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Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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Money Market Rate Leaders with Some History

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There are currently 10 banks offering nationally available savings or money market accounts with a yield of at least 1.00%. I last reviewed these in my weekly summary. Many of these are promotional rates that will fall after the promotional period. Others are new internet banks which launched their savings accounts this year. So they don't have much history. Only 2 out of the 10 have been offering top rates for over a year. These are MyBankingDirect and Incredible Bank. I thought it would be useful to compare these two accounts and see how their rates have changed over the last year.

Alliant Credit Union Savings Account & June's Rate Cut

There's another savings account with a yield just under 1.00% that has a long history. That's Alliant Credit Union's savings account. I thought it would be useful to include this in the comparison. But I have some bad news about this savings account. I called Alliant today to find out if the board has approved June rates. They have approved the new rates, and unfortunately, the savings account yield will fall from 0.95% to 0.80% effective June 1st. The High Rate Checking yield will also fall. The new yield will be 0.75%, down from 0.90%.

I wanted to include Alliant's savings account since it has a long history of top rates. This is a good example that a long history of top rates doesn't guarantee that the top rates will continue.

Another reason I wanted to include Alliant Credit Union is due to its online banking which has features that are much better than most internet banks. I have more details on these features in my Alliant account review.

MyBankingDirect Money Market Account

MyBankingDirect is an internet division of New York Community Bank. I had first reported on MyBankingDirect way back in 2005. It has only been in the last year or two that it has been a rate leader. My last review of its money market account was in June 2011 when the yield was 1.25%. There has only been one rate drop since that time. The yield is now 1.15% for balances of at least $5,000 which is second only to TIAA Direct.

I called MyBankingDirect to see it I could get any clues about future rates, but I didn't have any luck. I was just told the rate is subject to change at anytime.

MyBankingDirect's online banking is a downside. There haven't been any improvements since my June 2011 review. The bank uses MoneyHQ for its bank-to-bank ACH transfer services. This has a cost of $4.95 per month. If you open this account, you'll want to use another bank's ACH service to transfer money into and out of your MyBankingDirect account. A reader provided additional downsides in his bank review.

Incredible Bank Money Market Account

Incredible Bank is an internet division of River Valley Bank. I first reported on Incredible Bank in November 2009 when it launched its internet checking account. Since that launch, the checking account yield has remained very competitive. It's currently 0.93% APY for balances up to $250,000.

Incredible Bank launched the money market account last year, and I first did a review of this account in May 2011. When it started, you needed a $100K balance for the top rate. However, that changed in August when the top rate was made available for balances of $2,500 to $250,000. The rate has fallen, but like the checking account, it remains very competitive. It's currently 1.00% APY for balances of $2,500 to $250,000.

One downside of the money market account is a potential monthly fee of $10 if the average collected balance falls below $2,500 during the statement cycle. Another downside with Incredible Bank is a low limit on bank-to-bank ACH transfers. There's a $50K/day inbound limit and a $10K/day outbound limit. To get around these low limits, you'll need to use another bank's ACH service to make deposits and withdrawals.

Comparing Rates for the Last Year

I've graphed the yields of Alliant's savings account, Incredible Bank's money market account and MyBankingDirect's money market account in the following chart. As you can see, MyBankingDirect's rate has declined the least over the last year. Incredible Bank had the most rate cuts, but they have been small. Alliant held its rate steady for all of 2011, but that has changed this year.

DepositAccounts.com money market rate comparison

Alliant Credit Union has a long history of offering top rates on its savings account. That's starting to change, and with the June rate cut that's scheduled, it's hard to say if it will remain competitive. MyBankingDirect and Incredible Bank do have some history of top rates, but as we have seen, there's no guarantee that they will remain on top. If you want the best savings account rate, you are probably going to have to switch banks at least once every year.

Finding the Best Savings, Money Market & Checking Account Rates

You can use our rate tables to search for the best rates available nationwide and in your state:


  Tags: Alliant Credit Union, My Banking Direct, Incredible Bank, money market accounts, savings account

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Comments
10 Comments.
Comment #1 by O-Qua Tangin Wann (anonymous) posted on
O-Qua Tangin Wann
Thank you very much, Ken, for calling Alliant Credit Union.

I think it is a fair assumption that all institutions still offering one percent or more will drop to below one percent eventually. 

~O-Qua Tangin Wann

2
Comment #2 by Anonymous posted on
Anonymous
I'll be staying....no .o5% chase for me.

1
Comment #3 by Anonymous posted on
Anonymous
To Anonymous #2:

Allilant's rate drop will NOT be just .05, if that's what you are referring to. The rate drop will actually be .15% on both the savings and checking accounts; much more significant as every little bit is important in this disgustingly low rate enironment.

2
Comment #4 by Anonymous posted on
Anonymous
No,

comparing to other cu or bank rates

3
Comment #5 by outtempster posted on
outtempster
this is too bad. I've been with Alliant CU a long time, and was lazy to switch banks. However, the new 0.8% compare to top rate 1.25%, it's almost half a percent difference. Depending on how much you have in your saving account, it may worth switching, especially Alliant CU has dropped rate at least twice in less than a year.

1
Comment #6 by Notgonnahappen (anonymous) posted on
Notgonnahappen
I agree with #1 here.  All liquid accounts in the USA will soon be under 1%, and probably quite a bit so.  The Fed will print, print, print until the cows come home, attempting to prop up equities.  Rates of anything over 2% for a long term CD will look like a great decision in about 5 years from now.  I keep wondering why we are following Japan's economic model (basically 0% for 21 years), but...umm, maybe its the DEBT?  And whos going to deal with that?

4
Comment #7 by Kaight posted on
Kaight
The future for rates will to some extent be a function of November's winner.  For the next five months I expect little change in rates.  In wake of the election, if current POTUS is victorious, I would predict low USA rates for the following four years at least.  Such an outcome might signal time to move your savings, and perhaps yourself as well, to Canada.  

5
Comment #8 by Anonymous posted on
Anonymous
Yields on deposit accounts are declining because the yield on bank's assets - what they earn by investing deposits in loans and securities - are declining.  The target Fed Funds rate has been at 0%-.25% since the end of 2008. As higher yielding loans and investments repay, funds are reinvested at much lower prevailing rates - auto loan rates are commonly under 3%, mortgages under 4%. And the typical bank has expenses equal to about 3% of assets. The internet banks have lower costs, so they can pay higher yields, but their assets are also repricing down. All deposit rates will go lower, and not begin to rise until after market interest rates rise.

6
Comment #9 by Anonymous posted on
Anonymous
There is no incentive for banks to offer higher interest rates.  And a side benefit for them, they don't have to send out IRS 1099 forms for the whopping $0.01 interest they are paying, since they are not required to send a form out for less than $10 annual interest.

1
Comment #10 by Anonymous posted on
Anonymous
Banks right now want you to borrow (pay them interest) not save (pay you interest).

3