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Retirement Savings: How Much Should I Save Each Month?The Best Savings Account with a History of Top Rates
After reading this NYT Bucks blog post, I thought it was time to provide an update on my list of the best online savings accounts. This NYT blog post used Bankrate's quarterly rankings to come up with a list of savings accounts that have a history of staying competitive. One problem I see is that they included 3 banks that have failed. Also, I don't know how M&T Bank, NA qualified. Their online savings accounts have been paying only 0.50% for a while (both at mandtbank.com and at onbank.com).
I've been following a few nationally available savings accounts for the last year in an attempt to identify the savings accounts with the best chance of staying competitive. In addition to top rates, I consider financial health and account features like ACH bank-to-bank transfer service.
My last review was in December. I'm afraid only one has remained on top. Here's the updated list:
| Bank/Credit Union | 12/22/09 APY | 2/25/10 APY |
2/25/10 Bankrate Rating |
| Alliant Credit Union | 2.00% | 2.00% | 3 stars |
| Discover Bank Savings | 1.75% | 1.35% | 5 stars |
| CNB BankDirect | 1.70% | 1.35% | 4 stars |
| 1st Constitution Direct | 1.50% | 1.25% | 4 stars |
Alliant Credit Union is the clear winner with a 2.00% APY. In addition, readers have reported that this will continue through March. Refer to my Alliant review for more details about the credit union and the savings account.
CNB BankDirect and Discover Bank are tied for second with a 1.35% APY savings account. With Discover Bank's new account center, I would give them the edge (see my Discover Bank review). Also, existing customers are currently receiving a higher savings account rate (around 1.60%).
CNB BankDirect is the internet division of The Citizens National Bank of Bluffton, Ohio. It's a small bank with only $419 million in deposits. As a comparison, Discover Bank has $33.5 billion in deposits. CNB BankDirect launched in the summer of 2008 and in the fall of 2008 began offering a 4% intro yield guaranteed for 6 months. They held to their guarantee, and they have remained very competitive until recently (see review).
1st Constitution Direct is at the bottom with a 1.25% APY. Even their 3-month intro rate is only 1.25% APY. I first reported on their savings account in June 2008 when the 3-month intro rate was 4.00% APY with a standard rate of 3.25% APY.
I think it's time for a new list. What is your pick for the best savings account?