There are currently 10 banks offering nationally available savings or money market accounts with a yield of at least 1.00%. I last reviewed these in my weekly summary. Many of these are promotional rates that will fall after the promotional period. Others are new internet banks which launched their savings accounts this year. So they don't have much history. Only 2 out of the 10 have been offering top rates for over a year. These are MyBankingDirect and Incredible Bank. I thought it would be useful to compare these two accounts and see how their rates have changed over the last year.
Alliant Credit Union Savings Account & June's Rate Cut
There's another savings account with a yield just under 1.00% that has a long history. That's Alliant Credit Union's savings account. I thought it would be useful to include this in the comparison. But I have some bad news about this savings account. I called Alliant today to find out if the board has approved June rates. They have approved the new rates, and unfortunately, the savings account yield will fall from 0.95% to 0.80% effective June 1st. The High Rate Checking yield will also fall. The new yield will be 0.75%, down from 0.90%.
I wanted to include Alliant's savings account since it has a long history of top rates. This is a good example that a long history of top rates doesn't guarantee that the top rates will continue.
Another reason I wanted to include Alliant Credit Union is due to its online banking which has features that are much better than most internet banks. I have more details on these features in my Alliant account review.
MyBankingDirect Money Market Account
MyBankingDirect is an internet division of New York Community Bank. I had first reported on MyBankingDirect way back in 2005. It has only been in the last year or two that it has been a rate leader. My last review of its money market account was in June 2011 when the yield was 1.25%. There has only been one rate drop since that time. The yield is now 1.15% for balances of at least $5,000 which is second only to TIAA Direct.
I called MyBankingDirect to see it I could get any clues about future rates, but I didn't have any luck. I was just told the rate is subject to change at anytime.
MyBankingDirect's online banking is a downside. There haven't been any improvements since my June 2011 review. The bank uses MoneyHQ for its bank-to-bank ACH transfer services. This has a cost of $4.95 per month. If you open this account, you'll want to use another bank's ACH service to transfer money into and out of your MyBankingDirect account. A reader provided additional downsides in his bank review.
Incredible Bank Money Market Account
Incredible Bank is an internet division of River Valley Bank. I first reported on Incredible Bank in November 2009 when it launched its internet checking account. Since that launch, the checking account yield has remained very competitive. It's currently 0.93% APY for balances up to $250,000.
Incredible Bank launched the money market account last year, and I first did a review of this account in May 2011. When it started, you needed a $100K balance for the top rate. However, that changed in August when the top rate was made available for balances of $2,500 to $250,000. The rate has fallen, but like the checking account, it remains very competitive. It's currently 1.00% APY for balances of $2,500 to $250,000.
One downside of the money market account is a potential monthly fee of $10 if the average collected balance falls below $2,500 during the statement cycle. Another downside with Incredible Bank is a low limit on bank-to-bank ACH transfers. There's a $50K/day inbound limit and a $10K/day outbound limit. To get around these low limits, you'll need to use another bank's ACH service to make deposits and withdrawals.
Comparing Rates for the Last Year
I've graphed the yields of Alliant's savings account, Incredible Bank's money market account and MyBankingDirect's money market account in the following chart. As you can see, MyBankingDirect's rate has declined the least over the last year. Incredible Bank had the most rate cuts, but they have been small. Alliant held its rate steady for all of 2011, but that has changed this year.
Alliant Credit Union has a long history of offering top rates on its savings account. That's starting to change, and with the June rate cut that's scheduled, it's hard to say if it will remain competitive. MyBankingDirect and Incredible Bank do have some history of top rates, but as we have seen, there's no guarantee that they will remain on top. If you want the best savings account rate, you are probably going to have to switch banks at least once every year.
Finding the Best Savings, Money Market & Checking Account Rates
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