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Best Bank Account Interest Rates - Summary For May 12, 2020

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Most online banks had been slowly transitioning to lower rates since March. The transition speed has picked up in the last week as major online banks like Ally, Synchrony, Barclays and Goldman Sachs lowered their online savings account rates by 20 to 25 bps.

During the zero bound years from 2008 to 2015, most online savings account rates bottomed out in a range from 0.70% to 1.00%. I’m hoping that we won’t see new bottoms from the major online banks. However, based on how their CD rates are falling, I am a little worried that the bottom may be lower this time.

I’ve listed the most noteworthy rate changes that have occurred in the last two weeks. I created two lists. The first includes rate changes from past rate leaders which are generally not well-known names. The second list includes rate changes from the major online banks. All percentages are APYs:

Rate changes from past rate leaders:

  • FitnessBank Savings Top Tier (1.90% → 1.75%)
  • BMO Harris Platinum Money Market (1.75% → 1.65%)
  • CFG Bank High Yield Money Market (1.73% → 1.62%)
  • Popular Direct Ultimate Savings (1.70% → 1.60%)
  • HSBC Direct Savings (1.70% → 1.60%)
  • Vio Bank High Yield Online Savings (1.70% → 1.60%)
  • SFGI Direct Savings (1.71% → 1.56%)
  • Prime Alliance Bank Personal Savings (1.71% → 1.55%)
  • WebBank Savings (1.66% → 1.51%)
  • WauBank High-Yield Savings (1.60% → 1.50%)
  • Northern Bank Direct Money Market (1.75% → 1.50%)
  • My eBanc eRelationship Savings (1.10% → 1.50%)
  • Gateway First Bank Savings (1.75% → 1.50%)
  • BrioDirect High-Yield Savings (1.55% → 1.40%)
  • Simple Protected Goal (1.55% → 1.40%)
  • SmartyPig Savings (1.40% → 1.30%)
  • TotalDirectBank Money Market Deposit (1.55% → 1.30%)
  • PenFed CU Premium Online Savings (1.40% → 1.25%)
  • BankUnitedDirect Online Money Market (1.00% → 0.75%)

Rate changes from the major online banks:

  • CIT Bank Money Market (1.65% → 1.55%)
  • CIT Bank Savings Builder (1.55% → 1.45%)
  • Goldman Sachs Bank Online Savings (1.55% → 1.30%)
  • Synchrony Bank Savings (1.50% → 1.30%)
  • Barclays Online Savings (1.50% → 1.30%)
  • Ally Bank Online Savings (1.50% → 1.25%)
  • Sallie Mae Bank Money Market (1.25% → 1.15%)
  • Sallie Mae Bank High-Yield Savings (1.20% → 1.10%)
  • Ally Bank Money Market (0.75% → 0.50%)

Current rate leaders

Affinity Plus Federal Credit Union continues to hold the top rate spot with its Superior Money Market account that earns 2.02% APY. There are a couple of important caveats. First, the 2.02% APY only applies to balances up to $25k. The rate falls to 0.75% on balances over $25k. Second, these rates require that you maintain a monthly direct deposit of at least $500.

Three banks now share the second spot with a 1.75% APY.

FitnessBank lowered the rates of its Fitness Savings account in May. Its top tier APY fell from 1.90% to 1.75%. The top tier APY requires that the customer average 12,500 steps per day for the month as measured by a step tracker app. The rate falls to 1.55% APY when the step average is between 10,000 and 12,500, and 1.35% APY when the step average is between 7,500 and 10,000. The rate falls significantly for lower step averages. There are lower step requirements for customers over 64.

The second bank that offers 1.75% APY is Patriot Bank. Its Money Market Account yield has held at 1.75% since March, and new customers will receive a guarantee that this promotional APY will last at least until June 30th.

The third bank that offers 1.75% APY is First Foundation Bank. Its Online Savings Account yield has also held at 1.75% since March. However, unlike Patriot Bank, First Foundation Bank isn’t offering any rate guarantee.

Two new accounts were added to the list. The first is Bank of Hope’s Money Market Account which has a 1.65% APY for balances of at least $1k. It’s not available in 8 states. The second is Neighbors Bank’s High Yield Online Savings which has a 1.70% APY for balances of at least $25k.

Rate guarantees without withdrawal penalties

When rates are falling, the best savings and money market deals are specials that guarantee a rate for a period of time. As you would expect in our current rate environment, these rates have been falling and the guarantee periods have been shortening.

Patriot Bank restarted a new version of its money market promotion in March. The promo rate is now only 1.75% APY. The rate guarantee period did increase slightly, moving from May 31st to June 30th. Earlier this year, the promo offered 2% guaranteed through July.

The second rate guarantee is the Platinum Money Market promotion offered by CFBank which is guaranteeing only 1.30% APY on balances of at least $25k. This had been 1.50% APY last month. There’s a short guarantee period of 90 days. This used to be 120 days. The ongoing interest rates are low (0.50% APY for $25k and above, 0.25% for $5k to under $25k).

Last month TIAA Bank lowered the promo rate of its Yield Pledge Money Market account from 1.75% to 1.40% APY. This applies to balances up to $250k. A version of this offer has long been available at TIAA Bank/EverBank. After the 1-year intro period, a tiered-rate structure takes effect. The current ongoing APYs range from 0.90% for under $10k to 1.35% for over $100k.

No-penalty CDs have some of the liquidity of savings and money market accounts, but like CDs, they offer a rate lock which can be useful when rates are falling. No-penalty CDs have become more common at online banks in the last year, and they are something to consider, especially if you already have a savings account at the bank. The main issue now is that their rates have been falling. If their rates are higher than the savings account, these can be good deals in this falling rate environment.

Some banks like Ally and Goldman Sachs make it easy to open and close the No Penalty CDs. You just lose access to the money in the No Penalty CD for the first six days from account funding. After that, you are free to close the CD without penalty. Ally makes it very quick and easy to move the CD funds into your savings or checking account.

There’s a new no-penalty CD, and it’s a rate leader. CFG Bank is offering a 13-month Penalty Free CD with a 1.55% APY. It’s different from the others in that it allows a partial withdrawal in addition to a full withdrawal. The 13-month term makes it an even better deal. Remember, for no-penalty CDs, the longer term is always better.

Unfortunately, three banks cut their no-penalty CD rates. Those include Ally Bank, CIT Bank, and Investors eAccess.

The rates of all others have held steady in the last two weeks.

Below is a list of noteworthy no-penalty CDs.

  • 1.55% APY 13-month Penalty Free CD ($500 min) - CFG Bank
  • 1.55% APY 7-month No-Penalty CD ($500 min) - Goldman Sachs Bank USA
  • 1.45% APY 11-month No-Penalty CD ($500 min) - Goldman Sachs Bank USA
  • 1.40% APY 11-month No-Penalty CD ($1k min) - CIT Bank
  • 1.35% APY 13-month No-Penalty CD ($500 min) - Goldman Sachs Bank USA
  • 1.35% APY 11-month Liquid CD ($5k min) - Citizens Access
  • 1.30% APY 11-month No Penalty CD (no min) - Ally Bank
  • 1.20% APY 11-month Flex Time Deposit ($100k min) - M.Y. eBanc
  • 1.10% APY 11-month Flex Time Deposit ($10k min) - M.Y. eBanc
  • 1.01% APY 11-month No-Penalty CD ($10k min) - PurePoint Financial
  • 0.95% APY 13-month No-Penalty CD ($10k min) - PurePoint Financial
  • 0.90% APY 14-month No-Penalty CD ($10k min) - PurePoint Financial
  • 0.70% APY 11-month No Penalty CD ($5k min) - Colorado Federal Savings Bank
  • 0.50% APY 6-month No-Penalty CD ($500 min) - Investors eAccess

Remember that when talking about no-penalty CDs (that function like Ally’s No Penalty CD), a longer term is always better. Since you can close these types of no-penalty CDs at any time after the first six days, I can’t think of a reason to choose a shorter-term no-penalty CD if the rate is the same.

Competition from Money Market Funds

Another option for your cash instead of savings accounts and money market accounts are money market funds from brokerages. These don’t have FDIC coverage, but they can be reasonable alternatives to deposit accounts. Back when the Fed was holding rates near zero from 2008 to 2015, money market funds had yields of around 0.01%. Now that the Fed has cut rates back to zero, money market fund yields will likely fall back to near 0.01%. This might take a few months.

The large yield reductions continue. Vanguard Prime Money Market Fund 7-day yield fell 20 bps to 0.47% in the last two weeks. Fidelity Money Market Fund 7-day yield fell 13 bps to 0.25%.

Municipal money market funds have been volatile in the last year. The volatility went way up in March due to liquidity issues. The Fed’s actions have helped with these issues, and the result is that the yields have fallen considerably from six weeks ago when yields were over 3.00%. From two weeks ago, the Vanguard Municipal Money Market Fund 7-day yield fell from 0.40% to 0.36%, and the Fidelity Municipal Money Market Fund 7-year yield fell from 0.16% to 0.14%.

Reward Checking Accounts

In my list of nationally available reward checking accounts, three credit unions lowered their rates in the last two weeks.

Consumers Credit Union lowered three of its Rewards Checking tiers. The top tier now offers 4.09% APY on balances up to $10k (down from 5.09%). The bottom tier now offers 2.09% APY on all balances up to $10k (down from 3.09%).

The second credit union to lower rates is Hanscom Federal Credit Union. Its Kasasa Cash account now has a top APY of 1.00% for balances up to $15k.

The third credit union to lower rates is Dover Federal Credit Union. Its Kasasa Cash account also had a large rate cut when May began. The top tier now offers only 0.25% on balances up to $30k. This new rate is extremely disappointing. It’s so low that it will no longer be listed in this summary. When this Kasasa Cash was launched a year ago, it had a 3.25% APY. The rate started to fall last March. By the end of March, its top tier APY had fallen to 1.00%.

The rate cuts at Hanscom FCU and Dover FCU are worrisome. If others fall to these low levels, reward checking accounts will no longer be a high-yield alternative to online savings accounts.

There continues to be a tie for the rate leader for balances of at least $25k. Both The Bank of Denver and ECCU offer 3.00% APY. ECCU’s balance cap is $10k larger ($35k). However, The Bank of Denver also offers that competitive Kasasa Saver account. I reviewed ECCU and its reward checking account three weeks ago.

Overall, reward checking accounts have generally been more resistant to Fed rate cuts than online savings accounts. We’ll see if this continues now that the Fed has moved us back to the zero bound. History during the last zero bound period (2008 to 2015) has shown that reward checking accounts can sustain rates significantly higher than online savings account rates during a zero interest rate environment.

To find the highest reward checking rates and balance caps in your state or nationwide, please refer to our reward checking rate table. If you're new to reward checking, please refer to my blog post, Overview of Reward Checking and Our Reward Checking Table.

Certificate of Deposit Rates

I’m now publishing my CD survey as a separate post. Please refer to my survey of the best CD rates. This recap focuses on liquid accounts.

CD Deals: Unfortunately, there aren’t many CD deals. Those that pop up rarely last long. I’ll just mention a couple of ones here.

Compared to other online banks, Comenity Direct currently has some of the highest CD rates for terms of one year to five years. Minimum deposit is only $1.5k.

Only one bank now has a higher 5-year rate than Comenity Direct. It’s The Federal Savings Bank. This bank has been offering 2.05% APY on its 5-year CD for a while. Minimum deposit is $10k. I reviewed this CD and bank in this April 16th post.

This is my new weekly summary with the Fed review split off on a separate blog post. My weekly summaries will now be focused entirely on deposit rates and deals. Please keep all discussion about the Fed, the economy and politics to my Fed/Economy review blog post.

Rates as of May 12, 2020

Checking/Savings/Money Market Accounts:

  • Noteworthy Accounts Available Nationwide:
InstitutionRatesNotes
Affinity Plus Federal Credit Union2.02% (up to $25k), 0.75% APY ($25k+)Superior Money Market (min $500 direct deposit into any account)
FitnessBank1.75% ($250k max) (requires using step tracker app and averaging 12.5k steps/daily) Fitness Savings Account - Account review
Patriot Bank1.75% ($100 min, rate guarantee through 5/31/2020)Online Money Market (not available in CT or NY) - Account review
First Foundation Bank1.75% ($1k min)Online Savings - Account review
Comenity Direct1.70% ($100 min)High-Yield Savings - Account review
Neighbors Bank1.70% ($25k), 1.00% ($25)High Yield Online Savings (*NTS) - Account review
UFB Direct1.70% ($25k min)Premium Money Market - Account review
Bank of Hope1.65% ($1k min)Money Market Account (Not available in AL, CA, IL, NJ, NY, TX, VA, WA) (*NTS)
BMO Harris Bank1.65% ($5k)Platinum Money Market (excludes AZ, FL, IL, IN, KS, MN, MO and WI - Account review
CFG Bank1.62% ($25k min), 1.52% ($1k)High Yield Money Market Account - Account review
Vio Bank1.60% Online High Yield Savings - Account review
HSBC Direct1.60%HSBC Direct Savings
Western State Bank1.60% (up to $3m)High Yield Money Market - Account review
Popular Direct1.60% ($5k min opening deposit) Ultimate Savings - Account review
Quontic Bank1.60% ($100k), 1.50% ($5k), 1.40% APY (up to $5k)Personal Money Market - Account review
SFGI Direct1.56%SGFI Direct Savings Account - Account review
Live Oak Bank1.55% ($5 million max) Savings Account - Account review
Prime Alliance Bank1.55% ($10k+) 1.45% ($1+)Personal Savings - Account review
CIT Bank1.55% ($100 min)Money Market - Account review
Marcus by Goldman Sachs1.55% ($500 min)7-month No Penalty CD - Account review
CFG Bank1.55% ($500 min)13-month Penalty Free CD - Account review
Rising Bank1.55% ($1k min)High Yield Savings - Account review
First Internet Bank1.51% (no min) Money Market Savings
WebBank1.51% ($1k min)High Yield Savings - Account review
CommunityWide Federal Credit Union1.50% (penalty-free withdrawals first 5 days of each calendar quarter)High Rate Quarterly Funds Account - Account review
American Express National Bank1.50%High Yield Savings - Account review
DollarSavingsDirect1.50%Dollar Savings Account - Account review
Capital One1.50%360 Performance Savings - Account review
Gateway First Bank1.50% Savings Account (available in 38 states) - Account review
All America Bank1.50% (up to $50k), 0.50% ($50k+)Mega Money Market Account - Account review
Redneck Bank1.50% (up to $50k), 0.50% ($50k+)Mega Money Market Account
TAB Bank1.50% ($1 min)High Yield Savings - Account review
SkyOne Federal Credit Union1.50% ($1k) High Yield Savings ($1k monthly deposit required) - Account review
Northern Bank Direct1.50% ($5k min)Money Market - Account review
Pacific National Bank1.50% ($5k min) Money Market Deposit Account - Account review
Citizens Access1.50% ($5k min)Online Savings Account - Account review
PurePoint Financial1.50 ($10k min)Online Savings - Account review
Ally Bank1.50% ($25k min)No-Penalty 11-month CD - Account review
My eBanc1.50% ($25k min opening deposit)eRelationship Savings Account - Account review
CIBC USA (formerly The Palladin PrivateBank)1.45%Agility Savings Account - Account review
Marcus by Goldman Sachs1.45% ($500 min)11-month No Penalty CD - Account review
CIT Bank1.45% ($25k min)Savings Builder - Account review
TIAA Bank1.40% (up to $250k), 1yr intro rate; 1.35% ($100k+), 1.25% ($50k+), 1.10% ($25k+) ongoing ratesYield Pledge Money Market - Account review
Simple1.40%Protected Goal Account
Discover Bank1.40%Online Savings - Account review
BrioDirect1.40% ($25 min)High-Yield Savings - Account review
Bank 71.40% ($100 min)High Rate Online Savings Account
ableBanking1.40% ($250 min)Money Market Savings - Account review
CIT Bank1.40% ($1k min)11-month No-Penalty CD - Account review
Bank 71.40% ($5k min)High Rate Online Money Market
Marcus by Goldman Sachs1.35%13-month No Penalty CD ($500) - Account review
Citizens Access1.35% ($5k)11-month Liquid CD - Account review
My eBanc1.30%Super Saver Money Market - Account review
Synchrony Bank1.30%High Yield Savings - Account review
Barclays1.30%Online Savings - Account review
Smarty Pig1.30%SmartyPig Savings - Account review
Marcus by Goldman Sachs1.30% ($500 min)High-Yield Online Savings Account - Account review
TotalDirectBank1.30% ($5k min)Direct Money Market Deposit Account (not available in CA or FL) - Account review
Discover Bank1.30% ($100k min), 1.25% ($2.5k) MMA - Account review
CFBank1.30% ($25k min deposit) Platinum Money Market Promo (rate guaranteed for 90 days) - Account review
Mutual of Omaha Bank1.26% ($1k min/$1m max)Online Money Market
Ally Bank1.25%Online Savings - Account review
PenFed Credit Union1.25% (up to $250k)Premium Online Savings
Investors eAccess1.25% (up to $2m)eAccess Money Market - Account review
State Bank of India (IL)1.25% (no min) Savings
State Bank of India (IL)1.25% (no min) Money Market
PNC Bank1.25% Online High Yield Savings (not available in all states) - Account review
Virtual Bank1.25% eMoney Market Special - Account review
CNB Bank Direct1.21% ($25k+)Premium Money Market
Alliant Credit Union1.20% ($100 min)High-Rate Savings - Account review
CFSB (Colorado Federal Savings Bank)1.20% ($50k+) Premier Savings (New customers) - Account review
Sallie Mae Bank1.15%Money Market Account - Account review
UmbrellaBank.com1.11% ($25k min), 0.65% ($1k)Money Market
Sallie Mae Bank1.10%High Yield Savings - Account review
Bank5 Connect1.10% ($100 min)High Interest Savings - Account review
Northfield Bank1.05% ($225k max) Online Platinum Savings - Account review
Northpointe Bank1.05% ($25k+), 0.50% ($2m+), 0.25% ($100) Ultimate Savings - Account review
Salem Five Direct1.00% (up to $1m)eOne Savings, new customers only - Account review
FNBO Direct1.00%Online Savings
CFSB (Colorado Federal Savings Bank)1.00% High Yield Savings - Account review
MySavingsDirect1.00%MySavings Account - Account review
PurePoint Financial0.95% ($10k) 13-month No-Penalty CD Account review
BankUnitedDirect0.75%Online Money Market - Account review
Bay State Savings Bank0.75% ($5k min)Smile Worcester County Consumer Money Market - Account review
BankPurely0.75% ($25k min) PurelyMoneyMarket - Account review
iGObanking.com0.75 ($25k min) MMA, New accounts and new money only - Account review
Quorum Federal Credit Union0.75%HighQ Savings Account
MutualOne Bank0.70% ($1m max)Online Statement Savings - Account review
American Heritage Credit Union0.70% ($10k min)High Yield Savings
EBSB Direct0.62% ($10k+), 0.50% ($10+), 0.25% ($2m+)Money Market Special 3 - Account review
Bethpage Federal Credit Union0.50% ($500 min)Money Market
Quontic Bank0.50% ($5k)High Yield Savings - Account review
DCU0.50% ($25k min)Ltd. Savings - Account review
Investors eAccess0.50% ($500 min)6-month No Penalty CD - Account review

*New To Summary

Reward Checking Accounts:

  • Noteworthy Accounts Available Nationwide:
InstitutionRatesNotes
La Capitol Federal Credit Union4.25% (up to $3k), 2.00% ($3k-10k), 0.10% ($10k+)Choice Checking
Consumers Credit Union4.09% (up to $10k), 0.20% ($10k-$25k), 0.10% ($25k+) Rewards Checking Tier A- debit card and $1k credit card requirements (Changes effective May 2020)
Ideal Credit Union4.00% (up to $20k), 0.05% ($20k+)High Yield Checking Special (rate guaranteed through 6/31/2020) - Account review
Western Vista Federal Credit Union4.00% (up to $15k), 0.04% ($15k+)Panorama Checking - Account review
Partner Colorado Credit Union3.50% (up to $10k), 0.50% ($10k-$25k), 0.10% ($25k+)High Interest Checking
Evansville Teachers Federal Credit Union3.30% (up to $20k), 0.00% ($20k+)Vertical Checking - Account review
Consumers Credit Union3.09% (up to $10k), 0.20% ($10k-$25k), 0.10% ($25k+)Rewards Checking Tier B- debit card and $500 credit card requirements (Changes effective May 2020)
Market USA Federal Credit Union3.01% (up to $15k), 0.05% ($15k+)VIP Checking Platinum Tier - Account review
ECCU3.00% (up to $35k), 0.25% ($35k+)Free Kasasa Cash Checking - Account review
The Bank of Denver3.00% (up to $25k), 0.25% ($25k+)Kasasa Cash Checking - Account review
Garden Savings Federal Credit Union3.00% (up to $15k), 0.15% ($15k+)Platinum Checking
Lake Michigan Credit Union3.00% (up to $15k), 0.00% ($15k+)Max Checking (requirements waived through 4/30/2020)
INOVA Federal Credit Union3.00% (up to $15k), 0.70% ($15k+)Shield Checking - Account review
Signature Federal Credit Union3.00% (up to $20k), 0.10% ($20k+)Choice Checking
Great Lakes Credit Union3.00% (up to $10k), 0.05% ($10k+)Free Checking
Industrial Bank2.50% (up to $15k), 0.25% ($25k+)Kasasa Cash
Campus Federal2.31% (up to $10k), 0.05% ($10k+)Lagniappe Checking
New Buffalo Savings Bank2.27% (up to $15k), 0.2497% ($15k+)Kasasa Cash - Account review
Bellco Credit Union2.25% (up to $25k), 0.25% ($25k+)Boost Interest Checking - Account review
Consumers Credit Union2.09% (up to $10k), 0.20% ($10k-$25k), 0.10% ($25k+)Rewards Checking Tier C - debit card with NO credit card requirements (Changes effective May 2020)
TruStone Financial Credit Union2.02% (up to $20k), 0.10% ($20k+)TruRate Checking - Account review
BankFirst2.02% (up to $10k), 0.15% ($10k+)Kasasa Cash
Finex2.018% (up to $25k), 0.20% ($25k+)Axcess Rewards Checking, Premier Account (formerly First New England Federal Credit Union)
First Security2.01% (up to $50k), 0.20% ($25k+)Kasasa Cash - Account review
Bay State Savings Bank2.01% (up to $20k), 0.25% ($20k+)Kasasa Cash - Account review
Main Street Bank2.00% (up to $30k), 0.25% ($25k+)Kasasa Cash - Account review
Hawaii Pacific Federal Credit Union2.00% (up to $25k), 0.25% ($25k+)Kasasa Cash Checking
Northwest Federal Credit Union2.00% (up to $25k), 0.25% ($25k+)Kasasa Cash - Account review
GreenState Credit Union2.00% (up to $20k), 0.15% ($20k+)R2 Checking - Account review
Elements Financial2.00% (up to $20k), 0.10% ($20k+)High Interest Checking - Account review
One American Bank2.00% (up to $10k), 0.25% ($10k+)Kasasa Cash - Account review
United Educators Credit Union2.00% (up to $10k), 0.25% ($10k+)High Yield Checking
Wings Financial Credit Union1.76% (up to $25k), 0.05% ($25k+)High Yield Checking - Account review
Connexus Credit Union1.75% (up to $25k), 0.25% ($25k+)Xtraordinary Checking
All America Bank1.75% (up to $10k), 0.50% ($10k+)Ultimate Rewards Checking
Redneck Bank1.75% (up to $10k), 0.50% ($10k+)Redneck Rewards Checking
Heritage Bank1.53% (up to $25k), 0.15% ($25k+)eCentive Account
KS StateBank1.50% (up to $25k), 0.50% ($25k+)Check PLUS - Account review
First Tech Federal Credit Union1.50% (up to $15k), 0.20% ($15k+)Dividend Rewards Checking
Blue Federal Credit Union1.50% (up to $15k), 0.10% ($15k+)Extreme Checking (up to 3.50% w/account relationships) - Account review
Legence Bank1.26% (up to $10k), 0.25% ($10k+)Kasasa Cash
Axos Bank1.25% (up to $150k), 0.00% ($150k+)Rewards Checking
XCEL Federal Credit Union1.00% (up to $25k), 0.25% ($25k+)Kasasa Cash Checking
Hanscom Federal Credit Union1.00% (up to $15k), 0.10% ($15k+)Kasasa Cash Checking - Account review
Orion Federal Credit Union1.00% (up to $10k), 0.25% ($10k-$100k), 0.05% ($100k-$250k), 0.01% ($250k+)Premium Checking - Account review
MainStreet Bank0.75% (up to $15k), 0.25% ($15k+)Kasasa Cash - Account review

*New To Summary

Certificates of Deposit:

Bank Account Alternatives - May Not Be FDIC Insured

InstitutionRatesNotes
GM Financial Right Notes2.00% ($500+)
Ford Interest Advantage1.65% ($50k+), 1.50% ($15k+), 1.45% (less than $15k)Ford Interest Advantage review
Duke Energy PremierNotes1.65% ($50k+), 1.50% ($10k+), 1.45% (less than $10k)Duke Energy PremierNotes review
Ally Financial Demand Notes1.50% ($50k+), 1.35% ($15k+), 1.15% (less than $15k)
Aspiration1.00% ($10k max) Spend and Save Account Cash Management Account
Vanguard Prime Money Market Fund0.47% 7-day yield
Vanguard Municipal Money Market Fund0.36% 7-day yield
Wealthfront0.35% Cash Account Cash Management Account
Fidelity Money Market Fund0.25% 7-day yield
SoFi0.20% SoFi Money Cash Management Account
Fidelity Municipal Money Market Fund0.14% 7-day yield

Removed, Rate Too Low

Dover Federal Credit Union0.25% (up to $30k), 0.05% ($30k+)Kasasa Cash - Account review

Related Pages: savings accounts, money market accounts, reward checking accounts, 1-year CD rates, nationwide deals, Internet banks
Comments
UncaMikey
  |     |   Comment #1
Nationwide/Axos appears to be paying 1.70% on savings. https://nationwide.axosbank.com/Personal/Savings
buckeye61
  |     |   Comment #2
Excellent summary Ken! Yes, the super low CD rates are a concern, but I think these online banks are in a difficult position on rates if they want to retain deposit levels. Most customers will be demanding more then low fees if they are going to bank online. Having said that, its possible that these large online only banks might put that to a test.
Predatory Depositor
  |     |   Comment #3
Looks like the only option for my IRA cash if I want to keep it in the bank is to go from 3.25% to 1.50%.

The FIs currently holding the funds, moved so slowly on transferring them that I missed some of the last of the good options. I only managed to get one good deal, and it's capped. Stuck with a very substantial amount of funds and no good options, at least at banks. At these returns, it doesn't make sense not to explore non-bank options.
Choice
  |     |   Comment #4
Q
For all...
What kind of cd FDIC/ncua guaranteed interest rate “is required” for retirement purposes on your funds? 5% or more? 3% or more? Or?
Predatory Depositor
  |     |   Comment #5
Well let's see...

The current dividend yield on AT&T stock is 7.41%, with a maximum 15% federal income tax cap. And there is a chance of capital appreciation. In fact over the next five years there is a likelihood of it.

Compare that to the return on a 5-year CD at a bank, even at the highest available rate.
#6 - This comment has been removed for violating our comment policy.
Predatory Depositor
  |     |   Comment #7
I wasn't aware that I'm required to respond to questions here, but my response would be that it's up for each investor to decide for themselves given their own situation. But I think the example I posted provides excellent support for the opinion that I expressed, which is that this is a good time to take a look at the alternatives.
Choice
  |     |   Comment #8
At&t an alternative given millions are leaving directv for streaming..why is that suitable for a retiree? 
GreenDream
  |     |   Comment #21
Choice, why do you think At&t only has one product?
Milty
  |     |   Comment #11
Yes, excellent return from AT&T. Have been looking at it along with Verizon for years, and yet cannot get myself to put a large enough investment in it to make any significant difference. A byproduct of getting old seems to be becoming more fiscally conservative. I don't even want to buy eggs now :-)
Predatory Depositor
  |     |   Comment #17
This decision is analogous to the decision about opening up the economy after the virus attack. There is no risk free option. You can risk having your savings decimated by inflation while earning 1.x% in a bank, or you can risk having it decimated by a stock market crash.

I think the "conservative" approach is also analogous to the best approach for the virus recovery. It's not either or. The conservative approach for most people in most situations is to have some of both, i.e. diversification.
Predatory Depositor
  |     |   Comment #18
As to #8. This time I have a question for you.

Can you name a company that doesn't have business challenges?
Choice
  |     |   Comment #27
My current focus is the Q of the day
GreenDream
  |     |   Comment #31
Well which Q is the Q of the day? because I see several Qs you haven't responded to. Will they be the focus of additional days? or just continue to be ignored? lol.
Banking Index
  |     |   Comment #9
The banking sector continues to take it on the chin. The BKX banking sector index is down about 45% off the highs of 2020 and down another 10% this week alone.
Predatory Depositor
  |     |   Comment #19
A bank that I used to work for and owned stock in during the 2008-2009 crash was down 40% after being "bailed out" while people were complaining that the stockholders of that company were getting rich at their expense due to the bailout. I'm still trying to figure out what the other stockholders got that I didn't.
deplorable 1
  |     |   Comment #10
What do you guys think of this HMBradley 3% checking/savings hybrid account? Seems like a better deal than rewards checking accounts all you need is a direct deposit with no debit card requirements. I'm just wondering if the rate will remain at 3% since it seems all these start ups end up dropping their rate once people sign up. It's capped at $100,000 so it's like the equivalent of doing 5 rewards checking accounts with 0 debit card hoops.
https://www.hmbradley.com/
#12 - This comment has been removed for violating our comment policy.
Rickny
  |     |   Comment #13
D1 Took a quick look, didn't find info on FDIC insurance.
Big Fan
  |     |   Comment #14
Look harder. The name of the bank is listed.
alan1
  |     |   Comment #15
HMBradley (whatever that is ) is not a bank. According to HMBradley:

Who is Hatch Bank and what is their relationship to HMBradley?
Hatch Bank is a California industrial bank, Member FDIC. All deposit accounts opened through HMBradley are provided by Hatch Bank.

https://faq.hmbradley.com/hc/en-us/articles/360038742092-Who-is-Hatch-Bank-and-what-is-their-relatio...

I haven't thoroughly examined the HMBradley website. They seem to be somewhat reluctant to state what HMBradley is, but I may have overlooked stuff. They also do not have information re Hatch Bank on their homepage -- I had to look for it elsewhere on the site (though maybe I missed something on the homepage).

And it's not clear to me whether funds deposited at (or maybe "with", or perhaps "through") HMBradley are immediately insured, or whether there's a period where the funds are on deposit at HMBradley and are being transmitted by them to Hatch Bank, and will only be FDIC-insured when they arrive at Hatch Bank. Perhaps there's more info on the HMBradley website; perhaps not.

Also, I don't know what ideplorable1 means by a "checking/savings hybrid account". The HMBradley product seems to be an interest-bearing checking account (not a rewards-type checking account) with what struck me as a complicated tier structure (though I didn't really pay much attention to that).
But I don't think it's any type of savings account. Just because a checking account pays interest (even decent interest) doesn't transform it into some sort of savings account (at least not to me and, more important, not to government regulators).
GreenDream
  |     |   Comment #20
In all that stuff you "maybe missed" and "didn't really pay much attention" to, you clearly missed the website discussing how it "helps you save " and how it "rewards you for how you spend and save".

checking accounts aren't meant for saving (not even rewards ones), they're designed around spending (rewards ones doublely so as the rewards are usually tied to so many spend transactions a month). This account is designed around spending (checking) and saving (savings) - that the interest rate is tied to how much you save (rather then how much you spend, like a rewards checking account would) is why the description of it being a hybrid checking/savings account - it's literally a checking account that's also a savings account (or a savings account that's also a checking account).

Of course it's also from a fintech and not a bank, so all the caveats about fintech accounts apply.
alan1
  |     |   Comment #22
#20 -- I saw that you can save money in the account and earn interest. But it looks to me like an interest-bearing checking account. You say that it's a checking account "that's also a savings account." I don't think so. Perhaps it's a checking account that you can utilize in a manner similar to how one would utilize a savings account. But please show me something that government regulators would classify this account (or part of the account) as a savings account.

This "checking/savings hybrid account" terminology sounds like something cooked up by fintech types (SoFi/Robin Hood-type crooks and clowns) that has no definable meaning.

But maybe I'm wrong. Does the NCUA or the FDIC or any other government regulator recognize "checking/savings hybrid accounts" as a category of bank (or credit union) accounts? I'm genuinely asking this question -- any help, with citations to relevant government sources, would be much appreciated. Thanks.
deplorable 1
  |     |   Comment #28
One of the main differences would be that you have unlimited withdrawals in this account like a typical checking account. No 6 withdrawal per month limit and not just because of the recent change due to covid-19 either it was specifically designed this way.
GreenDream
  |     |   Comment #30
"But please show me something that government regulators would classify this account (or part of the account) as a savings account."

It's not a bank, banking regulations don't actually apply.

"This "checking/savings hybrid account" terminology sounds like something cooked up by fintech types"

Um, you do realize HMBradley *is* a fintech and *not* a bank? This account literally is something cooked up by fintech types.
GreenDream
  |     |   Comment #32
As for "interest-bearing checking account", they normally don't have high amounts of interest (unless they're rewards accounts, in which case higher interest is generally tied to *spending*). This account isn't that. The interest is higher than is typical of interest-bearing checking accounts and the "rewards" are tied to savings not spending. so No, it's not what one typically gets from an "interest-bearing checking account".
Fan of Website
  |     |   Comment #16
HMBradley is affliated with Hatch Bank, apparently a new fintech owned by Firstrust Bank, started in 1934. They claim to have FDIC insurance. CEO is Zach Bruhnke, who dropped out of business school a dozen years ago to start several tech startups. Current position on LinkedIn described as "Co-founder and Janitor" of HMBradley.

Rates are reset each quarter depending on how much you save out of your employer/external source deposits. Seems like they are pretty clear that ACH transfers in etc. will not count as deposits, so you need a real paycheck or SS income. Apparently you earn only 1.00% on your money for the first quarter until the rate changes. You get the 3% higher rate if you spend less than 75% (aka save at least 25%) of your total deposits over a quarter. Not clear if an ACH transfer of funds out or just debit card transactions count as "spending."

Thanks to D1 for mentioning this. Looks interesting, but the paint is not yet dry on this product, and I would wait a while to see how this sorts out.
GreenDream
  |     |   Comment #23
I suspect any movement of money out of the account counts as "spending". Curious to see if the rate remains 3% after the first quarterly reset.
deplorable 1
  |     |   Comment #24
It's FDIC insured through "Hatch bank" so I'm not worried about that. It looks like you need a real direct deposit but I think it can be low like $1. You can ACH money into the account on top of the DD and according to a Q&A text exchange I read the CSR said would also earn the 3% as well. You need to keep at least 20% of what you deposit every 3 months in order to keep the top rate.
What I wonder about is say you max it out after the first quarter with $100,000 earning 3% everything over that amount earns 0% so you would need to keep all your interest in the account earning 0% or that would count as a withdrawal and drop your rate. Not sure If I'm understanding that correctly or not. All these fintech startups are full of unanswered questions. The Q&A section doesn't address this either.
deplorable 1
  |     |   Comment #25
Right GreenDream the whole discussion is moot if they drop the rate. Think about it they get a bunch of people to sign up for direct deposit and then the quarterly rate resets to the same 1.5% you can get anywhere! lol Then you have all the work to cancel DD and close the account. The same deal can and has happened to various rewards checking accounts though.
Predatory Depositor
  |     |   Comment #29
dp1
Do accounts that require DDs use different definitions of what constitutes a DD?

I assume it would always include a paycheck, pension or a social security deposit. But does it ever include periodic deposits from another FI or some other kind of "DD"?

Also, do you know the definition this FI uses?

Thanks.
deplorable 1
  |     |   Comment #33
I have used a monthly or one time ACH from Discover and Ally demand notes to fulfill the DD requirement for some bank bonuses in the past. HMBradley seems to require a real DD from payroll though which would be difficult to get done during this virus crisis. This is so new I have not seen any data points on what works for DD.
Predatory Depositor
  |     |   Comment #40
I suppose an unemployment check would work. Plenty of those in circulation right now...
Predatory Depositor
  |     |   Comment #41
Hey speaking of demand notes, you probably remember years ago when GE Capital used to have them. There was a time when they were paying a very nice rate and I had quite a bit of them for years.

They shut them down 5 years ago, but Synchrony Bank which is related was offering GE Capital refugees a special 5 beep bonus on any accounts they opened. You had to have come from the GE Capital world.

There were times when Synchrony was competitive so I kept some money there anyway not just because of the bonus, but still it was nice to have. I still have quite a bit of funds there for other reasons and it's paying the bonus on every account I have or new ones that I open to this day. Unfortunately there isn't much else I can recommend them for except to say there's some nice people there for what that's worth.

I think the banking industry in general is not fond of having IRA money deposited in liquid accounts and they have various ways of discouraging it.

One of the ways some FIs do that is to prohibit IRA savings accounts and only allow liquid IRA money to be in lower paying money market accounts. Unfortunately Synchrony is one of them. 0.75% anyone?
deplorable 1
  |     |   Comment #43
Yes I had 3 of those GE interest plus accounts all opened with bonuses. There is also Ford interest advantage, CAT financial powerinvestment and GM right notes. I keep them all open with the minimum because sometimes one or the other has a higher rate.
Sue
  |     |   Comment #42
deplorable 1, HMBradley is a scam, I would never give them a penny, look what they say:

https://faq.hmbradley.com/hc/en-us/articles/360035198252-How-is-my-bonus-calculated-

You have to have verified income by them, before they pay you a penny and that direct deposit must go on on regular bases for a year, from your employer or government agency, any other deposit is excluded form any interest paid. You may deposit $250K and at the end of the year you still have the $250K and not a penny more. Your idea is lousy without reading the fine print before you suggest such adventures.
deplorable 1
  |     |   Comment #44
@Sue: I'm not advocating for them nor have I opened the account just taking a look and trying to decipher the details. I think that link was referring to the bonus they were offering before they launched in order to get folks to sign up. I'm not sure it applies to how the interest will be calculated going forward. I always read the fine print before getting into a new account of any kind. All they have is a FAQ section with very limited details and questions. The cap is $100,000 for the 3% anyway and it pays 0% above that. It would be doable if I could max it out with $100,000 with a $1 direct deposit. I will need to contact them and ask several questions to verify if this is possible or not. Then you have to trust that you get correct answers from the CSR's and we all know how that goes.
Nathan
  |     |   Comment #49
deplorable 1, I talked to them, the $100K you are talking about is the limit for earned and deposited income on monthly bases from salaries. You can not deposit saved money and expect 3% interest on them. The interest is paid only on the money deposited monthly directly form an employer or government department, anything else you deposit, do not earn interest. Sue is correct, it is a scam. The accumulated money from the previous direct deposits in the account, DO NOT EARN ANY INTEREST.
deplorable 1
  |     |   Comment #50
Thanks for the heads up Nathan! I was under the false impression that ACH deposits plus the direct deposit earned 3%. This assumption was based on a text exchange that I read and the CSR said as much. So you are saying that even the accumulated direct deposits for the previous quarter don't even earn interest let alone 3%? Only the direct deposits for the current quarter only earn the 3%? That would be incredibly deceptive on their part and make this a definite no go then. This would be the very definition of a bait and switch.
Bantta
  |     |   Comment #51
deplorable 1, I will confirm, IT IS A SCAM, deception and no disclosure of any kind, they make you find out of the lies after the fact. Only the DD from payroll counts as eligible amount for interest of 3% and only for that month and only for the average daily balance, not on the whole deposit, another way of saying is that without disclosure, they are hiding the true FACTS, stay away!. If you withdraw the whole deposit the next day, the average daily balance will be close to $0.00 and no interest credited for that month.
deplorable 1
  |     |   Comment #53
Thanks for the scam confirmation #51. I knew something wasn't quite right when looking over their FAQ section which is light on details and no actual terms and conditions. They intentionally kept everything vague on purpose to sucker people in. You probably only get to see the terms after they have your information. This is why I have yet to sign up for any of those other wait lists for any of these new fintechs. Particularly after that Robinhood 3% botched roll out. Very shady of them to try and hide the details in such a way.
John
  |     |   Comment #57
deplorable 1, that is not the worst, lets say your payroll is deposited on the 1st of the month, they immediately divide that by the number of days in the month, lets say 30 days, your daily actual average balance is now around $200 or less and if you withdraw $200 or more on a certain day, you have $0.00 balance for that day and no interest is paid. I do not want to go into details, but you can calculate yourself if you ACH out $1000.00, you do not earn interest for the next 5 days and so on. You can ACH in money from other banks, but those money will not earn interest and will not raise the daily balance at all. I agree with everyone who labeled them SCAM artists.
deplorable 1
  |     |   Comment #63
I'm sorry I even brought them up now. I had no idea they would pull these type of shenanigans. They don't count your whole deposit but divide it by the days in the month which has the same effect of cutting 3% down to 1.5%. Say you deposit $3,000 on the first day of a 30 day month they only pay interest on $100 the first day and $200 the second day and so on cutting what you would earn in half. So even to say they are paying 3% is really a lie. What a bunch of frauds.
Joel
  |     |   Comment #69
deplorable 1, #63, if the FAQ is missing, it is not clear, confusing, double meaning, conditional on something, that is a sure giveaway of something fishy is going on, now you know.
Rickny
  |     |   Comment #26
With most institutions things are much clearer. Once I dont see things spelled out clearly or you have to jump through hoops I'll just pass on HMB. Wouldn't want my salary check going into this place.

I have Elements paying me 2.10% until November so no need.

Thanks D1 for bringing this up.
Appalled
  |     |   Comment #34
Re “Ally makes it quick and easy to move your money from your cd to your savings account “ ...ah, ok but then what? In my case, Ally, with no notice or explanation, reversed my electronic withdrawal and froze my account. For two months. When I was finally able to get someone to speak...many calls, emails LONG waits on telephone calls...I was told they couldn’t discuss the matter because I was deceased. They continued to stonewall for six weeks after they were fully informed of my non-deadness, finally responding to my CFPB complaint that there was an inaccuracy in the “public record” of my death . Since no such public or private report exists, I conclude that this was a colossal case of gross negligence compounded by not-my-problem indifference. It cost me considerable anxiety and $275 in lost interest had it made it to the higher yielding account where it was headed when hijacked. (Bottom line from Ally: Tough.) I gather from surfing the internet, that Ally doesn’t take kindly to withdrawals and has a lot of fine print verbiage to cover themselves in case customers object, so I would recommend them only to people who live no more than 30 minutes from their Salt Lake City headquarters.
Choice
  |     |   Comment #36
And your attorney recommends? Small claims court? Newspaper?
Common Cents
  |     |   Comment #37
I can imagine how hard it would be to be reported dead. However, this final comment is incoherent. "Ally doesn't take kindly to withdrawals." Silly.
---
I gather from surfing the internet, that Ally doesn’t take kindly to withdrawals and has a lot of fine print verbiage to cover themselves in case customers object, so I would recommend them only to people who live no more than 30 minutes from their Salt Lake City headquarters.
deplorable 1
  |     |   Comment #38
How is it possible that Ally would think you were dead? That could be easily disproved with a few security questions that nobody else would have access to. Something is missing from this story.
Common Cents
  |     |   Comment #39
Deplorable knows nothing about financial services. Social security master death file.
GreenDream
  |     |   Comment #73
The question is, how did Appalled get in the Social Security Death Index (SSDI)? if indeed that is where the problem stems from (as so far the problem seems related to just this one institution, the jury is still out on if that's what caused his issue here. not saying it isn't, just that that is an assumption at this point, not a definite). And how do you get a "greatly exaggerated" report of your death removed from the SSDI? Because if he's in the SSDI and doesn't get it fixed, it'll be a problem for more than just this one bank. This will just be the tip of the iceberg.

If the SSDI is indeed the "public record" they speak of, then why have they refused to say so when asked precisely what public record?
Appalled
  |     |   Comment #46
Yes, it could be easily disproved and was:.Iprovided all answers to security questions plus a copy of my driver’s license and my most recent electricity bill...and pointed out that I expected to be made whole Unfortunately. I live too far from Salt Lake to go beat on their front door , but I’m considering other options despite their fine print saying depositors can only sue in Utah. They still refuse to say precisely what “public record “ they accepted and why on earth they did so since it could not have corresponded to any of my personal identifying info.
Joel
  |     |   Comment #70
Appalled, and you just realized that, this has been going on since the ancient times, anything goes about money, suing is out of question, their lawyers know all the tricks in the book of how to persuade the judge to be biased against you and evidence can be produced by manufactured facts.
Milty
  |     |   Comment #35
Sun East FCU just announced effective 7/15 no additional deposits into Max-Yield MM account. So, get it while you can.
blazer9
  |     |   Comment #45
2.20% still good? Was a guaranteed rate and till ?
If they're cutting off deposits early, and others catch on with it,
maybe we should be thinking to start funding those add on CDs.
They're getting long in the tooth now that we've had them awhile.
Lucky I will be burdened with CD maturity cash this couple of months.
milty
  |     |   Comment #48
Darn, wished I had learned to read . . . got the date wrong. It is after 6/15 that no additional deposits to Sun East FCU's Max-Yield MM account will be allowed. When I opened my account in March, the APY was 2,05 with a 13 month guarantee. Rates have gotten so low now that one might start losing interest in this mad pursuit.
Tombstone
  |     |   Comment #47
PurePoint Financial cut their savings rate last night to 1.25%, matching PenFed's recent reduction.
Gravesite
  |     |   Comment #56
Thanks Tombstone for that nugget!
Regular Joe
  |     |   Comment #52
This is a great site. Unfortunately, it will become moot to people like me once we no longer use banks to store savings. In fact, I do NOT trust the ones running the show when they say negative rates are not coming "soon". That means to me they will whenever. May be not today or tomorrow but whenever. Having said that, I want to be proactive meaning I want to plan now in how to start taking cash here and there net out of the banks. Any recommendations on how to do so? Over $10K will draw attention. But then again, if I am being investigated for withdrawing my OWN MONEY, so be it.
deplorable 1
  |     |   Comment #54
I see they are back to talking about negative rates again. That would be the worst thing the government could do IMO. Taxing savers while rewarding debtors will encourage only spending and what happens when people have no savings? Why another financial crisis of some kind of course! The savings rate went negative just before the housing crisis and interest rates have not been the same ever since. Yes I have seen Trump's comments on negative rates and no I don't agree with him on that.
Regular Joe
  |     |   Comment #55
I concur with you. We are in the same boat as many who are savers. But what you going to do when when (probably not if) they start charging you on your cash? Keep it in there and pay the bank simply for holding it for you? I cannot tolerate that. I already have CD's but I am not locking up anymore money beyond 2 years now at 1.3-1.5% even if they go to zero in time. Need cash anyway in times like this.
John
  |     |   Comment #58
deplorable 1, I do not worry about negative rates, just take a bank loan as much as possible, lets say a $million or $two and watch your money grows. You can use for collateral your real estate, stocks, bonds, CDs and so on, problem solved.
And when the rates become positive again, just pay the loan(s) at once. It was easy solution.
Deplorable Fan
  |     |   Comment #62
John is right by God!

If anyone can leverage NEGATIVE RATES into massive profit it is Doctor Deplorable!

MORL anyone??
deplorable 1
  |     |   Comment #64
lol yeah and I thought 0% was good how about a reverse interest loan where the bank pays you! It won't be like that though I'm afraid to say they would load the loan up with so many upfront fees you won't be able to break even. Then you would also need to find a place to earn a positive return on that borrowed money. Nope it won't be that easy.
Deplorable Fan
  |     |   Comment #65
Dr D, I would be willing to "seed" a hedge fund with up to $400.00 for you to manage. I think there are many on DA who would do the same!
Matt
  |     |   Comment #66
deplorable 1 #64, you are misinterpreting the usage of negative rates, you do not have to put them in an account that is with positive rates, your money are borrowed from the bank and the bank is paying you back on those borrowed money, not the other way around. What you do with the borrowed money is irrelevant, just keep them around at a par investments or guaranteed principal investments or put the check from the borrowed money in a bank vault. When the reversal in rates comes, give the money back.
GreenDream
  |     |   Comment #72
Matt, negative rates doesn't mean banks will lend *you* money at negative rates. Loans from banks will still have some positive rate, or at worse 0% rate. No, sadly, all it means is that savers will risk having negative rates (IE you'll have to pay the bank to hold your money).
Matt
  |     |   Comment #75
GreenDream, you statement is contradictory, you can not have negative rates on savings and positive rates on loans. If the rates are in negative territory, they are negative across the board. If the banks stop giving loans with negative rates, that will be for a judge to decide. You may be able to cancel the negative rates on your savings, if the bank refuses you a loan with negative rates.
#76 - This comment has been removed for violating our comment policy.
GreenDream
  |     |   Comment #88
Matt, there is no contradiction. Loan rates are always higher than savings rates, otherwise banks wouldn't take in savings because they couldn't make money giving those savings out in loans.

So yes, in theory, your saving rate could be negative while your loan rate is positive. And banks would not give out negative rate loans (except, maybe, as part of a larger deal with a big business, certainly not as a straight up loan to a little guy like you or me) as they'd be losing money on the deal. When have you known any bank to intentionally lose money?

Just look at any bank. Show me one that offers you a normal savings accounts at a higher rate than then the rate on the loans they'll offer you? Currently the average30-year fixed mortgage rate is 3.56% and the average 15-year fixed mortgage is 2.91%. The top savings rates listed here at DA is 1.75% (savings) 2.02% (MMA), and 2.02% (4-year CD) and this with the Fed at 0% - drop all those numbers by 2.5% and what do you get? negative savings across the board with positive loans rates. So sorry Matt, but it's you who doesn't understand how banks work rates.

Now there are reasons why banks would try to avoid negative rates for both savings and loans, so even if the fed went slightly negative, you'd still be able to find a bank that won't charge you a negative rate to hold your money (and they certainly won't pay you to take money from them IE negative loan rate). Remember, the Fed rate is not the rate banks give it's customers. It's the rate banks use for each other. Loans rate typically start near the Prime rate, which is usually 3% higher than the Fed funds rate. (so with fed at 0%, prime is 3% notice those average home loan numbers I quoted early? they range from slightly below to well above the prime 3% rate, notice all those saving numbers quoted above? they're all well below the prime 3% rate - and those are the top savings rate numbers.)
deplorable 1
  |     |   Comment #80
Oh they might give you a -.01% loan while charging you 2% in fees and closing costs. A 0% no fee balance transfer will still be a better deal.
Do not worry
  |     |   Comment #59
Regular Joe, you think that cash will not draw attention, think again, the high tech thieves know who is withdrawing cash and how much, your data will be sold on the black market and expect unexpected visitors from an organized crime syndicate. How are you going to protect the cash, it is a bigger problem than paying into negative rates, just think of it as an additional tax paid and you will be able to deduct it on your income taxes as loses and you will be automatically set into a lower tax bracket, see even Stephen rule comes to mind.
Choice
  |     |   Comment #68
If anyone is currently thinking cash as an alternative...you are about 11years late! The Great R had lessons that should have been learned then!  Thank you fed
GreenDream
  |     |   Comment #91
Regular Joe, even if the Fed was to dip into negative territory, that does not mean that you need to take your money out of the banks for fear of having to pay them to hold your money. Banks want your money, your savings is where banks get the money that they give out in loans. They're not going to "go negative" the instant the Fed dips below 0%, should that ever happen, and if a particular bank does, there will be plenty of other banks eager for your money that won't. The rates they'll give you will be low, possibly even at zero, but they'll avoid negative for as long as possible.

After all, look around, the Fed is at 0% now yet how many banks have dropped their savings rates to zero? can you even name one? I doubt it, as most every bank is offering savings rates that are somewhere above zero (ranging from the next to nothing 0.01% at some brick and mortar banks to the 1.75% that is the current top rate for online savings listed here at DA).

In other words even if the Fed dropped their rates to -0.25% tomorrow, banks, even after cutting their rates as much as possible to follow suit, would still offer not-negative rates (there would be more in the 0 to 0.01% range for certain, but you'd still find banks offering more than that)
#60 - This comment has been removed for violating our comment policy.
#71 - This comment has been removed for violating our comment policy.
Robb
  |     |   Comment #74
Nice move up in stocks today it looks like the SP 500 is starting to breakout of our recent 6 week range.
Milty
  |     |   Comment #77
The great and powerful Fed has spoken: "There Is No Alternative"
#78 - This comment has been removed for violating our comment policy.
deplorable 1
  |     |   Comment #79
Everything I have is way in the green today. The market sure does turn around quickly.
#81 - This comment has been removed for violating our comment policy.
Buckeyes
  |     |   Comment #82
sorry but this is simply your classic rip your face off bear market rally. see me on Friday, a Friday going into a long weekend, to see who is left standing.
deplorable 1
  |     |   Comment #83
Well first folks were saying that it was a dead cat bounce, now it's a bear market rally. Another couple thousand points and it's just a rally and you missed the bottom waiting on the sidelines. To each their own.
Sam Donald
  |     |   Comment #84
I made over $500 today thanks to YOU Deplorable. Thank you!
Buckeyes
  |     |   Comment #85
I'm PLENTY into this market deplorable but i'm never going to be a short seller and basically bet against it.  That's unamerican! . My 401k went up an obscene amount today, I just trust little about this market where I would put cash savings aka new money to work, but I will participate with the 401K and basically just shake my head in amazement when it does go up. I will be happy and probably sell my funds if i can get back to my 1/1 balances. I'm sure that's many peoples game plan. I have a ways to go yet. Gut tells me to go all cash hence my doom Friday comment but I'll wait a bit yet. To me, Bitcoin is safer. To a lot of people, especially the more we devalue our currency.  Of course, it was a great day today.  Will it last, umm, not likely.
Choice
  |     |   Comment #86
Non-CD people rejoice! You all are on the wrong website! Your family will be proud! Stay for the long haul however short that is.
GreenDream
  |     |   Comment #87
Bitcoin? Seriously? It's worse than fiat currency, as at least fait currency is backed by the government, bitcoin is backed by nothing. It'd be safer putting your cash under your mattress than into that scam, IMHO.
Buckeyes
  |     |   Comment #89
Bitcoin has been going up nicely since we started printing money yet again, which is kind of why Bitcoin even exists. Its a hedge against central bank nonsense. If we do indeed go to silly negative rates, you won't be able to own enough of it.

This is a very dangerous market.  Its much more likely to crap 5000 points than go up 5000.  In a month second quarter numbers will roll out and no way has the market priced in those results.  Remember the first quarter had 2 and a half months normal and 2 weeks Covid.    The second quarter will be all Covid.

My school taxes come out this week.   They are projected to go up 25%.  Project that all across New York State and you can easily see how bearish that is.  If Mr. Sam is that excited about going up $500 in one day, I doubt he can stomach it going down $1000 the next.     

As for the CD guy Choice?  Yes right there with you.   I locked a considerable sum into Ally's 13 month select paying 2.1% awhile ago.  If I can earn that sum this year, I'm happy for sure.

Just be careful and don't do anything silly.  And good luck. 
Choice
  |     |   Comment #90
Know NY well...go there a couple times a year...upper NY and would love to visit the City soon! Same with Calif. However those high taxes are driving people out of those states and, consequently, relatively fewer people are congested there. Like Singapore, etc.  Very nice places to visit/live.  I also like upper NY b/c of the “high” property taxes which over the years has dampened property prices...allows family to stay in area ...so in some respects the higher property taxes in upper NY allow for purchase of housing...all relatively speaking...retirement “investment” is not in the house but CDs, et al but not equities!

One final thought on CDs, etc. Retirement? You only have “enough” if you have enough for a surviving spouse. Mentioned that concept last year to a May-December couple in Miami area...they crunched their numbers and figured they needed to move to another part of Florida...they are now seemingly comfortable without hurricane ins, less traffic, lower property taxes, etc. Same for another couple in the Keys...they moved too

Stay safe

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