5.25% No-Minimum Savings Account (New York CU)

If Citibank's 4.75% no-minimum savings account sounds good, how about 5.25%? The yield on RateEdge.com's no-minimum online savings account reached 5.25% APY today. RateEdge.com has consistently maintained a yield higher than the online savings accounts offered by the banks. Unfortunately, RateEdge.com is a division of Sunmark FCU which has a field of membership (FOM) that's primarily limited to those who live in areas of New York State.

One note regarding their FOM, you can also be eligible even if you don't live in this area of New York State. If an immediate family member lives, works, worships, owns a business, volunteers or attends school in this area, you are eligible. Your family member doesn't have to already be a RateEdge member.

As you can see below, RateEdge has consistently maintained a high yield on their savings account. Since I began tracking them in November, they've maintained an APY 25 basis points above the intended federal funds rate. RateEdge has also had the lead over EmigrantDirect and HSBC except during HSBC's 4.80% promotion (for most of the promotion RateEdge was only behind by 0.05%).

RateEdge       RateEdge   Fed Funds  Emigrant     HSBC
Rate Change    APY        Rate       Direct APY   APY
May 16         5.25%      5.00%      4.50%        4.50%
Apr 05         5.00%      4.75%      4.50%        4.80%
Feb 09         4.75%      4.50%      4.25%        4.80%
Jan 07         4.50%      4.25%      4.00%        4.25%
Nov 14         4.25%      4.00%      4.00%        4.00%

RateEdge doesn't exactly have a no-minimum savings account since it requires a balance of $5. For practical purposes, I consider this as a no-minimum account. According to their FAQ, the savings account seems to have a nice ACH transfer system that allows you to link not only to checking accounts but also money market accounts and brokerage accounts. There are some fees that you should be aware of such as a fee when you go over 2 outbound ACH transfers.

As I mentioned in last month's post when RateEdge reached 5%, I wish more credit unions would follow the lead of Sunmark FCU and set up an online division to focus on high-yield online savings accounts. Brick-and-mortar credit unions have consistently offered better rates than B&M banks. As RateEdge has shown, this can also be true with online divisions. I've emailed my credit unions about RateEdge and asked them to consider setting up a similar division. More credit unions will likely offer this if more people request it.