Best Bank Account Interest Rates - Summary For March 19, 2019

With the Fed anticipated to hold steady on rates for the next several months, internet banks have started to slow down their rate hikes of their savings and money market accounts. In the last two weeks, there were a couple of new promotional accounts with higher rates and a few rate increases, but there were no new ones with yields exceeding 2.50%. Below are the noteworthy savings, money market and checking account rate changes that have occurred in the last two weeks:

• Customers Bank High-Yield Savings (new, 2.50% APY, $25k min)
• MemoryBank Online Money Market (+5 bps to 2.45% APY)
• BBVA Compass ClearChoice Money Market Promo (new, 2.40% APY, $10k min)
• HSBC Direct Savings (+3 bps to 2.25% APY)
• My eBanc Super Saver Money Market (+75 bps to 2.25% APY)
• Colorado Federal Savings Bank Premier Savings (+25 bps to 2.15% APY, $50k min)
• MidFirst Direct High Yield Online Savings (-41 bps to 2.00% APY)

With the addition of Customers Bank’s new 2.50% High-Yield Savings, we now have seven accounts with yields at or above 2.50%. However, many of these accounts have issues.

The rate leader continues to be the Eagle Premium Savings account at Susquehanna Community Bank with a 3.00% APY. This has a few issues. First, this APY requires a large minimum balance of $100k. Balances under this earn much lower rates, and if the balance falls under $25k, a $10 monthly fee is charged. Second, this is only an intro rate for the first six months. Following the initial six-month period, the APY will convert to Prime minus 3.00%, currently 2.53% APY. Prime rate is just 3% above the top range of the federal funds rate. Thus, this won’t rise until the Fed hikes rates.

The account that has the second highest rate isn’t a savings account or money market account. It’s a 13-month no-penalty CD offered by PurePoint Financial Bank. I’m including no-penalty CDs in the liquid summary since they have quite a bit of liquidity.

Third place on the list is the High Rate Savings account at North American Savings Bank. The account has been earning 2.53% APY on balances of $50k to $5 million since early January. One issue with this account is that balances under $50k earn only 0.10%. Second, this 2.53% APY is only guaranteed for the first six months from account opening. Accounts with intro rates rarely stay competitive over the long run.

Fourth on the list is the High Yield Money Market account at Western State Bank. This account earns 2.50% APY on all balances up to $3 million, and there is no monthly maintenance fee. The first issue is that I consider this to be a savings account since it has no check writing capability, but that’s only a minor issue. My main concern is the short account history. We have just been tracking this account since mid February. We’ll have to wait and see if it’ll remain competitive.

The fifth and sixth accounts on the list are the Mega Money Market accounts from All America Bank and its division, Redneck Bank. The main issue with these accounts is that the 2.50% APY only applies to the first $50k. At least customers can open an account at both banks for a total of $100k. Also, the Mega Money Market accounts have a pretty long history of remaining competitive.

In seventh place is the new High-Yield Savings account at Customers Bank. The 2.50% APY on this account requires a minimum balance of $25k. At least this account has no monthly service charge. In July, Customers Bank introduced the Ascent Money Market Savings Account (MMSA) with a 2.25% APY for balances of at least $25k. I’m concerned that the Bank chose to create a new account rather than increasing the rate of its Ascent MMSA, which continues to earn 2.25% APY. At least the Bank is allowing existing customers to open the High-Yield Savings account without any new money requirements.

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, money market funds had yields of around 0.01%. Keeping your cash at internet banks made a lot more sense back then. Now, it’s not so clear. Money market fund yields have been steadily rising as the Fed has been hiking rates.

Vanguard Prime Money Market Fund SEC yield continues to be well over 2%. It had a slight decline in the last two weeks, falling from 2.46% to 2.45%. Fidelity Money Market Fund’s 7-day yield also had a small decline, falling 3 bps to 2.25%.

Allan Roth has a review at AARP of using money market funds to replace savings accounts. He suggests using funds such as Vanguard Federal Money Market and Vanguard Treasury Money Market instead of the Vanguard Prime Money Market Fund. The yields are slightly lower, but they are a little safer due to recent regulation changes. Treasury money market funds have an additional advantage of being exempt from state income taxes.

Municipal money market funds have the advantage of being exempt from federal income tax, but their yields continue to be quite a bit lower than the other money market funds. Vanguard Municipal Money Market Fund now has an SEC yield of 1.55%, which is down from 1.65% two weeks ago.

Reward Checking Accounts

In the last two weeks, there have been no rate or cap changes for the nationally-available reward checking accounts. This is the first week without rate changes since January 22nd. Even though there were no changes to nationally-available reward checking accounts, a few local reward checking accounts had noteworthy rate hikes. These include Dort Federal Credit Union in Michigan (5% APY up to $10k), Reliabank in South Dakota (4.01% APY up to $25k), and Horizon Community Bank in Arizona (3.25% APY up to $25k).

These local reward checking accounts give me hope that reward checking will remain as a competitive alternative to online savings accounts, at least for those with moderate balances. You can earn $500 a year on a $10k balance with a 5% account. That’s $250 more interest than can be earned with one of the above 2.50% savings or money market accounts. You can earn about $1,000 a year on a $25k balance with a 4.01% account. That’s $375 more interest than can be earned with the savings or money market account.

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 will focus on banking news of the week and liquid accounts.

CD Deals: I just wanted to include this reminder of a few noteworthy CD deals that are available.

The best short-term and long-term CD deals continue to be from credit unions.

Mountain America Credit Union has three very competitive terms: 2-year (3.25% APY), 3-year (3.35% APY), and 5-year (3.51% APY). Mountain America calls its CDs Term Deposit accounts. Minimum deposit is only $500. The credit union also offer Term Deposit Plus accounts with the same terms and rates. However, they allow add-on deposits up to a maximum balance of $100k.

Andrews Federal Credit Union is no longer offering its special 3.25% APY 6-month CD. However, it continues to offer an 8-month CD special with a 2.86% APY and a 9-month CD special with a 2.75% APY. They also have one of the top 7-year CD rates (3.45% APY). There had been confusion regarding the early withdrawal penalty (EWP) of this Special 7-year CD. Documentation and CSRs had stated 180 days’ interest. However, they have updated both the small print and the Truth-in-Savings disclosure. Both now state an EWP of 360 days’ interest for this 7-year CD Special.

Navy Federal Credit Union continues to offer a special 6-month CD that earns 3.00% APY. Unlike Navy Federal’s 17-month CD special, this 6-month CD has no maximum deposit. It also does not have the add-on feature. The 17-month CD Special is still available, and it continues to earn a 3.25% APY with unlimited add-on deposits up to a maximum balance of $50k. Navy Federal continues to offer a 40-month IRA CD special. This has a 3.75% APY, and it allows unlimited additional deposits for a maximum balance of $150k. Unfortunately, it’s not available as a regular CD (only an IRA CD).

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.

Checking/Savings/Money Market Accounts:

• Best Savings Account Rates (Nationwide and by State)
• Best Money Market Rates (Nationwide and by State)
• Best Checking Account Rates (Nationwide and by State)

• Noteworthy Accounts Available Nationwide:

Reward Checking Accounts:

• Best Reward Checking Account Rates

• Noteworthy Accounts Available Nationwide:

Certificates of Deposit:

• Best CD Rates (Nationwide and by State)
• Best IRA CD Rates (Nationwide and by State)
• Survey of the Best CD Rates (Nationwide and Local)

Bank Account Alternatives - NOT FDIC Insured

• Investment Discussion Forum

• Series I Savings Bond Purchased from November 1, 2018 to April 30, 2019