The banks offering the only non-promo nationwide 2.00% savings account have announced a rate cut. The three internet banks owned by the Huckabay family (Evantage, AmericaNet and Redneck Bank) have posted the following note in their Mega Money Market pages:
Effective November 18, 2010, the interest rate offered on Mega Money Market Checking Accounts will be 1.75%.
A similar rate cut is also scheduled for the reward checking account:
Effective November 18, 2010, the interest rate offered on Rewards Checking Accounts will be 3.75%.
I don't see any notice regarding balance cap changes, so hopefully, those will remain the same. For the Mega Money Market, the top rate applies to balances up to $35K. The reward checking top rate applies to balances up to $10K.
These rates have held since May 2009.
When I last reviewed the Mega Money Market accounts in August, I expressed concern about them maintaining the 2.00%. As I mentioned in August, the parent banks of Evantage and AmericaNet are small. Their combined deposits are only $149.56 million based on 6/30/2010 data. So it doesn't take too many customers to increase their deposits. If deposits are growing without an increase in their loans, they'll have to reduce their deposit growth by either cutting rates or by reducing availability of new accounts.
There are some savings accounts in the nation that offer higher rates. However, these are tied to the banks' reward checking accounts. This is common for the banks which offer the Kasasa branded accounts. The reward checking is called Kasasa Cash and the savings is called Kasasa Saver. A good example of this combo is at First Arkansas Bank & Trust which offers (as of 10/7/2010) a Kasasa Cash account that pays 3.50% APY for balances up to $35K and a Kasasa Saver account that pays 2.04% APY for all balances. However, this 2.04% APY only applies if the Kasasa Cash monthly requirements are met (Note, these accounts are now only available for Arkansas residents. See review).
The nice aspect of these Mega Money Market accounts is that they do not require that you meet the reward checking monthly requirements to qualify for the top rate. In fact, you don't even need to have the reward checking account to open the Mega Money Market account. The only thing that sets the Mega Money Market apart from the typical online savings account is that there's a maximum balance of $35K for the top rate. The portion of the balance above $35K only earns 1.00% APY. I'm not sure if this is scheduled to change in November.
Thanks to the reader tightwad who posted this rate cut news in the discussion forum.