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America's Best Rates 2013 Q3: Deposit rates suffer a relapse

Savings account rates had a brief shining moment -- but it didn't last.

After defying a long-term trend by rising slightly in the second quarter of 2013, deposit rates again lost ground in the third quarter, according to the latest MoneyRates.com America's Best Rates survey. Savings account rates were not alone, as money market rates also declined during the third quarter, reaching their lowest point in the history of the survey.

The one hope for consumers is that there remains a wide gulf between the best savings and money market rates and the average rates for those accounts. This gives consumers who are willing to shop around -- and especially those who are willing to consider an online bank -- a chance to earn higher interest rates.

Here are some of those top savings and money market rates, as well as a discussion of the broader trends impacting bank yields today.

America's Best Rates: savings accounts

Below are the top savings account rates from the third quarter America's Best Rates survey, but 11 accounts appear rather than the usual 10 because of a three-way tie for ninth place:

Bank

Savings account rate

1st place

Doral Bank* (ABR platinum medal winner)

0.950 percent

2nd place (tie)

Barclays Bank (ABR gold medal winner)

0.900 percent

2nd place (tie)

Synchrony Bank** (ABR gold medal winner)

0.900 percent

4th place (tie)

American Express Bank (ABR silver medal winner)

0.850 percent

4th place (tie)

FNBO Direct (ABR silver medal winner)

0.850 percent

4th place (tie)

Mutual of Omaha Bank (ABR silver medal winner)

0.850 percent

7th place

Sallie Mae Bank (ABR bronze medal winner)

0.847 percent

8th place

Ally Bank

0.840 percent

9th place (tie)

CIT Bank

0.800 percent

9th place (tie)

Discover Bank

0.800 percent

*Doral Bank was closed in Puerto Rico February 2015. 

**Synchrony Bank is now known by this current name as of June 2014. It was previously referred to by its original name in an older version of this post.

The top savings account rates are in sharp contrast to the third quarter's average, which was just 0.185 percent, down from 0.192 percent the previous quarter. Most of the top-performing banks have shown a consistent commitment to offering high rates. Besides representing the best average rates from the third quarter, nine of the 11 banks listed above also made last quarter's list of top savings account rates.

By offering rates four or five times the average savings account rate, the top-performing banks show that customers can benefit by shopping around. In particular, customers may do well by looking at online banks, since eight of the eleven banks above are primarily online institutions. On average, online banks offered a savings account rate of 0.569 percent, compared to just 0.123 percent for traditional banks.

America's Best Rates: money market accounts

Here are the top 10 money market rates in the third-quarter survey:

Bank

Money market account rate

1st place

Doral Bank (ABR platinum medal winner)

0.945 percent

2nd place

Sallie Mae Bank (ABR gold medal winner)

0.900 percent

3rd place

Mutual of Omaha Bank (ABR silver medal winner)

0.850 percent

4th place

Ally Bank (ABR bronze medal winner)

0.840 percent

5th place

Synchrony Bank

0.800 percent

6th place

Nationwide Bank

0.760 percent

7th place

Discover Bank

0.700 percent

8th place

EverBank

0.612 percent

9th place

OneWest Bank

0.500 percent

10th place

Zions Bank

0.481 percent

While the very highest money market rates were fairly similar to the best savings account rates, there was less consistency to the top 10 in the money market category. This scarcity of top-level rates was also reflected in the average money market rate of 0.161 percent, which was 2.4 basis points lower than the average savings account rate. As recently as the second quarter of this year, the average money market rate was higher than the average savings account rate, but now savings accounts have held the edge for two consecutive quarters.

All of the banks from last quarter's top 10 made this quarter's list of the best money market rates, with the only change being that Discover Bank and EverBank swapped positions. Unlike the savings account category, in which online banks dominated the list of the top rates, banks that operate at least some branches actually outnumbered online banks six to four on the list of top money market rates. However, for the money market category as a whole, the average online rate of 0.549 percent easily outdistanced the average traditional bank rate of 0.129 percent.

Methodology and outlook

The quarterly survey of America's Best Rates is based on the MoneyRates Index, a sampling of 100 banks that includes the top 50 retail banks according to total deposits and 50 smaller banks. The survey's methodology emphasizes the consistency with which banks offer high rates, because the results are based on an average of rates measured throughout the quarter, rather than any one-time snapshot of rates.

As the banking industry enters the fourth quarter, it seems unlikely that 2013 will be the year when bank rates make a meaningful recovery from their multi-year decline. However, there is still some time for disruptive events or signs of progress to set the stage for 2014.

Here are leading offers from other online banks

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Currently Banking With:

  • Capital One 360
  • Barclays
  • Synchrony Bank
  • Ally Bank
  • CIT Bank
  • HSBC
  • Sallie Mae Bank
  • American Express Bank, FSB
  • Discover Bank
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