Best Rates for Savings & Deposits in the US

MoneyRates.com Senior Financial Analyst, CFA
April 28, 2014

America's Best Rates Q1 2014: Finding value in a low-rate environment

The rates on online and traditional savings accounts are moving in opposite directions. Customers who want higher bank yields would be wise to take note.

According to the latest MoneyRates.com America's Best Rates survey, the average interest rate for online savings accounts rose slightly in the first three months of the year, while the average for traditional, branch-based savings accounts fell yet again. These changes widened an already clear advantage for online savings account rates. In the money market account category, both online and traditional rates fell, though here too the advantage for online accounts grew bigger in the first quarter.

Trends in savings account rates

The first-quarter average rate for savings accounts was 0.176 percent, down just slightly from 0.179 percent the previous quarter. Online savings accounts resisted the overall trend, however, with the average rate on those accounts rising to 0.541 percent from the previous average of 0.539 percent. At the same time, the average rate on traditional savings accounts fell to 0.102 percent from its fourth-quarter 2013 level of 0.138 percent.

Here are the top 10 savings accounts in the survey and the average annual percentage yield (APY) for each for the first quarter of 2014:

Bank

Savings account rate

1st place

Doral Bank (ABR platinum medal winner)

0.940 percent

2nd place

GE Capital Retail Bank (ABR gold medal winner)

0.911 percent

3rd place (tie)

Barclays Bank (ABR silver medal winner)

0.900 percent

3rd place (tie)

GE Capital Bank (ABR silver medal winner)

0.900 percent

5th place

CIT Bank (ABR bronze medal winner)

0.873 percent

6th place

Capital One Bank

0.870 percent

7th place

Ally Bank

0.868 percent

8th place (tie)

Discover Bank

0.850 percent

8th place (tie)

FNBO Direct

0.850 percent

10th place

American Express Bank

0.832 percent

(Ed. note: GE Capital Retail Bank became Synchrony Bank in June 2014.)

Doral Bank was a repeat winner from the previous quarter, and all of the top 10 were also on the last top 10 list of 2013, though several of the positions after the top spot were shuffled.

Besides the rise in online savings account rates, one other encouraging sign in an otherwise uninspiring rate environment was that the spread in rates across the top 10 got narrower. In the last quarter of 2013, 0.136 percent separated the top rate from the 10th-place rate. In the first quarter of 2014, that spread narrowed to 0.108 percent, even though the top rate held firm. Not only does a narrower spread give consumers more choices near the very top of the rate spectrum, but tighter competition could spur some banks to raise rates to get an edge.

Trends in money market rates

Rates on both traditional and online money market accounts fell during the first quarter of 2014, though here again online accounts enjoy a significant advantage over their traditional counterparts. Online money market accounts had an average APY of 0.572 percent during the first quarter, more than five times the average traditional money market account rate of 0.109 percent. The overall average money market rate was 0.158 percent.

Bank

Money market account rate

1st place

Doral Bank (ABR platinum medal winner)

0.940 percent

2nd place

Sallie Mae Bank (ABR gold medal winner)

0.900 percent

3rd place (tie)

Ally Bank (ABR silver medal winner)

0.850 percent

3rd place (tie)

GE Capital Retail Bank (ABR silver medal winner)

0.850 percent

3rd place (tie)

Mutual of Omaha Bank (ABR silver medal winner)

0.850 percent

6th place

Discover Bank (ABR bronze medal winner)

0.700 percent

7th place

Nationwide Bank

0.695 percent

8th place

EverBank

0.610 percent

9th place

OneWest Bank

0.500 percent

10th place

Zions Bank

0.450 percent

As with the savings account category, Doral Bank was a repeat winner among money market accounts. The rest of the top 10 were also the same as the prior quarter's top 10 money market accounts, though some of the positions changed.

The consistency of these banks, with the top 10 in both the savings account and money market account categories repeating from last quarter, should suggest to consumers that it is well worth shopping for higher rates, as banks offering a rate advantage today are appearing to do so consistently.

The low-rate landscape

The interest rate environment in the first quarter was almost entirely a continuation of the conditions that have led to ultra-low rates in recent years. Uncertainty about the economy continues to keep demand for capital in check. Low inflation, which is another symptom of economic weakness, also helps encourage low interest rates.

Additionally, Federal Reserve policy has reinforced the low-interest-rate trend. Although the Fed has begun to taper its quantitative easing program, those bond purchases primarily affect long-term interest rates. The Fed has reiterated its commitment to keeping short-term rates low for as long as the economy is struggling, and these short-term rates have a greater influence on savings and money market rates.

In order for deposit rates to rise, it will take not just sporadic flashes of growth, but sustained economic progress. Until that happens, your best bet for higher rates is to shop around.

Methodology

To calculate these averages, MoneyRates.com tracks an index of 100 banks, including the top 50 retail banks by deposit size, plus 50 smaller banks. To emphasize consistency, MoneyRates.com tracks savings and money market rates throughout the quarter and calculates the average rates paid over the course of that period.

Archive of America's Best Rates Surveys

MoneyRates Featured Savings Rates
 Account Type
 Amount

Type: Savings

Minimum to earn APY $0

0.95%APY

Rates as of 7/26/2014
FDIC Insured

Advertiser Comments

  • Member FDIC
  • ID Theft Resolution Services
  • Synchrony Bank was formerly GE Capital Retail Bank

Type: Savings

Minimum to earn APY $0

0.90%APY

Rates as of 7/26/2014
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 7/26/2014
FDIC Insured

Advertiser Comments

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

Type: Savings

Minimum to earn APY $25000

0.95%APY

Rates as of 7/26/2014
FDIC Insured

Advertiser Comments

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

Type: Savings

Minimum to earn APY $1500

1.01%APY

Rates as of 7/26/2014
FDIC Insured

Advertiser Comments

  • 1.40% Bonus Rate for the first 6 months up to $50k (2)
  • 1.01% First-year APY up to $50K (2)
  • Earn a top 5% yield - Always (1)

Type: Savings

Minimum to earn APY $0

0.75%APY

Rates as of 7/26/2014
FDIC Insured

Advertiser Comments

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

Type: Savings

Minimum to earn APY $0

0.90%APY

Rates as of 7/26/2014
FDIC Insured

Advertiser Comments

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

Type: Savings

Minimum to earn APY $5000

0.85%APY

Rates as of 7/26/2014
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.

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