Latest Liquid Bank Account Rates

Quite a few online savings accounts had rate increases in the last two weeks. Most of the rates increased by only 20 bps or less. However, there were a few that had large rate increases that exceeded 30 bps. I expect these rate increases will accelerate as we see additional 50-bp rate hikes by the Fed.

The major online banks have been slow with their rate hikes, and the size of most of their rate hikes have been only 10 bps.

Marcus by Goldman Sachs and Ally Bank are two examples.

Ally Bank’s Online Savings account rate was stuck at 0.50% (its all-time lowest rate) since December 2020. On May 11th, Ally finally had a rate increase. The rate increased from 0.50% to 0.60%. Its Money Market account had this same rate hike.

Marcus by Goldman Sachs had the same bottom in 2021. That bottom rate of 0.50% held from November 2020 to last month when Marcus increased the rate to 0.60%. With today’s 10-bp rate hike that increased the rate to 0.70%, its rate remains 10 bps higher than Ally’s.

PenFed is a credit union and not a bank, but it now operates a lot like an online bank, and it is as popular as any online bank with many DA readers. Its online savings account, the Premium Online Savings, had a 10-bp rate increase today that moved the rate from 0.60% to 0.70%. This account reached a bottom rate of 0.45% in March 2021. PenFed started 5-bp rate hikes in October, and in April, the rate had reached 0.60%. It’s nice to see today’s rate increase was 10 bps.

The smaller online banks continue to be more aggressive than the major online banks with their rate hikes. Thirteen of them had rate hikes that increased their APYs to at least 1.00%.

In April, the average online savings account rate had its largest monthly gain since 2019. The average online savings account rate increased 4.0 bps in April, rising from 0.501% to 0.541%. So far this year, the average has increased 8.5 bps.

The average online savings account rate fell slightly in 2021, falling 5 bps from 0.51% to 0.46%. That decline occurred in the first half of 2021. There was no net change in the average from June 1st to January 1st.

Our Online Savings Account Index tracks the average rate of ten well-established online savings accounts.

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

Rate changes from the major online banks:

• CIT Bank Savings Connect (0.60% → 0.90%)
• Live Oak Bank High Yield Online Savings (0.60% → 0.80%)
• Sallie Mae Bank MM (0.65% → 0.75%)
• Marcus by Goldman Sachs Online Savings (0.60% → 0.70%)
• PenFed CU Premium Online Savings (0.60% → 0.70%)
• Ally Bank Online Savings & MM (0.50% → 0.60%)

Rate changes from the less well-known CUs & online banks:

• Bask Bank Interest Savings (0.80% → 1.25%)
• State Bank of Texas Jumbo MM - new money (0.75% → 1.15%)
• Vibrant CU Yellow MM Promo ($200k+ 0.40% → 1.15%)
• Luana Savings Bank Insured MM ($750k+ 0.90% → 1.06%)
• Liberty Savings Bank HY Savings via SaveBetter (0.56% → 1.06%)
• CFG Bank High Yield MM (0.82% → 1.02%)
• Salem Five Direct eOne Savings (0.40% → 1.01%)
• Patriot Bank via SaveBetter MMDA (0.70% → 1.01%)
• USALLIANCE Financial CU High Dividend Savings (0.65% → 1.00%)
• First Foundation Bank Online Savings (0.65% → 1.00%)
• My Banking Direct High Yield Savings (0.77% → 1.00%)
• BrioDirect High-Yield Savings (0.40% → 1.00%)
• Langley FCU Platinum MM ($1m 0.75% → 1.00%)
• CFSB Premier Savings (0.70% → 0.90%)
• LendingClub Bank High-Yield Savings (0.70% → 0.85%)
• Ivy Bank High-Yield Savings (0.70% → 0.85%)
• CFG Bank High Yield MM (0.80% → 0.82%)
• CFSB High Yield Savings (0.60% → 0.80%)
• Citizens Access Online Savings (0.50% → 0.75%)
• Popular Direct High Rise Savings (0.50% → 0.75%)
• DollarSavingsDirect Savings (0.35% → 0.75%)
• EmigrantDirect Savings (0.35% → 0.75%)
• Valleydirect Online Savings (0.70% → 0.75%)
• CIBC Bank USA Agility Savings (0.62% → 0.72%)
• SFGI Direct Savings (0.51% → 0.71%)
• TotalDirectBank Direct MMDA (0.50% → 0.60%)
• Wings Financial CU High YIeld Savings (0.45% → 0.55%)
• MySavingsDirect Savings (0.25% → 0.50%)

Update 5/19/2022: Post publication rate changes:

• Synchrony Bank High Yield Savings (0.60% → 0.85%) on 5/19
• Valleydirect Online Savings (0.75% → 0.80%) on 5/19

Current rate leaders

The 1% club had a large expansion with the addition of 13 online savings or money market accounts with APYs of at least 1.00%. I’ll soon have to create a more exclusive club, such as the 1.25% club. Perhaps by the end of the year, I’ll be creating a 3% club.

My definition of the 1% club are institutions that are offering a yield of at least 1.00% on their liquid bank accounts with no small balance limitations and no activity requirements to qualify for the high rate.

SoFi Bank Checking and Savings account now shares the top spot with the Bask Bank Interest Savings. Both have a yield of 1.25%. On May 5th, the Bask Bank Interest Savings yield increased 45 bps to 1.25%. This applies to all balances, and unlike the SoFi Bank account, there are no direct deposit requirements.

The next highest yield is 1.15% at State Bank of Texas and Vibrant Credit Union.

The Jumbo Money Market account at State Bank of Texas had a 40-bp rate increase on Friday. No interest is paid for balances under $100k, and the 1.15% APY only applies to new money.

Vibrant Credit Union has started offering promotional tiered rates on its Yellow Money Market account that range from 1.15% APY for balances of at least $200k to 0.10% APY for balances of $10k to under $25k.

Connexus Credit Union’s Money Market Account has the third highest rate (1.11% APY). This requires a balance of at least $100k. Balances that range from $20k to under $100k earn 1.00% APY, and balances from $1k to under $20k earn 0.25% APY.

Both Vibrant and Connexus have easy membership requirements that make it possible for people in any state to join the credit union.

For savings accounts that don’t require large balances to earn a 1%+ yield, the one with the third highest rate (after SoFi Bank and Bask Bank) is Liberty Savings Bank via SaveBetter. Through the SaveBetter platform, Liberty Savings Bank is offering its High Yield Savings account that earns 1.06% APY on all balances of at least $1. For more details about this account, Liberty Savings Bank and the SaveBetter platform, please refer to my Liberty Savings Bank savings account review.

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. These promotions had dried up during the pandemic, but they have started to return as rates have started to rise. Of course, when rates are rising, the rate guarantee has much less value.

Sun East FCU has improved its MAX-Yield Money Market Account Special by adding a 1.00% APY with a 15-month guarantee period. The old one had only a 0.60% APY. Maximum balance is $250k.

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 four years, and they are something to consider, especially if you already have a savings account at the bank.

Some banks like Ally Bank 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

The rates of no-penalty CDs are finally starting to rise. Four no-penalty CDs in the list below had rate increases in the past two weeks. Two of these four increased their yields to at least 1.00%. We now have four no-penalty CDs with yields of at least 1.00%.

CFG Bank is one of the two that increased its no-penalty CD yield to 1%+. It now has a 1.07% APY on its 13-month term no-penalty CD, what it calls the Penalty Free CD.

The other bank in this group is Colorado Federal Savings Bank (CFSB). On Friday, its 11-month No Penalty CD yield increased 25 bps to 1.00%.

Ally Bank is the largest bank to increase its no-penalty CD rate. On Friday, the rate increased 10 bps to 0.70%. That was just a week after a 10-bp rate hike. Before that May 6th rate hike, the rate had been stuck at 0.50% since December 2020.

I just realized today that the Ally No-Penalty CD had its 13-year anniversary this month. Ally first launched the No-Penalty CD in May 2009. At that time, it had a 9-month term and a 2.50% APY.

Since Ally introduced its No-Penalty CDs 13 years ago, several other online banks have introduced their own no-penalty CDs. The latest one is Synchrony Bank which has pretty much copied the Ally no-penalty CD model with an 11-month term and the same early closure functionality (full closure only after the first six days.) Synchrony’s No-Penalty CD also happens to currently have the same rate (0.70% APY). Update 5/19: Synchrony 11-month No-Penalty CD APY increased from 0.70% to 0.90%.

USALLIANCE Financial Credit Union’s 11-month No Penalty CD remains on top with a 1.25% APY.

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.

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. Their rates tend to be close to zero when the Fed sets the target federal funds rate to 0%, and they tend to follow the target federal funds rate during a rate-hiking cycle.

Before March, the four money market funds that I have followed have maintained a 7-day yield of only 0.01%. Now that the Fed has started hiking rates, money market fund yields are rising, with yields close to the yields of many online savings accounts. These may soon top the highest online savings account rates after the next one or two Fed rate hikes.

The Vanguard Federal Money Market Fund now has the highest yield. In the last two weeks, its 7-day yield increased from 0.26% to 0.65%.The Vanguard Municipal Money Market Fund isn’t far behind. Its 7-day yield increased from 0.32% to 0.63%.

Fidelity’s money market funds continue to lag Vanguard. Nevertheless, Fidelity did finally make significant rate increases.

In the last two weeks, the 7-day yield of the Fidelity Money Market Fund increased from 0.07% to 0.48%. The Fidelity Municipal Money Market Fund 7-day yield increased from 0.26% to 0.42%.

Reward Checking Accounts

For the nationally-available reward checking accounts, there were no changes in the last two weeks.

Overall, reward checking accounts have generally held up better in a zero-rate environment than online savings accounts. However, we will probably see fewer rate hikes as interest rates rise. If or when online savings accounts eventually rise above 2%, many reward checking accounts with top rates stuck at or below 2% will become much less appealing for savers.

Most reward checking accounts have fairly small balance caps and won’t provide much earnings on large balances. However, there are a couple nationally-available ones in which you can earn high rates on fairly large balances. Below are two of these accounts.

In the list below I added the blended APY for a $100k balance.

• Quontic Bank High Interest Checking: 1.01% APY up to $150k, 0.35% APY $150k+ to $1m (1.01% APY for $100k balance)
• Presidential Bank Advantage Checking: 2.25% APY up to $25K, 0.75% on portion above $25k (1.13% blended APY for $100k balance)

There are several reward checking accounts in which you can earn a relatively high APY on a large balance of $100k to $250k. All of these are only available to certain regions of the nation. To earn a high rate on a large balance requires that you also open a reward savings account with the reward checking account. The blended APY of the reward checking/savings combo can be over 1% for large balances. I’ve created this table to keep track of these checking/savings combos that offer a relatively high blended APY on large balances. Most are under the Kasasa brand and have the names of Kasasa Cash (checking) and Kasasa Saver (savings.)

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 publish my CD survey as a separate post. Please refer to my survey of the best CD rates. This recap focuses on liquid accounts, but I’ll include a few of the best CD deals.

CD Deals: For direct CDs that are nationally available (without any membership limitations), Connexus Credit Union now has the highest rates for terms of one to five years. Connexus just increased these CD rates today. Below is a list of these new rates by term:

• 5-year: 3.21% APY
• 4-year: 3.11% APY
• 3-year: 3.01% APY
• 2-year: 2.86% APY
• 1-year: 2.26% APY

I’ll be publishing a blog post on these new rates soon.

For banks with nationally available CDs, KS StateBank is on top with the highest rates. Below is a list of these rates by term:

• 5-year: 3.00% APY
• 4-year: 2.90% APY
• 3-year: 2.85% APY
• 2-year: 2.60% APY
• 18-mo: 2.30% APY
• 1-year: 2.00% APY

For more details, please see my review of KS StateBank and these CDs.

For the major online banks, the two best mid-term CD deals are Synchrony Bank’s 16-month CD Special (1.85% APY) and Ally Bank’s 20-month Select CD (2.00% APY). Update 5/19: Synchrony 16-month Special CD APY increased from 1.85% to 2.00%.

For terms under one year, NASA FCU has the best deal with a 1.60% APY on a 9-month term (see review).

If you’re looking for CDs, you should also consider Treasury bills and notes. Their yields have gone up considerably in the last month, and now they have yields higher than CD yields for maturities from six months to ten years. Please refer to this Treasury page for the latest Treasury yields.

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 18, 2022

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)

*New to Summary

No-Penalty CDs

*New to Summary

Reverse Tier Savings/Money Market Accounts/Checking:

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 - May Not Be FDIC Insured

• Investment Discussion Forum

• Series I Savings Bond Purchased after May 1, 2022

Post Publication Edits:

5/19/2022: Synchrony Bank High Yield Savings rate increased.
5/19/2022: Synchrony Bank 11-month No Penalty rate increased.
5/19/2022: Valleydirect Online Savings rate increased.