Online savings and CD rates rose in October. We continue to favor savings rates over CD rates. It remains likely that the Federal Reserve will raise the Fed Funds rate from its current 2.00 – 2.25% Fed Funds rate to a 2.25% - 2.50% rate in December. While the Fed continues to guide towards a Fed Funds rate over 3.00% before the end of 2019, it is increasingly possible that Presidential histrionics and/or a slowing economy may temper those moves so locking into online CDs may be an attractive proposition to some.

Here are 3 savings accounts that we find interesting at this point:

1. Citizens Access – 2.25% Savings Rate for balances over $5,000

Citizens Access is a division of Citizens Bank, N.A., a large established bank with over $150 billion in assets. It entered the online market in 2018 with a competitive 2.00% savings rate and has been quick to move rates up in response to Fed Funds moves. The reviews of the bank on BestCashCow are extremely positive.

Editor’s Note: Citizens Access is an advertiser of BestCashCow. Please read our Advertiser Disclosure here.

2. MySavingsDirect – 2.25% Savings Rate, No Minimum Balance

MySavingsDirect is a division of Emigrant Bank, a large New York-based bank. While the rate is attractive, Emigrant has developed a customer-unfriendly practice of remaining competitive for new customers by raising rates at different subsidiaries when the Federal Reserve moves. This practice leaves earlier customers earning a non-competitive rate. As rates continue to rise in 2019, you can expect that you will need to move your assets out of MySavingsDirect (perhaps to another Emigrant subsidiary) in order to stay competitive. That’s an OK strategy so long as you make a plan to check the latest savings rates on BestCashCow frequently. The good news is that Emigrant’s divisions make accounts easy to open and fund.

3. Marcus – 2.05% Online Savings rate for balances over $1

Marcus has outstanding customer reviews and lightening fast ACH transfers. Since Marcus is part of Goldman Sachs, depositors, especially those inclined to deposit over FDIC limits, can always sleep well at night. Importantly, as rates have risen through 2018, Marcus has proven to be faster to raise rates than the other most recognized online banks (Amex, Barclays and Ally). While it may not always sit on top of the table, depositors with Marcus can anticipate that their savings will remain competitive as rates rise. Those depositors who follow rates closely and are prepared to make adjustments as rates rise can now get 2.15% in Marcus’s 13-Month No Penalty CD. We recently wrote an article highlighting No Penalty CDs as a relatively risk-free way to boost your savings rate.

Editor’s Note: Marcus is an advertiser of BestCashCow. Please read our Advertiser Disclosure here.

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

Those compelled to reach for the higher rates than online CDs offer after a decade of abnormally lower returns on cash may want to consider the following two online CD products:

1. Citizens Access – 2.70% 1-Year CD for balances over $5,000

Citizens Access, mentioned above for its online savings account, is also offering one of the most competitive online CD rates nationally available. Even if savings rates are above 3.00% at the end of 2019, we don’t think you’ll make much less though 2019 by locking into a one-year CD throughout the course of the year with cash that you know you won’t need to access. Citizens Access has an early withdrawal penalty on CDs of 12-months or less of only 3 months’ interest.

See all of the best 1-year online CD rates here. You should also compare locally-offered 1-year CD rates here.

2. Citizens Access – 3.05% 3-Year CD for balances over $5,000

We are inclined to question whether a 35 basis point improvement over Citizens Access’s one-year CD rate represents an attractive enough premium for an additional two years’ commitment. However, many economists believe that inflation is not present and that the Federal Reserve just is not going to ever get much above a 3% Fed Funds rate in this cycle. Citizens Access’s early withdrawal penalty on CDs over 12 months is equal to 6 months interest on the CD which is shorter than the penalties for early withdrawal on long-term CDs charged by many other online banks.

See all of the best 3-year online CD rates here. You should also compare locally-offered 3-year CD rates here.

Have a great month and Happy Thanksgiving!

Here at BestCashCow, we have been a fan of the No Penalty Certificate of Deposit since Ally began offering it years ago. It ordinarily offers depositors a slight improvement over a comparable savings rate at the same online bank. Since this product can be terminated easily online with no penalty, it is basically a savings or money market account wearing a different skin (i.e., a different name).

In an environment where interest rates are falling, the product is especially good as you lock into a higher rate than savings and have some protection against falling rates.

Interest rates probably won’t fall in 2019, but the product remains appealing as a way to generate a better savings rate.

The two main disadvantages of No Penalty CDs are:

First, you will need to terminate the entire CD in order to make a partial withdrawal (as is the case for most CDs). Since it can be terminated without any penalty at any time after the first few days, and then a new one can be opened, this is more of a nuisance than a disadvantage for some.

Second, in a rising rate environment, this product only works for those who check rates regularly. Competitive savings and money market rates - including those offered by the same very online bank - can and do go above the No Penalty rate that you are locked into, and if this happens you will want to terminate the CD and move back to the savings account. The good news is that if the bank raises the No Penalty rate, you can terminate (again with no penalty) and reopen a new one at the higher rate in seconds.

Ally Bank is the most prominent player in the No Penalty area and has offered an 11-Month No Penalty CD for years. The best rate is usually only available for those with $25,000 or more to invest. Since Ally is currently offering a 1.90% rate for online savings and a 2.10% rate for this product, we think that it is more attractive at the moment than their current savings rate, so long as you have the $25,000 to invest.

CIT entered this market earlier this year with an 11-Month No Penalty CD that offers a 2.05% rate. However, since CIT is now offering 2.15% in its Savings Builder account, we think that product is better for those meeting its requirements (depositors maintaining a $25,000 minimum balance or who deposit $100 each month).

Marcus began offering its first No Penalty CDs yesterday when they introduced a 13-Month No Penalty CD at 2.15% with only a $500 minimum deposit. Since Marcus’s online savings rate is now 2.05%, depositors considering opening accounts and existing depositors are likely to find this attractive.

No Penalty CDs aren’t for everyone. As noted above, you shouldn’t consider them unless you do not anticipate needing the principle often and quickly and you are prepared to follow rates. But, if you meet these criteria, they just might be worth a look.

BestCashCow lists all online No Penalty CD rates and other special CD rates here. You may also find No Penalty CDs and other special CD rates from local banks near you here.

Here at BestCashCow, we’ve always been big proponents of earning the highest possible interest on your cash accounts (savings, CDs, checking). We are also big proponents of maximizing your credit card travel rewards by using the most valuable cards for your spend.(hyperlink /credit-cards)

We’ve noted as recently as yesterday that Chase is simply not competitive with the leading online banks when it offers 0.01% interest. It is remarkable that some customers continue to deposit large sums with Chase at that rate. It simply makes no sense.

Those who follow our credit card section know that we also value Chase’s Ultimate Rewards points – earned through the Sapphire Reserve Card and the Sapphire Preferred card – at around 2.05 cents. While Chase enables Reserve cardholders to redeem these Ultimate Rewards points directly for travel credits at 1.50 cents per point on its travel portal (and Preferred cardholders at 1.25), we think that they are worth much more than that when transferred to, and redeemed through, a partner like Hyatt, United or Singapore Airlines.

60,000 Chase Ultimate Rewards points transferred to Hyatt, for example, will get you 2 nights at the Park Hyatt Vendome in Paris or the Park Hyatt in New York (50,000 will get you two nights at the Churchill in London). Redeemed in this way, the 60,000 points achieve more than 2.05 cents in value and dramatically more than $468.25.

Where is the $468.25 number coming from? $468.25 is the interest you are going to earn on $75,000 if you were to deposit it in an online bank over the next 3 months at 2.50% (the highest online rate currently available). But, if you use that money to try out Chase’s Sapphire Banking over the next three months, they will give you the 60,000 Sapphire Points. We think that makes good sense. In fact, it makes sense even if the $75,000 is sitting idly in Chase for the next three months.

You can sign up for Chase’s Sapphire Banking directly on Chase’s website, but to receive the 60,000 points you need to be a current holder in good standing of either the Sapphire Reserve or Sapphire Preferred cards. It is also possible that, unlike with the sign-up bonuses for those cards, you will receive a 1099 for the 60,000 Ultimate Rewards points, as in this case the points are an interest alternative and not necessarily tax free as they have been ruled as a reward for credit card spend. But, even if you receive a 1099, the value is still there (the $468.25 that you are foregoing would also be fully taxable on a 1099).

This marks the first time since 2013 when it has made any sense for depositors to consider something other than cash interest for their savings.

Check online savings rates here.