SmartyPig announced on its blog that the yield will fall from 2.15% APY to 1.75% APY for balances up to $50K effective September 7, 2010. The yield remains the same for balances over $50K (0.50% on the entire balance).
According to SmartyPig's FAQ, the APY is determined by SmartyPig's bank partner, BBVA Compass. Currently, BBVA Compass has low rates on many of its deposit products. For example, it's only paying 1.95% APY on 5-year CDs (in Texas). So that may not be a good sign for the future.
However, SmartyPig has been offering top savings account rates since April 2008 (SmartyPig rate history). It's not a typical savings account. In addition to paying top interest rates, it rewards customers with discounted gift cards to its retail partners. According to the NYT Bucks Blog, these retail gift cards are the main way SmartyPig makes money. So hopefully, this will allow them to remain one of the rate leaders.
With SmartyPig's fall, this will leave only three banks with nationwide liquid accounts (non reward checking) with yields of 2.00% APY or above. As of 9/03/2010, these include:
- EverBank's Money Market & Checking - 2.25% 3 month promo (there's also a $75 bonus, see review)
- AmericaNet Bank's Mega Money Market - 2.00% APY up to $35K (sister bank to Evantage Bank, see review)
- Evantage Bank's Mega Money Market - 2.00% APY up to $35K (sister bank to AmericaNet Bank, see review)
Is it worth rate chasing? I discussed the issue in this post.