The past year has seen an important trend in deposit accounts, as a handful of banks have shown themselves to be intent on breaking away from the pack by offering sharply higher than average interest rates. This means consumers enter 2018 with an opportunity to earn more interest on their savings accounts and money market accounts than in recent years - but only if they are selective enough to choose one of the right banks.
Trends in Savings Accounts
Banks offering decent interest rates are still very much in the minority, so it is important to choose carefully. To help you out, MoneyRates.com has identified 10 of the best savings and money market accounts for 2018. This is based on the average rates these banks have offered over the most recent four quarters, but with recent quarters weighted more heavily because those rates are more reflective of what you would get if you opened an account today.
One significant point about each of these lists: They are dominated by online accounts. In fact, while there was a time when MoneyRates.com might have broken out separate lists highlighting the best online savings and money market accounts, now the dominance of online rates is such that those lists would be almost completely redundant with the lists of the overall winners.
In some cases, the banks on the following lists may have a limited number of physical branches, but generally speaking, the banks with extensive branch networks are not the ones offering competitive rates. For consumers, this means getting a competitive savings or money market rate has largely become a choice of whether to make the leap to online banking.
If you are still banking at a local branch, check out some of the rates mentioned below as you consider your banking moves for 2018. Then decide whether continuing to visit a branch is worth missing out on these higher rates.
Best Savings Accounts for 2019
Here are the MoneyRates.com picks for 2018's best savings accounts:
1. Salem Five Direct
This is a relatively small bank based in New England but offering online accounts on a national basis. Salem Five was the clear winner in this study because it had the top savings account rate in each of the last four America's Best Rates surveys. Over the past year, it offered an average rate of 1.168 percent, and better yet, the rate rose to 1.30 percent in the most recent survey. Salem Five Direct will be an interesting case study for how effective it is to offer top deposit rates as a marketing tactic. Currently with less than $4 billion in deposits, Salem Five would be considered a fairly small bank, but its online presence and highly-competitive rates give it the potential for strong growth.
2. CIT Bank
While CIT did not have the second-highest average savings account rate over the past year (it would have been tied for fourth on that basis) it gets the nod for second place because it ended strongly, with a rate of 1.28 percent in the most recent quarter. This makes it an especially attractive option for anyone shopping for a savings account now. Having raised its savings account rate from 0.95 percent to 1.28 percent over the past four quarters, CIT seems intent on being in the thick of the race to raise interest rates.
3. SFGI Direct (tie)
This bank offered the second-highest average rate over the past year at 1.105 percent, and made a strong move in the right direction in the most recent quarter, raising its average rate from 1.08 to 1.22 percent. That placed it third in the most recent America's Best Rates Survey and third overall in this study. With its online capabilities, that makes it an option well worth considering for anyone shopping for higher rates.
4. Goldman Sachs Bank USA (GS Bank) (tie)
This division of Goldman Sachs offering online savings accounts is another bank that clearly wants to be part of the rates race. It offered the fourth highest average rate over the past year at 1.098 percent, and by raising its rate from 1.09 to 1.20 percent in the most recent quarter, it is peaking at the right time.
5. Synchrony Bank
Though it has only a handful of physical locations, Synchrony Bank has built itself up to over $50 billion in deposits in part by offering competitive rates and online banking. While its weighted average over the past year ranks it fifth in this study, its rate in the most recent quarter ranked fourth so it may be a competitor to watch in 2018.
6. Barclays Bank
This is another bank that gave its savings account rates a strong boost recently, raising its average from 1.04 to 1.19 percent in the most recent quarter. That makes it a good bank for rate shoppers now to check out and see where that momentum takes them in 2018.
7. Ally Bank
Ally has been one of the leaders in promoting online banking, and it continues to offer consistently competitive rates. It averaged 1.048 percent over the past year, but it upped to 1.16 percent in the most recent quarter.
8. Radius Bank
With slightly under a billion in deposits, this is easily the smallest bank on this list, but with its online presence and competitive rates, it seems intent on making a big impact. Radius had a top 10 savings account rate in each of the last four America's Best Rates surveys, so it has been consistent about offering consumers a more rewarding option.
9. Discover Bank
This arm of the credit card company has amassed over $50 billion in deposits, and by boosting their average rate from just under 1 percent to 1.12 percent in the most recent quarter, they have positioned themselves to continue to attract customers.
10. FNBO Direct
The initials stand for "First National Bank of Omaha," and while that might sound like a regional bank, it is an example of how an online presence combined with competitive rates can start to break down geographic barriers to offer more options to consumers.
Best Money Market Accounts for 2019
Money market accounts offer similar liquidity and stability to savings accounts, but under some circumstances, they can offer better rates. That has not been the case lately, but even though the category overall trails that of savings accounts, the very highest rates are right there with the top savings account rates.
Here are the money market accounts that seem on track to offer 10 of the best options for 2018:
1. Able Banking
This is an example of a small bank trying to make a mark by offering highly-competitive online banking. Able is the clear winner in the money market account category, having offered the top rate in each of the past four quarters, and closing with a bang by raising its average rate from 1.11 to 1.30 percent in the most recent quarter.
2. Sallie Mae Bank
Having raised its money market rate from 0.90 percent to 1.28 percent over the past year, Sallie Mae looks poised to give Able Banking a run for its money in 2018.
3. Capital One 360
Though the company is probably best known for its credit cards, Capital One offers an online money market account with a constantly top rate.
4. BBVA Compass
This bank's money market rate made a huge positive move over the past year, jumping from 0.65 percent to 1.24 percent. That trajectory definitely makes it a bank for rate shoppers to check out in 2018.
5. Discover Bank
This and the next two banks were the only three to make the top 10 for both savings accounts and money market accounts to consider in 2018. Discover had the highest-ranked money market account of the three, with an average rate of 0.853 percent over the past year and 0.96 percent in the latest quarter.
6. Ally Bank
Like Discover, Ally had an average money market rate of 0.853 percent over the past year, though it did not close quite as well with a rate of 0.86 percent in the latest quarter.
7. Synchrony Bank
Closing out the trio of banks that made the top lists for both savings and money market accounts, Synchrony was a model of consistency with an average rate of 0.85 percent in each of the last four quarters.
8. First Internet Bank
This bank's money market rate made the top 10 in each of the past four quarters, and made a move in the right direction by rising 10 basis points in the latest quarter to 0.90 percent.
9. Mutual of Omaha Bank
The money market offering from this bank made a big move over the past year to get itself into the race, with its rate more than doubling to reach 0.77 percent in the most recent quarter.
A consistent top 10 money market account, EverBank's offering made a strong move recently by raising its rate by 24 basis points to 0.85 percent in the most recent quarter.
Rates at the top of these lists represent a clear improvement over the best rates available this time last year. Now it's up to you whether you want to profit from that improvement by signing up with one of these banks.