America's Best Rates 2011 Q4: Getting more from your savings

MoneyRates.com Senior Financial Analyst, CFA
January 17, 2012

Read the current America's Best Rates feature

While bank customers everywhere are unhappy about today's low interest rates, some have it much worse than others -- in some cases, even 100 times worse.

The fourth-quarter MoneyRates.com survey of America's best deposits rates reveals, once again, that the interest you earn on your deposits depends very much on where you bank.The data showed that the top banks offered interest rates about four times the survey's national average.

But even more shocking, the survey's range in interest rates revealed that, depending on where you bank, you could be earning 100 times more -- or less -- interest than other depositors in comparable accounts at other institutions.

For this quarter, the survey also took into account the size and type of each bank surveyed. This data exposed some noteworthy trends, including the fact that the savings account interest rates at the online banks roughly quadrupled the rates offered at their brick-and-mortar counterparts.

A key feature of the America's Best Rates survey is that it is not just a one-time snapshot of a single day's rates. Instead, it is based on the average of rates offered over a calendar quarter, so it captures which banks consistently offered the best rates.

America's Best Rates is based on the MoneyRates Index, a representative sample of 100 banks, including the nation's 50 largest banks and 50 banks of varying size.

America's Best Rates: Savings account rates

The average savings account rate in the survey was 0.217 percent, but several banks offered considerably better rates. These were the 10 highest average savings account rates over the course of the fourth quarter of 2011:

Bank

Average Savings Account Rate

1. (tie) Discover Bank

1.000 percent

1. (tie) Sallie Mae Bank

1.000 percent

3. American Express

0.956 percent

4. ING Direct

0.899 percent

5. Ally Bank

0.887 percent

6. Capital One Bank

0.840 percent

7. Cashmere Valley Bank

0.795 percent

8. Zions Bank

0.763 percent

9. EverBank

0.760 percent

10. Mile High Bank

0.750 percent

This was the third consecutive quarter that Discover Bank topped the list of savings account rates, though this time it shared the top spot with Sallie Mae Bank. In all, nine of the fourth quarter's top 10 also made the third quarter list, reinforcing the notion that these are banks that offer consistently high rates.

America's Best Rates: Money market rates

The average money market rate was 0.253 percent, but as with savings accounts, several banks presented opportunities to do considerably better. Here are the top 10 money market rates for the fourth quarter of 2011.

Bank

Average Money Market Rate

1. Sallie Mae Bank

1.000 percent

2. Discover Bank

0.969 percent

3. Nationwide Bank

0.963 percent

4. Hudson City Bank

0.900 percent

5. Ally Bank

0.887 percent

6. AIG Bank

0.835 percent

7. Zions Bank

0.763 percent

8. EverBank

0.760 percent

9. MetLife Bank

0.750 percent

10. OneWest Bank

0.651 percent

Sallie Mae Bank completed a couple of impressive feats by topping this list: It led the rankings for both savings account and money market rates, and this was the second consecutive quarter in which it had the top money market rate. Just as with the savings account list, nine out of the 10 banks on this list of top money market rates also appeared on the third-quarter list.

Differences by type and size of bank

Though rates varied widely from one bank to the next, a couple of trends emerged in how the type and size of banks correlated with the level of savings and money market rates they offered.

The clearest trend was the marked difference in average rates between online banks and traditional, brick-and-mortar banks. Online banks offered an average savings account rate of 0.671 percent, compared to just 0.158 for traditional banks. This advantage held for money market accounts as well, as online banks offered an average rate of 0.663 percent, compared with 0.213 percent for traditional banks.

In terms of size, medium-sized banks seemed to be the sweet spot for higher rates, though the rate differences by size were not huge. Medium-sized banks (those between $5 billion and $25 billion in deposits) offered average savings account rates of 0.279 percent, compared to 0.201 percent for large banks (deposits above $25 billion) and 0.194 for small banks (deposits below $5 billion). On the money market side, medium banks offered average rates of 0.313 percent, compared with 0.237 percent for large banks, and 0.233 percent for small banks.

As in previous quarters, the survey confirmed the value of shopping for savings and money market rates. General trends suggest that online banks may a good place to start searching for the best interest rates, though the specific banks on the lists above might be the surest bets of all.

MoneyRates Featured Savings Rates
 Account Type
 Amount

Type: Savings

Minimum to earn APY $0

0.90%APY

Rates as of 4/16/2014
FDIC Insured

Advertiser Comments

  • Trusted Name and FDIC-Insured. No Transaction Fees. Open Now!

Type: Savings

Minimum to earn APY $0

0.87%APY

Rates as of 4/16/2014
FDIC Insured

Advertiser Comments

  • No minimum deposit to open.
  • No monthly maintenance fees.
  • Member FDIC.

Type: Savings

Minimum to earn APY $0

0.90%APY

Rates as of 4/16/2014
FDIC Insured

Advertiser Comments

  • No Minimum Balance
  • No Monthly Maintenance Fees
  • FDIC Insured

Type: Savings

Minimum to earn APY $100

0.90%APY

Rates as of 4/16/2014
FDIC Insured

Advertiser Comments

  • Secure Online Savings. 100% of Deposits are Fully Insured
  • High Yield Online Savings. Earn .90% APY with Small Min Bal
  • Checking Savings & CDs. Online Bill Pay & Mobile Banking

Type: Savings

Minimum to earn APY $0

0.75%APY

Rates as of 4/16/2014
FDIC Insured

Advertiser Comments

  • Capital One 360: No fees. No minimums. No changing banks.

Type: Savings

Minimum to earn APY $25000

0.95%APY

Rates as of 4/16/2014
FDIC Insured

Advertiser Comments

  • Built on the heritage of over 100 years.
  • Member FDIC.

Type: Savings

Minimum to earn APY $5000

0.85%APY

Rates as of 4/16/2014
FDIC Insured

Advertiser Comments

  • Easy to open. Easy to fund. Easy to manage.
  • Free online banking and eStatements.
  • National network of free ATMs.

Rates / APY terms above are current as of the date indicated. These quotes are from banks, credit unions and thrifts, some of which have paid for a link to their website. Bank, thrift and credit union deposits are insured by the FDIC or NCUA. Contact the bank for the terms and conditions that may apply to you. Rates are subject to change without notice and may not be the same at all branches.

Your responses to ‘America's Best Rates 2011 Q4: Getting more from your savings’

Showing 1 comment | Add your comment
j slavin

29 January 2012 at 6:21 pm

Might as well put it in a mattress!

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