The best savings accounts with high rates are hard to find, or are they? While most banks don't seem to be doing much for their customers lately, there are some industry leaders that are slugging it out to compete for your business by keeping savings and money market rates competitive. These are banks that are defying the overall industry trend by offering higher deposit rates to attract new customers.
MoneyRates compiles periodic lists of which banks offered the highest rates over the past quarter for its America's Best Rates survey. Based on the results from these lists over the past year, MoneyRates has compiled rankings of the best savings accounts and money market accounts for 2016.
The thinking is straightforward: high rates are nice, but savings and money market rates are subject to change at any time. By tracking which banks offered the best rates on average over the course of a full year, MoneyRates can give you an idea of which banks are most likely to continue to offer high rates throughout 2016.
Top 10 Best Savings Account Rates
The following are the 10 banks that have consistently offered the best savings account rates over the past year:
1. Synchrony Bank
Average APY: 1.036%
It says something about the rate environment that a bank can stand out simply by offering savings account interest over 1 percent. With the average savings account rate at 0.1665 percent during 2015, Synchrony's average of 1.036 percent offered customers more than 6 times what the average account would pay. Formerly known as GE Capital Retail Bank, Synchrony meets the test for consistency by ranking No. 1 in the MoneyRates savings account survey in each of the past three quarters.
2. Barclays Bank
Average APY: 1%
Barclays joins Synchrony as the only two banks in the survey to offer average savings account rates of 1 percent or better last year. Barclays ranked either second or third in each of the last four quarterly surveys, and offered a rate of exactly 1 percent throughout the entire year. The bank does not charge monthly maintenance fees for its online savings account and there is no minimum opening balance.
3. Ally Bank
Average APY: 0.992%
This prominent online bank offered an average savings account rate of 0.992 percent throughout last year, and bumped that up to 1 percent in the fourth quarter. Like other online banks, Ally does not have monthly maintenance fees or charges for e-statements.
4. CIT Bank
Average APY: 0.99%
With an average savings account rate last year of 0.990 percent, CIT Bank was just barely edged out of third. Look for it to give the leaders a run for their money in 2016 because they bumped their rate up over the 1 percent mark later in the year. CIT Bank offers a high yield online savings account for a minimum deposit of $100. However, there are no fees to open an account or maintain it once it is opened.
5. Discover Bank
Average APY: 0.926%
This is another leading bank that raised its savings account rate as the year went along, resulting in an average over four quarters of 0.926 percent. For a minimum opening balance of $500, Discover offers high interest rates with no minimum balance requirements.
6. American Express National Bank
Average APY: 0.897%
The full-year average for American Express National Bank was 0.897 percent, though it did offer a full 90 basis points in each of the last three quarters. There are no minimum balance requirements or maintenance charges with this bank.
7. Sallie Mae Bank
Average APY: 0.80%
A consistently competitive bank, Sallie Mae offered 0.80 percent throughout each of the last four quarters. While people may associate Sallie Mae with student loans, it also features an online savings account that gives customers a chance to earn rewards while banking.
8. FNBO Direct
Average APY: 0.75%
After offering a 0.750 percent savings account rate throughout the first three quarters of 2015, FNBO upped its rate to 0.765 percent in the fourth quarter. Open an account with just $1 with FNBO with a chance to earn these high rates.
9. Capital One 360
Average APY: 0.75%
By offering a consistent 0.750 percent throughout each quarter, Capital One 360 averaged that amount for the year to rank ninth. Capital One 360 does not require a minimum balance to open or waive a monthly fee. You can also take advantage of savings tools like its Automated Savings Plan to continue to meet your financial goals.
Average APY: 0.61%
This was the only other bank in the survey to offer average savings account rates of better than 0.50 percent last year, so there is quite a drop-off after EverBank's average of 0.610 percent. Use EverBank's mobile app to take control of your banking by monitoring balances or depositing checks on the go.
You may notice that almost all of the top-ranked banks on the list are online banks, which typically offer high rates as they do not have costs associated with brick-and-mortar banks. Look at your savings account options for both brick-and-mortar and online banks to get the best savings account promotions and rates.
Top 10 Best Money Market Rates
In theory, money market accounts are supposed to offer slightly better yields than savings accounts, but that is not necessarily true in the current rate environment. The average money market rate of 0.1668 percent last year is virtually identical to the average savings account rate, and the top money market accounts were actually beaten out by the top savings accounts. Still here are 10 very competitive options:
1. Sallie Mae Bank
Average APY: 0.913%
This is an example of money market rates being higher than savings account rates, with Sallie Mae's average money market rate of 0.913 percent being 0.113 percent higher than its savings account average.
2. Santander Bank
Average APY: 0.90%
Santander was consistently good, offering 0.90 percent throughout the entire year.
3. Ally Bank, Mutual of Omaha Bank and Synchrony Bank (tie)
Average APY: 0.85%
All Online Accounts
There is a log jam at third place, with three banks offering average money market rates of 0.850 percent.
Like the other banks tied for third, Mutual of Omaha Bank offered 0.850 percent in each of the last four quarters. In addition to leading the savings account category, Synchrony Bank completes the three-way tie at 0.850 percent in the money market category.
6. Discover Bank
Average APY: 0.751%
This is one of several banks to make the top ten in both the savings and the money market categories. Discover's average money market rate for the year was 0.751 percent.
7. Nationwide Bank
Average APY: 0.633%
An average money market rate of 0.633 was good enough to land Nationwide the seventh spot on this list, but with one caution - they lowered their rate as the year went along.
Average APY: 0.61%
As with their savings accounts, EverBank's money market accounts offered a rate of 0.610 percent through each of the last four quarters.
9. OneWest Bank
Average APY: 0.50%
Money market rates at OneWest were steady at 0.50 percent through all four quarters.
10. Zions Bank
Average APY: 0.45%
Coming in with an average rate of 0.45, Zions cracked the top 10 but is indicative of how quickly rates drop off once you get past the top few banks.
Why Shop Around for the Highest Bank Rates
While a savings rate of 1 percent doesn't sound like much, it is much higher than average interest rates. The national average rate for regular savings accounts and jumbo savings accounts is 0.06 percent, according to the FDIC's latest update. The difference between the interest earned between average savings rates and some of the highest savings rates in a year is huge.
For example, say you want to deposit $100,000 and want to earn the most interest. Using a compound interest calculator to calculate the interest earned on a $100,000 deposit, you find you can earn just $60 when you have the average savings rate of 0.06 percent. However, you can earn $1,004 when you have a savings interest rate of 1 percent. You may be missing out on $944 by settling with a bank with average savings interest rates.
Bank Analysis and the MoneyRates Index
This study is based on the MoneyRates Index, a cross-section of nearly 100 banks. Approximately half the sample is made up of some of the largest deposit institutions in the United States. The remainder of the MoneyRates Index is composed in roughly equal proportions of small and mid-sized banks.
MoneyRates defines bank size as the following:
- Large bank: $10 billion and up in deposits
- Medium-sized bank: $5 billion to $10 billion
- Small bank: Less than $5 billion
To reflect the consistency with which a bank offers high rates, deposit rates are tracked throughout each calendar quarter rather than at a single point in time.
Since savings and money market rates are subject to change at any time, and not all banks are included in the MoneyRates Index, you can view the above lists as good starting points in your search for competitive savings and money market accounts. Compare other banks to see if any can meet the standards set by these leaders.
And may the best bank win your business!