American Flag

Online Savings & Money Market Account Rates 2019

Recent Articles


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.