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Online Savings & Money Market Account Rates 2021

Online Savings & Money Market Account Rates

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Morgan Stanley is Offering its Customers 2.10% on Savings or 2.40% on a 6-Month CD

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

Morgan Stanley is trying to get its large customer base to move some of their assets back to the bank from other institutions that may have offered better rates in the past.   They are doing this by offering an promotional savings rate of 2.10% or a 6-month CD rate of 2.40% so long as the capital is transferred from outside of Morgan Stanley.   These offers are available under December 7, 2018 and are subject to availability.  Certain conditions may apply.

Customers can deposit up to $2 million per product in each of two issuing subsidiaries – Morgan Stanley Bank, NA and Morgan Stanley Private Bank.   Each is separately FDIC insured.

The 2.10% savings rate is competitive versus online savings rates.    However, according to the terms of the offer, the rate will revert back to the non-promotional rate on March 1, 2019.

As of this publication, the 2.40% 6-month CD rate is above any nationally available online 6-month CD rate.  Locally available 6-month rates may be higher (check rates where you live here).

In the Spring, we suggested that these types of short-term promotional products offered by investment banks may become less attractive after depositors account for the loss of interest while transferring their money in (and presumably out, when the promotion ends).   You may also experience significant periods where your cash is sitting idle at the bank waiting for the bank’s next purchase date.   Read my earlier article here.  (

Additionally, the 6-month CD operates as a brokered CD, as cannot be made liquid with the payment of an early withdrawal penalty like most online CDs can so you better be awfully sure that you won’t need access to your money.  We’ve cautioned against brokered CDs many times (recently here) and you should be especially cautious in a rising interest rate environment like we are entering now.

Bottom line: You might be better off checking the best online savings rates here.

Federal Reserve Raises Fed Funds Target Rate to 2 - 2.25%

The Federal Reserve voted unanimously today to move the Federal Funds rate up by 25 basis points to 2 to 2.25%.

BestCashCow had predicted this move for some time.   By late last week, economists polled by various polling services had all moved to a position of over to 90% likelihood of this move.   It was very well telegraphed by Federal Reserve Chairman Jerome Powell. 

As a result of this move, we will see higher online savings rates.    You will also likely see more competitive local savings rates from banks and credit unions in your area.

We may also see a rise in CD rates, including online one-year CD rates and local one-year CD rates.

The Fed continues to be very hawkish.    We predict another rate move in December and several next year with 12 of 16 Fed members now forecasting this 4th hike for 2018.  

The Fed Funds’ long term target remains at 3.375% for 2020 and 2021.   Today, it raised its long-term "neutral" target to for years beyond 2021 to 3% from 2.90%.   Hence, we would continue to be very cautious about long-term CDs.

The Fed may need to move faster and harder than its now hawkish predictions.   Inflation is going to come as a result of Trump’s trade battles and China tariffs.   It isn’t just a premonition.  In fact, I saw a hawk today during my morning bike ride in Central Park.  In 20 years of riding my bike there, this was the first time seeing one on my morning ride.  It must mean something.  (He or she is shown on the picture).

Does the Stock Market Need to be Massively Overbought Before It Crashes?

I cannot turn on CNBC or Bloomberg without hearing some money management type explain that there is no risk of a stock market crash because it is not wildly overbought like it was in 1929, 1987, 2000 or 2008.   It seems that everyone is drinking this Kool-aid at the moment.

While it tastes good, it isn’t exactly right. 

The stock market is trading at a 2018 PE multiple of 18x and a 2019 multiple of 17x.

I would submit that a 17x future multiple for an economy that has the appearance of 3% growth is very expensive.   (I say appearance because I believe that tax relief generated most of this growth and that it will be rolled back in 2019, even if the Republicans maintain control of both houses of Congress).

The stock market is, in fact, buttressed by some stocks that are incredibly inexpensive on a PE basis.   Even some leading technology stocks appear very inexpensive (Apple and Intel, in particular).   But, some stocks are terribly out of whack with any sort of reasonable valuation metrics.

The PE multiple doesn’t need to be 20 or 25 or 30 for the market to be irrationally expensive.   There is no magic number.

And, market crashes or corrections are caused by a quick change in sentiment when the market is dramatically overbought.   In my view, some things that could cause a change in sentiment are: a President who is mentally incapacitated, a trade war with China / inflation, a change in control of the House of Representatives, or an environmental catastrophe.

Massively overbought or just irrationally expensive, there is trouble on the horizon.

This is a good time to increase your exposure to cash.   See the best rates here.