Dedicated to Deposits: Deals, Data, and Discussion
DETAILSINSTITUTIONAPYMINMAXPRODUCT
Barclays0.90%--Online Savings
Accounts mentioned in this post. Rates as of July 28, 2014

Barclays Online Savings Account Rate Falls After More Than a Year at 1.00%

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Barclays

After more than a year of a 1.00% APY, Barclays cut its online savings account yield to 0.90% APY on Thursday. As I described last month, Barclays started offering its online savings account and online CDs in March 2012. The savings account yield held for more than a year, but like many other internet banks in this low interest rate environment, Barclays wasn’t able to maintain this rate.

In addition to the Fed policies, deposit growth and competition are likely factors that affected Barclays’ decision. Last November, Barclays reported that it had exceeded its deposit goals with a billion dollars in deposits. Although I wasn’t able to get more details on Barclays’ deposit growth last month, it appears deposit growth was still exceeding expectations. That’s rarely good news for depositors. Also, with few internet banks offering 1.00% savings account rates, there’s no big need for Barclays to keep the 1.00% APY. In fact, the new 0.90% APY is still competitive. It’s higher than the savings account rates from all of the big internet banks such as Ally Bank, Capital One 360 and Discover Bank.

There are now only four banks offering non-promo rates higher than 0.90%. These accounts are available nationwide, and there are no checking requirements. I excluded banks with small balance caps on their savings or money market accounts (like SmartyPig and Evantage Bank).

Rates as of 5/17/2013

One question you may be asking is how long will 0.90% hold up? Will rate cuts continue to be rare at Barclays? If that’s the case, the 0.90% should hold for the rest of the year. That’s probably the best case that we can hope for.

If there are more rate cuts to come in the near future, it may mirror what we have seen at TIAA Direct. TIAA Direct’s 1.25% APY held from its launch through 2012. Then the rate started to fall in January with additional cuts in March and April. The rate is now down to 0.76%.

The worst case scenario for rate cuts is what we’ve seen at UFB Direct and CNB Direct. High rates held steady for quite a while before we saw a quick fall. Then all of a sudden, the rates plummeted to levels that are very low for internet banks.

In my opinion, Barclays will probably follow the first scenario in which rate cuts will be rare. However, if we see more cuts in the next few months, we’ll know they probably don’t have intentions to remain rate leaders. As we have learned over these years, you can’t be attached to any one bank or credit union. Rate leaders rarely last for more than a year. If you want the best savings or money market rates, you should plan to be moving your money at least once a year.

Edit: Removed Citizens State Bank MMA


  Tags: Barclays, savings account

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Comments
9 Comments.
Comment #1 by Anonymous posted on
Anonymous
Nobody is immune form Bernanke's printing presses. The savers are being slaughtered, left and right.

16
Comment #2 by CapitalClimate (anonymous) posted on
CapitalClimate
Citizens State Bank says on their account application page that personal MMA is "only available in branch".

4
Comment #3 by ytytytyt posted on
ytytytyt
.

.

Dear #1,

Err ... so how edible is the meat?  :-) 

Is it any good for humans ... or ... Are the slaughtered savers only good for chicken feed?  :-)

Yours Truly,
- Anon
In FED I Trust :-)

.

3
Comment #4 by KenBDG posted on
KenBDG
@CapitalClimate: Thanks for noting this. I removed Citizens State Bank from the list

2
Comment #5 by really posted on
really
yt yt yt i bbet it  is kobe or wagyu

1
Comment #6 by Anonymous posted on
Anonymous
Ugh, so frustrating!!!  I opened an account with Barclay's 2 months ago because Ally cut its rate.  This keeps happening to me!  Rate goes down within a year of my opening the account.  I seem to curse every bank account I open!  Time to look for another account AGAIN.

5
Comment #7 by Shorebreak posted on
Shorebreak
Re: Anonymous - #6, Friday, May 17, 2013 - 2:33 PM

Kindly advise us which financial institution you intend to utilize next, prior to opening an account with them. Thank you very much.

8
Comment #9 by really posted on
really
HAY YT YT YT BOND ARE ATTRACTIVE?? BSCK 2.59 BWX 2.24 TLO 2.60 YOU ARE JOKING RIGHT   MY BONDS RANGE FROM 4.5 TO 6 PERCENT WITH SOME OF THEM BEING MUNIS BUENA SUERTE  

2
Comment #10 by Anonymous posted on
Anonymous
All this non-sense over a 0.1 percent drop in a rate that is already so low, one wonderes how you get people to even want to read about this. 

7