Calculator in order to understand the importance of compounding interest at higher rates on your savings over time.

If you are too lazy to access the BestCashCow Savings Calculator or to bother with the magic of compounded earnings, here is the plain and simple truth:
  • $250,000 deposited at a major money center bank like Chase, Citibank, Bank of America or Wells Fargo is likely earning less than 0.10% APY. That money is therefore making no more than $250 a year in interest.
  • That same $250,000 deposited at a leading online bank is earning over 1% or over $2,500.
  • Even though the increased earnings from high yield savings (in this example, $2,250 annually) is fully taxable at the federal and state and local levels, wouldn’t you like to be earning that extra income from high-yielding savings accounts?

What does APY mean?

“APY” stands for annual percentage yield. 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 account or money market account may vary if the rate changes.

Are you still afraid to open a high interest-earning online savings account?

Here are some common reasons people hold off:
  • You need to make more than six withdrawals a month. Avoid potential problems by either opening a high earning online money market account (some of the best rates available in the table above are actually from online money market accounts), opening a savings account at a bank which does not enforce the 6 transfer limit, tying your account to a correspondent bank’s money market account or checking account at a major money center bank (like Chase, Citibank, Wells Fargo, or Bank of America) where you make one larger transfer each month.
  • You like having access to a physical branch. Find out what the minimum balance required to avoid fees on your account at your physical branch, then transfer the excess balances to a high yielding online savings or money market account. You’ll continue to have access to the physical interaction and services of the bank with which you are used to banking, but you will also be dramatically increasing the interest earned on cash you don’t need over time.
  • You need to deposit large sums of cash or checks in excess of the online bank’s mobile deposit limit. In this case, you need access to a physical branch. See point 2, above.
  • You want one institution to handle all of your financial matters. While most online banks do not offer mortgages, credit cards and brokerage services. But, in 2019, there is no financial advantage to keeping all of your financial transactions in one or even a handful of institutions.

What is a health savings account?

A health savings account (or HSA) is a tax advantaged medical savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan (HDHP). The funds contributed to an account are not subject to federal income tax at the time of deposit. According to IRS Publication 969 (2016), the interest or other earnings on the assets in the account are tax free and distributions may be tax free if you pay qualified medical expenses or other expenses not covered by health insurance such as dental or vision care. Due to the tax advantages of a health savings account, these accounts should be set up separately through banks offering them (such as Chase or Bank of America) and their assets should not be comingled with a high yielding online savings account. We know of no online banks currently offering HSAs.

What is an education savings account?

Education savings accounts, such as Coverdell Education savings accounts and 529 plans are accounts allowed family members to obtain certain tax advantages through setting aside for a child’s future education. 529 programs are administered at the state level and you must invest in programs they administer; Coverdell education savings accounts are move flexible (and generally following the same rules as IRAs), however we know of no online banks currently offering Coverdell Education savings accounts.

What is a child savings account?

A child savings account is a savings account in the name of the child with a parent or guardian named as the custodian on the account until the child reaches the age of 18 or 21 (depending of the child’s state of residency). A child savings account can be a great way to teach your child the importance of saving money from a young age. More information on child savings accounts can be found here. Ally and Capital One 360 are among the few online banks offering child savings accounts.


Finding the best high interest online savings or money market account is a highly subjective exercise. The best account for your neighbor may not be the best account for you. To help you determine which account is best for you, we have created the following 7 point checklist:
  • A competitive interest rate. BestCashCow maintains the most comprehensive list of deposit account rates. The rates above are the best available rates for online savings accounts. In order to ensure that your money continues to grow over time, you may wish to avoid banks which rely heavily on very short term promotional rates (such as EverBank). If you open an account with a promotional rate or even if you open an account where the rate isn’t promotional in nature, you should check back with BestCashCow regularly to be sure that your bank continues to offer one of the most competitive rates.
  • Full functionality through online and mobile access. Most of the accounts listed above have robust websites and mobile access that enables full functionality. Read the comments from other users before opening an account as they often highlight problems with access.
  • Access how the bank provides customer service. Many of the leading online banks now have customer service representatives who are U.S. based and available 24/7 with low wait times. This is often a distinguishing feature that makes a well-recognized bank significantly more attractive than a smaller bank trying to enter the online banking arena.
  • Absence of fees. Be sure that you are opening an online account with a bank that doesn’t charge fees and has very low minimum balance requirements. American Express, CIT, GS Bank, Barclays and Ally are all well known for low minimum requirements and the absence of any unusual monthly fees.
  • Easy Access to your Cash through Immediate Online Transfers. The reason why you keep money in savings is for access in an emergency or to take advantage of immediate financial opportunities. You need access to your cash. Yet, some banks impose strict limits on the amount of cash that you can access from your account in a single transfer or limit the numbers of transfers you can conduct over a given time period. Other banks can delay your transfers for days while they make money on the float. You should check with the bank where you are considering opening an online account to understand the restrictions before you open an account. You may also read the comments from other users above as they can highlight any which banks enable the best access to your cash.
  • Stay within FDIC limits! See the section above and read this article.
  • Use the BestCashCow Savings Calculator to see how important it is to be maximizing your interest on savings accounts over time.


Find out how much extra money you can earn by moving your bank money into an account that pays more.

Use or Change these Amounts And Rates

Another Benefit of No Penalty CDs Quickly Comes to the Fore

Rate information contained on this page may have changed. Please find latest savings rates.

Six months ago, I wrote on BestCashCow about the benefits and disadvantages of No Penalty CDs.    At the time, my analysis focused heavily on the opportunity to gain a small amount of yield over savings accounts with no risk and very little inconvenience.   So long as you do not need to access you cash for 10 days, the two main drawbacks are that you ordinarily need to close (and reopen) the entire product in order to make even a small withdrawal and you need to monitor rates in a rising rate environment to be sure that you are still earning a competitive rate (BestCashCow makes monitoring rates easy here).

My article was based on the assumption that savings rates would continue to rise in the manner in which the Federal Reserve was guiding at the time and that we would see savings rates over 3% in 2019.   Since then, the Federal Reserve has lost its independence from the Executive branch and its most recent guidance indicates that it isn’t going to be raising the Fed funds rate in 2019.   CD rates had already begun coming down before the President (directly and through Stephen Moore) and Larry Kudlow launched an attack last week on Jerome Powell, demanding an immediate 50 basis points reduction in the Fed Funds rate in order to combat an inverted yield curve.

It is now highly unlikely that savings rates are going to be increasing as we go through 2019, and it is very possible that they could fall from here.   That makes any opportunity to earn a premium over your current savings rate very attractive, and it also makes it attractive to lock in such a rate for around a year.  But, you should be hesitant to go out much longer than a year as there is not much of a premium in longer term CDs at the moment and the Fed is still guiding towards a Fed Funds raise in 2020).     

As of this writing, you can still find a one-year CD that yield 2.80% or more.   You can find those rates online.   You can also find them at banks near you and credit unions near you.

In an environment where rates are not going up and where there is a still premium in one-year CDs, the main reason that people resist one-year CDs is the early withdrawal penalties.   Most online banks charge a penalty of at least 3 months interest should you require your cash before maturity, and this penalty can invade principal.  Some banks and credit union charge more than others for early withdrawal.

No Penalty CDs do not bear the risk of an early withdrawal penalty and enable you to lock in a rate for about a year.

As of this writing there are three interesting No Penalty CDs being offered by major online banks.   Purepoint is offering 2.60% on their 13-month, Marcus is offer 2.35% on their 13-month and Ally is offering 2.30% on their 11-month.   At each of these banks, these rates not only represent a premium over the comparable online savings rate, but also prevent your rate from falling.   You, however, may still find higher online savings rates from other banks, but you’ll bear the risk of falling rates during this year in which the direction and independence of the Federal Reserve has become less certain.

You can always check No Penalty CD rates along with other special term CD rates here.

Editor's Note: On April 9, 2019, Purepoint lowered their 13-Month No Penalty CD rate from 2.60% to 2.50%.

April 2019 Update – With the Fed on Pause, Here are 5 Savings and CD Products to Consider

Rate information contained on this page may have changed. Please find latest savings rates.

The Fed’s March meeting ended with guidance that it is going to keep the Fed Funds rate on hold until at least early 2020 and the Trump Administration is actively campaigning for an immediate reduction in the rate in order to fight off an inverted yield curve.  

Against this new reality, those who have cash that they aren’t going to need for a while might want to consider CDs.

Here are some products that we find particularly compelling:

1.  Colorado Federal Savings Bank – 2.86% 1-Year CD, $5,000 Minimum

CSFB has been around for a while, and while they have never been competitive on the online savings side, their online CDs have been attractive.   After raising their CD rates on March 15, their one-year CD is one basis point above the next highest rate.   Their early withdrawal penalty is 3 months interest.   It is a smaller bank so you should be careful not to go above FDIC limits.

2. CitizensAccess – 2.85% 1-Year CD, $5,000 Minimum

CitizensAccess has gotten positive reviews on BestCashCow since launching in 2018.   Their accounts are easy to open and manage online and the penalty for early withdrawal is also only 3 months interest.  

Check out the best 1-year CD rates here.

3.  Purepoint – 2.60% 13-Month No Penalty CD, $10,000 Minimum

Even with the change in the Federal Reserve’s disposition, many are hesitant to lock their money in for a year.  We recently recommended, therefore, that people take a new look at No Penalty CDs.   Within the No Penalty CD space, Purepoint’s 2.60% 13-Month No Penalty CD is the most attractive.   It represents at least a 10 basis point premium on the best savings accounts (and a 25 basis point premium on Purepoint’s savings account) and does not have the liquidity risk of CDs.  

Check out other No Penalty and Special Term CD rates here

4.   My Savings Direct – 2.40% Savings Rate, $1 Minimum Balance.

My Savings Direct is owned by Emigrant Bank.   While Emigrant has disappointed customers by lowering rates and playing games in the past, they have held their savings rates constant for the last few months and may have moved beyond their past games.   For now, their rate is one of the best rates available online with no minimum balance.

5.    CIBC Bank – 2.39% Savings Rate, No Minimum Balance

CIBC is one of Canada’s largest banks and launched its US online bank in late 2018.  CIBC was among the first to raise their rates when the Federal Reserve raised the Fed Funds to its current level in December.   Given that they are a new entrant to the space and eager to gain a foothold in the US online savings market, we think that they will be among the last to lower rates if the Fed really begins to change course through 2019.  The bank’s online savings account has no minimum balance.

See and compare all of the best online savings rates here.

Have a great month.

Avoid CNote and Other So-Called Savings Alternatives

I was recently contacted by a journalist from a very well respected and widely circulated financial publication.   She wanted my opinion of something called CNote, having already spoken with others (inside and outside the financial field) who were gushing over this product and company that had just won an award at South By Southwest in Austin.

I had not been familiar with CNote.   I researched it.   What I found was troubling, to say the least.

When I cofounded BestCashCow several years ago, the object of the site was to provide the largest and most comprehensive database of bank savings and CD rates in order to help people save and earn more without taking on additional risk.  That remains the mission of the site today.  

Alarm bells go off when I see people comparing anything to a traditional savings or CD product in order to induce people to put money that they cannot afford to risk into a product that bears none of the characteristics of a savings bank product.   In the post-financial crisis era with increased consumer financial protection from the CFPB, selling a financial product that has completely different characteristics from a savings or a CD product (no liquidity parachute, no change in rates) and calling it a savings or CD product is highly troubling.

CNote is neither a savings product or a CD product.   It is entirely illiquid – you can only recover 10% of your principal each quarter.  This is a loan investment product with significant risk compared to a savings product from a bank.   Unlike a savings or CD product, money you deposit with CNote is not insured by the FDIC, NCUA or anyone else.

CNote is now offering 2.75%.   With online savings rates at or around that level and short-term CD rates much higher, the current yield that CNote is offering is quite simply much too low to justify the risk.

CNote presumably is legal under Tier 2 of Regulation A of the Securities Act of 1933 (as amended in 2015).     But it is a loan investment product and bears the risk of a loan, not the risk of a savings product or a CD product.   I suspect you may see regulators (the SEC and Treasury Department / Office of the Comptroller of the Currency) weigh in on the use of the terms “checking and savings” and “CDs” with the whole range of products now being promoted by the uninsured neobanks and Silicon Valley-backed outfits such as CNote.  However, in the meantime it falls to you (the consumer) to product yourself by depositing money you cannot afford to risk only in products from FDIC-insured banks and NCUA-insured credit unions. 

The thing that concerns me most about CNote and some of the Neobanks (such as Aspiration) is their effort to seduce consumers with their argument that they are “investing socially”.   Implicit in this argument is the inference that banks and credit unions are not investing in things that are in the public good.   In fact, the desire to do good is a powerful influence in FDIC insured institutions.  Putting your money in local banks and credit unions that lend directly in your community is a great and perfectly safe way to keep your hard earned money working in your community (or some other community).  (In fact, BestCashCow can help you to research credit unions and community banks that have goals and objectives that align with your social investing objectives).

If you cannot find a bank or credit union that meets your goals or want specifically to earn a higher rate of return by investing in, say, women-owned ventures or electric school buses, you can find social investing-oriented funds that offer rewards that are more consistent with the risk level.

You can learn more about CNote in this article in Forbes where I am quoted.

Bottom line: Steer yourself far away from CNote and products like it.

March 2019 Update - 5 Savings and CD Offerings to Check Out

Rate information contained on this page may have changed. Please find latest savings rates.

We are pulling through the winter, and savings and CD rates are continuing to firm, but are not moving dramatically higher as the Fed now seems intent to hold the Fed Funds rate at 2.25% to 2.50% until later in the year.

Here are 5 products that we find particularly compelling:

1.   CIT Bank Savings Builder – 2.45%, Requires $25,000 Balance or $100 plus an additional deposit of $100 a month

CIT Bank’s reviews are largely favorable and their rate is very attractive.   BestCashCow has named CIT as one of our best bets for 2019 so we think it will remain competitive.   There are two ways to qualify for the savings builder account – either to maintain a $25,000 balance or to open the account with $100 and deposit at least $100 during each monthly measurement period (between the 4th day of each month until the 4th day of the following month).

2.    CIBC Bank – 2.39% Savings Rate, No Minimum Balance

CIBC is one of Canada’s largest banks and launched its US online bank in late 2018.  Their 2.39% savings rate is aggressive, and they have been among the first to raise their rates when the Federal Reserve raised the Fed Funds to its current level in December.   To boot, the bank’s online savings account has no minimum balance.

3.   My Savings Direct – 2.40% Savings Rate, $1 Minimum Balance

My Savings Direct is owned by Emigrant Bank.   An account here bears certain risks and disadvantages that are well known to anyone who has followed the online savings space and Emigrant’s strategy.   We highlighted these in our February newsletter.   But, until and unless these risks materialize, the rate is attractive at 2.40%.

See and compare all of the best online savings rates here.

4.   Purepoint – 2.60% 13-Month No Penalty CD, $10,000 Minimum

We have been hesitant to recommend CDs with rates rising, but we have also spoken very highly of the benefits of No Penalty CDs.  With that in mind, Purepoint’s 2.60% No Penalty CD, introduced earlier this week, is startlingly attractive.   It represents a 15 basis point premium on the best savings accounts (a 25 basis point premium on Purepoint’s savings account) and does not have the liquidity risk of CDs.   We think this product is a very attractive alternative to a savings account at the moment.

5.   Live Oak Bank – 2.85% 1-Year CD, $2,500 Minimum

Many are looking to short-term CDs to pick up yield and Live Oak’s 1-Year CD is one of the highest yielding and safest ways that we see to do it.   The penalty for early withdrawal is only 3 months' interest and the minimum balance is only $2,500.  

Check out the best 1-year CD rates here and see long-term CD rates here and special rate CDs here.

Have a great month.

February 2019 Update – With the Fed on Hold, Here Are Five Attractive Nationally Available Online Savings And CD Rates

Rate information contained on this page may have changed. Please find latest savings rates.

Savings and CD rates continued to firm into the end of 2018.  However, as we predicted back in November, Fed Chairman Jay Powell has now fully equivocated as a result of presidential harassment and the Federal Reserve has now held the Fed Funds rate at 2.25% to 2.50%.   It is possible that rates could be here until later in 2018.  Here are 3 savings accounts that we find attractive at this point:

1.   MySavingsDirect – 2.40% Savings Rate, No Minimum Balance

MySavingsDirect is a division of Emigrant Bank, a large New York-based bank.   Customer reviews are mixed and Emigrant has a history of dropping rates in one division (holding customers who don’t regularly check their rates) while raising rates in other divisions.   However, MySavingsDirect has been competing for depositors by raising rates for some time and, it is, at least for the moment, the highest yielding account without a minimum balance requirement.   In addition to the need to stay on top of the rate to make sure it isn’t lowered, those considering MySavingsDirect should know that it does have direct ACH connections to all other banks (which is something that is pretty standard among most online banks).

2.    CIBC Bank – 2.39% Savings Rate, No Minimum Balance

A couple of years ago, The Private Bank which operated out of Chicago offered competitive online savings rates.   The bank was purchased by the CIBC, one of Canada’s largest banks, which in late 2018 re-launched the platform under the CIBC Agility brand in order to compete for deposit accounts in the U.S.   CIBC now appears to be a very aggressive market participant.    It has been among the first to raise their rates when the Federal Reserve raised the Fed Funds rate.   To boot, the bank’s online savings account has no minimum balance.   

3.   CIT Bank Savings Builder – 2.45%, Requires $25,000 Balance or $100 plus an additional deposit of $100 a month

CIT Bank’s reviews are ordinarily favorable and their rate is very attractive.   However, unlike the above two savings accounts, this rate does have a minimum balance requirement.   There are two ways to qualify for the savings builder account – either to maintain a $25,000 balance or to open the account with $100 and deposit at least $100 during each monthly measurement period (between the 4th day of each month until the 4th day of the following month).   We think CIT is likely to remain competitive and named it one of our best bets for 2019.

See and compare all of the best online savings rates here. 

While we have been hesitant to recommend CDs with rates rising, the Federal Reserve’s recent decision to slow the pace of rate increases may provide reason to take a look at one-year CDs, particularly those with low early withdrawal fees.   Here are two that are competitive, and will penalize you with only 3 months of interest should you need to break the CD early.  

4.   Live Oak Bank – 2.85% 1-Year CD, $2,500 Minimum

Live Oak Bank is a small North Carolina bank that entered the online banking arena last year.     It has not been a consistent competitive player in the savings space and it can and does frequently adjust CD rates.   At the time of this publication, their 1-year CD rate stands at 2.85%.    Live Oak does not enable an account holder to have over $250,000 in total in their CDs, and you should not be exceeding FDIC limits with a small North Carolina bank anyway.

5.   Sallie Mae Bank - 2.85% 1-Year CD, $2,500 Minimum

Sallie Mae Bank has an old interface and you will see a spinning wheel when you try to open a Certificate of Deposit there.   But, its rate is 2.85% on a 1-year CD and it is likely that they will still be among the most competitive rates when it comes time to renew.

Check out the best 1-year CD rates here and see long-term CD rates here and special rate CDs here.

Have a great month.

Stop Waiting for the Big Money Center Banks to Raise their Rates

It has been many years since I co-founded BestCashCow, and I have heard just about every excuse possible for keeping your cash in low interest earning savings and money market accounts, checking accounts and CDs.

However, there is a new refrain that I am hearing and it is actually really irking me.  It goes something like this.

“Well, I have been meaning to move my cash out of Wells Fargo but I haven’t gotten around to it and I am sure that if rates are going up, they will have to become competitive soon so I am just going to leave it there.”

The only part of this quote that is even remotely correct is that rates are, in fact, going up.   The reality is that the large money center banks are currently flush with cash from other funding operations, and from others taking the same wait-and-see approach.   Today, the big banks are able to raise more money than ever before through capital markets to fund their lending operations, and they now have more money in deposits than they have ever had before.

These banks are counting on being able to successfully sell the pitch that they are delivering a better service and therefore customers should be willing to continue to accept zero interest rates for the service.   My personal view is that this pitch may continue to be compelling for depositors of small amounts.   For those holding $15,000 in a deposit account at Chase you gain access to their ATM network, their branch network, notaries and maybe safe deposit boxes, and even then you really need to require these services to justify forgoing over $400 in interest annually.

But, anyone holding over the bare minimum for the services that they need from a money center bank is not adopting best practices in relation to their finances.

There are banks and credit unions where you live and online banks that compete for your savings.   In fact, there are local bankscredit unions, online banks that are competing for your checking by offering far better rates and often times the same services.   Seek them out now.