Reviewing the Rate History of Savings Accounts
If you're looking for a savings account or checking account with the best interest rate, it's a good idea to review the account's rate history. A bank that has a history of keeping rates competitive will be more likely to keep rates competitive in the future. This hasn't always been the case, but it does improve your odds that you are not opening a savings account dud.
A reader asked about how to compare banks' rate histories in the recent post on factors to consider when opening an online savings account. One handy feature in our rate tables at DepositAccounts.com is the rate history. If you haven't been a heavy user of our rate tables, you might have missed this feature.
You can review an account rate history from the main tables. For example, in our savings account rates table, click on the plus-sign button that's to the left of the bank's name. This expands the row so you can review some of the account details. This includes the account's rate history which is shown in text and graph format.
The first on the savings account list is SmartyPig. Click on the plus-sign button, and you'll see how the SmartyPig savings account rate has changed in the last two years. One complication is when banks add balance caps. That is what happened when SmartyPig's rate increased from 2.01% to 2.15% APY in May 2010. In addition to the rate increase, SmartyPig introduced a $50K balance cap. If your balance goes above $50K, the entire balance would be subject to a yield of only 0.50%.
Fortunately, balance caps are not common for savings accounts. SmartyPig and Redneck Bank (and Redneck's two sister banks) are the main ones. However, balance caps are typical for reward checking accounts, and it has become common for banks to reduce their reward checking account balance caps. If you see a reward checking account that limits the top rate to $15K or $10K, it's likely that the bank used to offer the top rate for balances up to $25K.