I remember when I opened my first online savings account back in 2004. It was at ING Direct, and at that time it was paying a 2.00% APY. When rates finally started to climb in 2005, I thought 2% savings accounts would be history. At the start of 2005, EmigrantDirect was launched with its 3% online savings account. Rates climbed for the next two years. Those were the good old days.
In today's record low interest rate environment, most online savings accounts are paying rates under 1.50%. ING Direct's Orange Savings Account rate is now at 1.10% APY, about half of what it was back in 2004. However, there are a few online savings accounts with nationwide availability that are still paying 2% APY. There are not many, and I don't know how these rates will last, but as of 3/17/2010, they still exist. Below is a short summary of five banks that still have these 2% savings accounts.
EverBank's 3-Month Intro Rate
Some may argue if this should qualify for the list. I'm going to include it since it may be a good deal for some. EverBank continues to offer 2.25% as part of its 3-month intro rate for its Yield Pledge Money Market Account and its FreeNet Checking. It's important to note that the standard money market APY is 1.26% APY. EverBank shows that the first-year APY is 1.51%. This is a blended APY that combines a guaranteed 3-month 2.25% rate with an assumed 9-month rate of 1.25%. Also, it's important to note that the 2.25% only applies to the first $50K for the money market and the first $100K for the checking. Even with these limitations, 2.25% for 3 months is much better than any 3-month CD than you can get these days. Refer to my account review for more details.
The Little Known Ready Saver Account
The 2.00% APY Ready Saver has only been on my weekly summary list for about a month. It's an internet product of the North Carolina bank Southern Community Bank and Trust. It's available nationwide except for North Carolina residents. Even though I have just recently been reporting on this, it's not a newcomer. According to a bank rep, they've been offering this 2.00% APY on this Ready Saver account for 18 months. It has some nice features such as no minimum balance requirements and no rate tiers. The account does have some downsides: hard credit pull, withdrawal limitations more severe than typical and an ACH bank-to-bank transfer service that's a little behind for online banks. Refer to my account review for more details.
RedneckBank and its Two Sister Banks
RedneckBank.com and its sister banks, EvantageBank.com and AmericaNetBank.com, are internet divisions of three Oklahoma banks which are all owned by one family (the Huckabay family). They have been offering an online savings account called Mega Money Market that has been paying 2.00% APY on balances up to $35K (1% for above) since April 2009. These banks also offer a reward checking account that pays 4% APY on balances up to $10K. More banks which offer reward checking accounts have added a companion savings account. The nice thing about these Oklahoma banks is that they don't require you to have the reward checking account and meet its monthly requirements to earn the top rate on the savings account. Also, the savings account doesn't have minimum balance requirements. The downside is their ACH bank-to-bank transfer service which has limitations and other issues. For more details, refer to my review of these banks that I did earlier this month.
SmartyPig Savings Account
SmartyPig's savings account has always been a rate leader since it was launched in the spring of 2008. Its current yield of 2.01% APY has held since August 2009. The SmartyPig savings account is not the typical online savings account. It's designed to help people to save for specific purchases. For those with large savings, it has some features that may irritate you such as a monthly auto transfer requirement and the requirement of creating goals. One important note regarding SmartyPig is that the bank that holds its deposits, West Bank, has announced that SmartyPig has grown too big, and it's in the process of finding a larger bank to hold SmartyPig deposits. SmartyPig's rates have been set by West Bank, so a new bank could have a major impact on future rates. Refer to my SmartyPig review for more account details and rate history.
Alliant Credit Union
The last bank offering a nationwide 2% savings account isn't a bank. It's a credit union. Alliant Credit Union has a long history of offering a very competitive savings account. The current 2.00% APY has held since July 2009. The minimum balance to earn this rate is only $100. Anyone can qualify to join Alliant Credit Union by being a member of the national or local PTA. In addition to top savings accounts, Alliant also has top rates for checking accounts, CDs, HSAs and IRAs. Near the end of each month, Alliant's board of directors decides on the rates for next month. So we should know in the next week if this 2% will continue through April. I hope this post doesn't jinx it ;-) For more info on Alliant, please refer to my Allaint Credit Union review.