In the last few months we have been issuing monthly press releases. The press releases are intended to highlight important DepositAccounts.com articles from the previous month. They are also intended to provide a summary of average deposit account rates and how they have changed in the last month. We thought these press releases would be of interest to readers. Thus, I'm starting to post them in the blog. The March press release is below. Please note that I will continue to post my weekly summaries without any changes.
One new statistic that I added this month is the average rate of internet savings and money market accounts. I always find it frustrating when I see internet banks offering uncompetitive savings account rates advertising that their rates are 4x or 5x higher than the average savings account rate. They should be comparing their accounts with the average rate of internet savings accounts.
As described below, the average internet savings account rate is 0.676%. This is low, but it is much higher than the average at brick-and-mortar banks and credit unions. If you're willing to regularly jump to new internet banks, you will likely obtain rates much higher than this average. That was the main topic of this press release which you can read below:
Rate Benefits of Internet Savings Accounts - Monthly Deposit Rate Survey and Commentary
Across a nationwide survey of more than 275,000 rates at 8,000 banks and credit unions, average savings account interest rates continued a steady decline in all major categories of savings products. Savers searching for the best deposit rates would benefit from looking online. The average internet savings account rate is 43 basis points higher than the average rate of savings accounts from all banks and credit unions surveyed. In addition, the launch of new internet banks commonly brings with it competitive accounts. One example in February was TIAA Direct, a new internet bank division of TIAA-CREF. TIAA Direct is offering a competitive savings and money market account with a rate that is over four times higher than the national average. In this interest rate environment of very low rates, it is more important than ever for savers to extend their search beyond their local brick-and-mortar banks in order to find a respectable rate.
Top Stories for This Month:
- FDIC Forces Another Bank To Slash Its Reward Checking Rate
- Comparing Top Long-Term CD Rates After Early Withdrawal Penalties
- Can Reward Checking Remain a Good Alternative to Internet Banks?
- TIAA-CREF Launches New Internet Bank with Top Savings Account Rate
- Double Check Your Ally Bank CD Interest
Bank Failures for February
4 banks and 1 credit union closed in February 2012. This is a decrease from the 12 banks and 3 credit unions that closed in February of 2011. Notable closures included Home Savings of America in Little Falls, Minnesota with $434.1 million in assets (rated 1-star at DepositAccounts.com, indicating “high risk”; view health ratings for any bank or credit union and list of troubled banks by texas ratios).
For internet banks, the average rate for savings and money market accounts is 0.676%. This exceeds the average rate of all savings accounts by 43 basis points.
The average savings account rate decreased by over 2% from 0.255% in February to 0.249% in March. The average rate among the top 10% of the most competitive nationwide banks decreased by over 2% from 0.761% to 0.745%. Alabama has the best average rate in the nation at 0.45% while Arizona has the worst at 0.15%.
The average checking account rate decreased by over 3% from 0.157% in February to 0.152% in March. The average rate among the top 10% of the most competitive nationwide banks decreased by over 4% from 0.535% to 0.514%. Louisiana has the best average rate in the nation at 0.23% while Idaho has the worst at 0.08%.
The average 1-year CD rate decreased by over 3% from 0.592% in February to 0.574% in March. The average rate among the top 10% of the most competitive nationwide banks decreased by over 2% from 1.091% to 1.065%. District of Columbia has the best average rate in the nation at 0.72% while Nevada has the worst at 0.40%.
The average 5-year CD rate decreased by over 3% from 1.655% in February to 1.61% in March. The average rate among the top 10% of the most competitive nationwide banks decreased by over 2% from 2.301% to 2.245%. New Hampshire has the best average rate in the nation at 1.80% while Nevada has the worst at 1.26%.
The average reward checking account rate decreased by over 3% from 1.412% in February to 1.377% in March. The average rate among the top 10% of the most competitive nationwide banks decreased by over 1% from 3.333% to 3.288%. The average balance cap for reward checking accounts has fallen from $22,495 to $22,034. Alaska has the best average rate in the nation at 2.75% while Hawaii has the worst at 0.73%. The balance cap is the maximum balance that qualifies for the reward checking account's top rate.
About Deposit Accounts
DepositAccounts.com monitors more than 8,000 banks and credit unions and provides weekly and monthly rate surveys and monthly commentary covering savings trends. On its consumer-facing site, DepositAccounts.com, it provides in-depth, unbiased reviews and the industry’s most thorough comparison tools to help better inform consumers in their banking decisions.