|Bank or Credit Union||Apy||Min||Max||Product|
|Ally Bank||0.84%||-||-||Online Savings Account|
|Start SavingSponsored Note: No minimum deposit to open. No monthly maintenance fees. Member FDIC.|
|FNBO Direct||0.85%||-||$1m||Online Savings|
|Start SavingSponsored Note: Named Best Place to Park Your Emergency Cash by Money Magazine.|
|Discover Bank||0.80%||$500||-||Discover Bank Online Savings|
|Start SavingSponsored Note: Deposits are FDIC insured up to the maximum allowed by law Low $500 minimum opening deposit No minimum balance or monthly maintenance fees|
|American Express Bank, FSB||0.85%||-||-||High Yield Savings Account|
How Rates Have Held up at the Largest Internet Banks
I thought it would be interesting to review the recent rate history of the internet savings accounts from the largest banks. I only included the banks with at least $10 billion in deposits. They didn't have to be pure internet banks like ING Direct. However, I only included those which have maintained competitive online savings accounts. Thus, I didn't include some banks like Citibank or HSBC.
The best rates often don't come from these large banks. The larger banks tend to be a little more consistent with their rates. However, there have been cases in which large banks have given up on their online savings accounts. Two examples are ETrade Bank and M&T Bank.
A small advantage of having an account at one of these larger banks is that they're big enough to handle a nationwide customer base. Small banks can often become overwhelmed especially if they start to offer top rates.
Below is the short list with these largest banks sorted by deposit size. Rates are accurate as of 2/7/2011.
- Capital One Bank - Deposits: $124B - InterestPlus Online Savings Yield: 1.25% APY for $1K+ (was 1.45% a year ago). As I described in my last InterestPlus review, you can get a little better yield if you're a Costco member. There's also a quarterly bonus that can add a little to the yield. Capital One has almost 1,000 branches in the Northeast, Louisiana and in Texas. Note, deposit size includes deposits at both Capital One Banks (Capital One N.A. and Capital One Bank (USA), N.A.)
- ING Direct - Deposits: $77B - Orange Savings Account Yield: 1.10% APY on all balances (was 1.20% a year ago). ING Direct is the largest pure internet bank. The rates have never been the best. For those with large balances, the Electric Orange Checking account has better rates (up to 1.25% for $100K+)
- Discover Bank - Deposits: $35B - Online Savings Yield: 1.20% APY on all balances (was 1.35% a year ago). Discover put new emphasis in their internet bank last year when they launched a new online account center with better transfer capabilities.
- Ally Bank - Deposits: $34B - Online Savings Account Yield: 1.09% APY on all balances (was 1.49% a year ago). It seems like Ally has been advertising more than any of the other internet banks. The recent changes to their online banking has been disappointing, but I've heard we may see improvements soon.
- American Express Bank - Deposits: $15B - High Yield Savings Yield: 1.30% APY on all balances (was 1.50% a year ago). As I described in my last Amex savings account review, two features that have impressed readers are an easy account opening process and a fast ACH bank-to-bank transfer service.
- Zions Bank - Deposits: $14B - Internet Money Market Yield: 1.11% APY for $2.5K+ (was 1.25% a year ago). Like Capital One, Zions Bank has a large branch network. It has branches in Utah and Idaho.
- First National Bank of Omaha - Deposits: $10B - Online Savings Account Yield: 1.10% APY on all balances (was 1.40% a year ago). First National launched FNBO Direct and this online savings account in 2007. It became popular for its 6.00% promo, but it also become infamous for its employment history verification troubles. FNBO Direct has expanded to include an internet checking and a cashback credit card.
If you just want the best rates regardless of the size of the bank or credit union, please refer to our savings account rates table.