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High-interest savings accounts

min read

interest_savings_accountsHigh-interest savings accounts are making a comeback. The MoneyRates.com America's Best Rates survey recently identified the largest 12-month increase in average savings account rates in the survey's history. The average rate for online savings accounts moved above 1 percent for the first time, while the top rate overall is now above 2 percent.


MoneyRates.com conducts the America's Best Rates survey on a quarterly basis to monitor savings account and money market account rate trends.

The survey is "... based on a sample of 100 banks designed to represent all aspects of the retail deposit market, with 50 large banks, 25 medium-sized banks and 25 small banks. Rates listed are based on the average rate each institution offered during the quarter rather than on just one snapshot in time. This helps us identify banks that consistently compete for your business."

Still, as important as rates are, other factors often play a role when choosing a bank for the long term. For example, growing numbers of consumers choose to do their banking online, yet some still prefer to work with a traditional, branch-based bank. You may also find that the breadth of services of a large bank best suits your needs, whereas someone else may prefer the personal touch of a small bank. Another person might aim down the middle and go with a medium-sized bank.

Recognizing all these preferences, MoneyRates.com took the ABR survey results a step further to highlight banks that offered the best rates when averaged over the entire quarter according to the following categories (all banks are FDIC-insured):

  • Online accounts
  • Traditional accounts
  • Large banks
  • Medium-sized banks
  • Small banks

Best online savings account rate

Platinum Medal  Salem five 

Online savings accounts generally offer much higher rates than their traditional, branch-based counterparts. It is no surprise, then, that the best online savings account rate was also the best savings account rate overall during the third quarter of 2018.

Winner: Salem Five Direct eOne Savings (ABR platinum medal winner)

Average savings account rate, 3rd quarter 2018: 2.05 percent

Location of headquarters: Salem, MA

Number of locations: 37

States available: Available online in all states

Total bank deposits: $3.4 billion (this is considered a small bank)

Minimum deposit to open: $100

Highlights: The 2.05 percent interest rate offered by this account is significantly better than the overall average savings account rate of 0.377 percent, and nearly twice as high as the average savings account rate of 1.069 percent. The Salem Five Direct eOne Savings account is available only to those who apply online and are not already customers of the Salem Five Bank. There is a $1,000,000 maximum balance to which the 2.05 percent rate may apply.


Best branch-based, high-yield savings account rate

In order to find a good, branch-based account that would be available to a large number of consumers, MoneyRates.com searched for the highest-yielding account available from a bank with at least 100 branches.

arvest  

Winner: Arvest Bank Savings Account

Average savings account rate, 3rd quarter 2018: 0.30 percent

Location of headquarters: Fayetteville, AR

Number of locations: 298

States available: 4 (Arkansas, Kansas, Missouri and Oklahoma)

Total bank deposits: $14.4 billion (this is considered a medium-sized bank)

Minimum deposit to open: $100

Highlights: While 0.30 percent is a long way below savings account rates for online accounts, it is a significant improvement over the average branch-based savings account rate of 0.10 percent. Therefore, for people who prefer to do their banking in person, a rate of 0.30 percent would be a very competitive option. Arvest also offers a 0.50 percent savings account rate for customers who have a qualifying checking account with the bank.


Best high-yield savings account rate: large banks

MoneyRates.com classifies large banks as those with at least $15 billion in deposits. This classification includes the 50 largest retail deposit institutions in the United States. In general, large banks offer slightly better savings account rates than the industry as a whole, with an average of 0.395 percent compared to an overall average of 0.377 percent. One reason for this is that many online accounts fall into the large bank categories, and online banks generally have a significant rate advantage.

Platinum Medal   Salem five

Winner: Marcus by Goldman Sachs Online Savings (ABR gold medal winner)

Average savings account rate, 3rd quarter 2018: 1.83 percent

Location of headquarters: New York, NY

Number of locations: 5

States available: Available online in all states

Total bank deposits: $115.7 billion

Minimum deposit to open: $1

Highlights: Marcus is the retail brand of Goldman Sachs Bank. The Marcus Online Savings account recently raised its rate to 1.95 percent, so the rate currently available is even higher than the 3rd-quarter average shown above.


Best high-yield savings account rate: medium-sized banks

MoneyRates.com classifies medium-sized banks as those with between $5 billion and $15 billion in deposits. Interestingly, this category significantly underperforms both larger and smaller banks when it comes to savings account rates. Medium-sized banks in the MoneyRates.com survey offer an average savings account rate of just 0.147 percent, compared to 0.377 for savings banks overall.

axos 

Winner: Axos Bank (formerly Bank of Internet)

Average savings account rate, 3rd quarter 2018: 1.30 percent

Location of headquarters: San Diego, CA

Number of locations: 2

States available: Available online in all states

Total bank deposits: $7.4 billion

Minimum deposit to open: $0

Highlights: Axos Bank recently changed its name from Bank of Internet. As the original name suggests, the bank specializes in online banking, and this online emphasis is likely the biggest reason why the rate on this savings account exceeds the medium-bank average by more than a full percentage point.


Best high-yield savings account rate: small banks

MoneyRates.com classifies small banks as those with less than $5 billion in deposits. This category's savings accounts tend to perform pretty well, with an average rate of 0.588 percent compared to an average rate of 0.377 percent for savings accounts overall.

Silver Salem five 

Winner: Salem Five Direct eOne Savings

Since this account has already been described above in the category of best online savings account, we will profile a different bank's savings account for honorable mention to offer an additional choice of a small bank's account with a high savings account rate.

Honorable mention: SFGI Direct (ABR silver medal winner)

Average savings account rate, 3rd quarter 2018: 1.83 percent

Location of headquarters: Moorefield, WV

Number of locations: 32

States available: Available online in all states

Total bank deposits: $1.6 billion

Highlights: SFGI Direct is the online division of Summit Community Bank. While Summit has 32 physical locations, this high-yield savings account is available exclusively online. With a recent rate increase, the current annual percentage yield of 1.91 percent is now higher than the 3rd quarter average of 1.83 percent.


After years of flat-lining near zero, savings account rates are finally rising, and the pace of increase is accelerating. You might find equally competitive rates from different banks, but the banks listed above should give you a benchmark for each category so you know what kind of rates are among the leaders today.

The selections above were based on the MoneyRates Index, which is designed to represent a cross-section of the deposit industry. Rates shown represent an average of rates offered during the most recent calendar quarter. Rates are subject to change at any time, so you should check account details before signing up with any bank.

1 Comment
Sheena_MoneyRates 22 September 2015 at 7:04 pm

Hi everyone,This is Sheena Leano, your MoneyRates editor -- let us know when you find a great rate for your savings (or other account) or have a bank experience you'd like to share with your fellow savers! We love to hear your feedback! If you have any questions, feel free to post them here and we'll try to point you to the right answer.Thanks for reading, Sheena