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America's Best Rates: Top accounts offer 4x average savings rates

Richard Barrington

It was a rough quarter for deposit account rates, as most categories of rates tracked by the quarterly America's Best Rates survey declined during the third quarter of 2016. The best any category did during the quarter was hold steady at its prior level.

The general decline in savings account and money market rates was a setback, after they had generally made progress since hitting bottom in early 2015. Still, what matters most for consumers is that there are some exceptions, those bright spots where they can find significantly better interest rates.

America's Best Savings Accounts

These were the top savings account rates during the third quarter of 2016:

Bank

Recognitions

Q3 ’16 Avg Savings Rate (APY)

1st place

Salem Five Direct

ABR platinum medal winner

1.10%

2nd place

SFGI Direct

ABR gold medal winner

1.06%

3rd place (tie)

GS Bank

ABR silver medal winner

1.05%

3rd place (tie)

Synchrony Bank

ABR silver medal winner

1.05%

5th place (tie)

Ally Bank

ABR bronze medal winner

1.00%

5th place (tie)

Barclays Bank

ABR bronze medal winner

1.00%

5th place (tie)

iGo Banking

ABR bronze medal winner

1.00%

5th place (tie)

Radius Bank

ABR bronze medal winner

1.00%

9th place (tie)

CIT Bank

0.95%

9th place (tie)

Discover Bank

0.95%

9th place (tie)

FNBO Direct

0.95%

These high bank rates are quite a departure from the average savings account rate, which dropped by a small fraction to 0.231 percent. This means that all the accounts on the above list paid more than four times more interest than the average savings account.

Consumers can simply pick out one of the best savings accounts from this list, but should be aware that savings account rates are subject to change. Therefore, it is always wise to check out the most recent rates before making a decision.

Online savings accounts 8x average rates

Generally speaking, a good place to look for higher savings account rates is among online accounts. 10 of the 11 accounts on the above list are online accounts. Overall, online savings accounts offered an average rate of 0.650 percent, compared to just 0.075 percent for traditional, branch-based accounts. This means that consumers who bank online are generally earning better than eight times more on their savings accounts than those who bank at a physical bank branch.

In some cases, shopping at a smaller bank might gain you an advantage. Small banks, defined in this survey as those with less than $5 billion in deposits, offered an average savings account rate of 0.319 percent. This was better than the average offered by large banks (0.235 percent) and medium-sized banks (0.127 percent).

Still, the online rate advantage far outweighed the difference in average rate attributable to size.

America's Best Money Market Accounts

The following were the ten highest money market rates offered during the third quarter:

Bank

Recognitions

Q3 ’16 Avg MMA Rate

1st place 

Able Banking

ABR platinum medal winner

1.00%

2nd place

BBVA Compass

ABR gold medal winner

0.92%

3rd place (tie)

Sallie Mae Bank

ABR silver medal winner

0.90%

3rd place (tie)

Santander Bank

ABR silver medal winner

0.90%

5th place (tie)

Ally Bank

ABR bronze medal winner

0.85%

5th place (tie)

Synchrony Bank

ABR bronze medal winner

0.85%

7th place (tie)

Discover Bank

0.80%

7th place (tie)

First Internet Bank

0.80%

9th place

TIAA Direct

0.65%

10th place

EverBank

0.61%

The overall average money market rate dipped by 0.010 percent during the quarter to 0.194 percent. As low as this is, it is still an improvement over the lowest point for money market rates of 0.158 percent, reached during the first quarter of 2015.

Still, while money market rates have bounced back somewhat from their low point, the way to make a real improvement in the interest you earn is to find one of the top rates. The accounts on the above list represent rates that are about three to five times the average money market rate.

Majority of top money market account rates from online accounts

As with savings accounts, the best place to look for higher money market rates is among online accounts. The average online money market rate in the survey was 0.534 percent, compared with an average money market rate of 0.112 percent from traditional branch-based accounts. Seven of the top 10 money market rates in the survey were from online accounts.

Money market rates also followed the same size trends as savings accounts. The average money market rate from a small bank during the third quarter was 0.246 percent, compared to 0.194 percent for large banks and 0.152 for medium-sized banks. Here again though, the advantage of online over traditional bank rates was far more significant that these size-based differences.

The America's Best Rates survey is based on deposit accounts offered by banks in the MoneyRates Index, which is a cross-section of banks including roughly 50 large banks and 25 each of medium and small banks.

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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