Update 3/03/10: The rate has fallen from 1.45% to 1.35% APY. Refer to the bottom of the post for the rate history.
Savings Square raised its online savings account yield from 3.05% to 3.60% APY. I first reported on Savings Square in May 2007 when it was offering a 5.10% APY. Its rates have remained fairly competitive as can be seen in the rate history of my Savings Square account review.
The minimum to open the account is $1, and there are no monthly maintenance fees and no minimum balance requirements. A reader mentioned in my account review post some downsides of this account from his experience:
I just went thru the very slow opening process and was disappointed as to the time it took and the fact that one can only transfer $2000/day and $5000/mo. from an external linked account even though the girl told me otherwise when I called. Hardly seems worth it if you have a lot of money to transfer.
When I contacted the bank's customer service before I posted on the account review, I was told that you should be able to initiate ACH deposits and withdrawals from your outside banks, so this may be a way to get around these low limits on ACH transfers.
With rates trending down, it makes you wonder why Savings Square made this big rate bump. Savings Square is a product of Kirkpatrick Bank of Edmond, Oklahoma. Kirkpatrick Bank has some decent financial ratings for soundness: 4 stars (excellent) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both ratings are based on 6/30/08 data. I've found this November news article describing problems Kirkpatrick Bank is having with developer real estate loans. As I recommend with any bank, it's best to keep under the FDIC limits. Kirkpatrick Bank has been FDIC insured since 1970 (FDIC Certificate # 20156). Note, Kirkpatrick Bank's website has a reference to Savings Square at this page.
3/03/10: 1.45% to 1.35% APY.
9/19/09: 1.70% to 1.55% APY.
8/08/09: 1.90% to 1.70% APY.
7/04/09: 2.00% to 1.90% APY.
6/01/09: 2.10% to 2.00% APY.
2/05/09: 3.30% to 2.90% APY.