America's Best Rates Q3 2014: The benefits of banking online

Which would you prefer to receive: $50 or $10? If that seems like an obvious choice, you might want to ask whether your banking habits reflect your preference.

The latest America's Best Rates survey by MoneyRates.com indicates that online-based savings and money market accounts -- those that exist without a branch system for service -- typically offered about five times the interest of traditional, branch-based accounts in the third quarter. It also shows that customers who shop for best-in-class bank accounts can do especially well relative to the average account, as several of the surveyed accounts paid an annual percentage yield (APY) in the neighborhood of 0.90 percent.

America's Best Rates: savings accounts

Here are the 10 savings accounts that paid the highest average interest rate in the survey:


Savings account rate (APY)

1st place

Synchrony Bank (ABR platinum medal winner)

0.950 percent

2nd place

Doral Bank (ABR gold medal winner)

0.935 percent

3rd place

GE Capital Bank (ABR silver medal winner)

0.930 percent

4th place (tie)

Barclays Bank (ABR bronze medal winner)

0.900 percent

4th place (tie)

CIT Bank (ABR bronze medal winner)

0.900 percent

6th place

Ally Bank

0.878 percent

7th place (tie)

Capital One

0.850 percent

7th place (tie)

Discover Bank

0.850 percent

9th place (tie)

American Express National Bank

0.800 percent

9th place (tie)

Sallie Mae Bank

0.800 percent

All of the above interest rates represented a substantial improvement over the category average for savings accounts, which was just 0.180 percent. That overall average was unchanged from the previous quarter's survey.

Online accounts continued to offer significantly higher interest rates on average than traditional accounts. The average online saving account offered 0.533 percent during the third quarter, compared to just 0.096 percent for traditional savings accounts. On a $10,000 account, that would represent the difference between earning $53.30 in annual interest -- or $9.60.

To a lesser extent, there is also an advantage to be found in choosing by bank size. Banks in the medium-sized category -- those with between $5 billion and $10 billion in deposits -- paid an average of 0.277 percent, compared to 0.170 for large banks and 0.109 percent for small banks.

America's Best Rates: money market accounts

Here are the banks that paid the 10 highest money market accounts rates in the survey:


Money market account rate (APY)

1st place

Doral Bank (ABR platinum medal winner)

0.945 percent

2nd place (tie)

Sallie Mae Bank (ABR gold medal winner)

0.900 percent

2nd place (tie)

Santander Bank (ABR gold medal winner)

0.900 percent

4th place (tie)

Ally Bank (ABR silver medal winner)

0.850 percent

4th place (tie)

Mutual of Omaha Bank (ABR silver medal winner)

0.850 percent

4th place (tie)

Synchrony Bank (ABR silver medal winner)

0.850 percent

7th place

Discover Bank (ABR bronze medal winner)

0.700 percent

8th place

Nationwide Bank

0.670 percent

9th place


0.610 percent

10th place

OneWest Bank

0.500 percent

As with savings accounts, there was a considerable difference between these best-in-class money market accounts and the overall category average. As a group, money market accounts offered an average interest rate of just 0.169 percent. While still very low, that represents an improvement over the previous quarter's average of 0.162 percent. As a group, money market rates have now improved for three straight quarters.

Here again, there was a significant advantage for online-based accounts. These averaged 0.552 percent, compared with 0.117 for traditional money market accounts. Unlike with savings accounts though, there was no significant difference in rates depending on the size of the bank.

Trends in bank rates

Average rates for both savings and money market accounts have improved since the end of last year, but only slightly. Looking forward, there is a great deal of uncertainty swirling around interest rates. While Federal Reserve policy is considered to be in a transition away from its low-interest-rate stance of recent years, new concerns about the global economy might slow that transition in the future. In other words, it may yet be many months before bank rates begin to rise significantly.

Therefore, consumers who want higher rates cannot afford to wait around for the trend to change. They need to make it happen themselves by switching to one of the banks that is giving customers more for their money today.


The America's Best Rates survey is based on the MoneyRates Index of 100 banks, which includes the 50 largest retail deposit institutions in the U.S., as well as a sampling of medium-sized and smaller banks. Rates in the survey are based on averages offered throughout the quarter, rather than any single snapshot of rates.

    More from MoneyRates.com:

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      Currently Banking With:

      • Capital One
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      • Synchrony Bank
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      • CIT Bank
      • HSBC
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      • American Express National Bank
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      1 Comment
      Max Ryan 13 November 2014 at 4:01 am

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