Best Bank Account Interest Rates - Summary For May 14, 2019

This was another week with only a few rate changes on savings and money market accounts. Unfortunately, one was a rate cut. Most of the internet banks have kept their savings account rates unchanged since early this year. This will likely continue as long as the Fed holds rates steady. Below are the noteworthy savings and money market account rate changes that have occurred in the last two weeks:

• Investors eAccess 6-mo No Penalty CD (new, 2.50% APY, $500 min)
• USALLIANCE Financial High Dividend Savings (+3 bps to 2.50% APY, $500 min)
• CIT Bank Savings Builder (-5 bps to 2.40% APY, $25k min or $100/mo deposits)
• BMO Harris Platinum Money Market (+30 bps to 2.35% APY, $5k min)
• HSBC Direct Savings (+5 bps to 2.30% APY, $1 min)

CIT Bank lowered the rate of its Savings Builder account from 2.45% to 2.40% APY. CIT Bank had held steady with the 2.45% APY since early January. Compared to other of the large, well-established internet banks, this 2.45% was on the high end. So it’s not a surprise that CIT Bank reduced this rate. Based on CIT Bank’s history, we may see more rate cuts on this account.

Two large banks increased the rates of their online accounts. The large regional bank, BMO Harris, made a large rate increase (30 bps) on its Platinum Money Market account. This is a new online money market account that BMO Harris recently introduced. The other large bank that increased its online account rate was HSBC’s online division, HSBC Direct. The HSBC Direct Savings account had a small rate gain of 5 bps to 2.30% APY.

Two more accounts joined the 2.50% club. The easy-to-join credit union, USALLIANCE Financial, increased the rate of its High Dividend Savings account from 2.47% to 2.50% APY. USALLIANCE Financial launched this account at the start of the year with a 2.30% APY, and it has been hiking rates at the start of every month. One issue with this account is that there is a $5 fee for any withdrawal.

The other account that joined the 2.50% club is the new 6-month No Penalty CD from Investors eAccess. The CD functions just like the no-penalty CDs from Ally and PurePoint Financial. It just has a shorter term, which is not a benefit for these no-penalty CDs. Investors eAccess also offers 2.50% APY on its eAccess Money Market Account, which has been in effect since April 1st. The 2.50% APY applies to all balances up to $2 million, and there are no monthly fees. Unlike the No Penalty CD, the rate isn’t guaranteed. That’s the only advantage of the No Penalty CD. One important downside is the difficulty accessing funds when the CD is closed. The bank’s FAQs only list one option to receive the funds: they mail you a check.

The top spot continues to be held by Susquehanna Community Bank’s Eagle Premium Savings account, which earns 2.53% APY for balances of at least $100k. The rate is based on the Prime rate minus 3%, and the Prime rate is 3% above the upper range of the federal funds target rate. The downside is that this 2.53% APY requires a $100k minimum balance. The rate plummets to 0.35% for balances between $25k and $100k. There are also other downsides with this account as described in this account review.

Nine liquid accounts now share second place with a 2.50% APY. Investors eAccess joins PurePoint Financial with its no-penalty CD. USALLIANCE Financial’s High Dividend Savings account joins Customers Bank’s High-Yield Savings Account as the only two savings accounts with a 2.50% APY. The other five accounts are money market accounts.

Out of these nine 2.50% liquid accounts, I would consider the eAccess Money Market account from Investors eAccess and the High Yield Money Market account from Western State Bank to be the best two deals. Neither has a minimum balance requirement. All balances up to a very large balance qualify for the 2.50% APY, and there are no monthly maintenance fees. Both are fairly new accounts, so it’s still questionable if these accounts will remain competitive over the long run.

The two 2.50% liquid accounts that have the best chance of maintaining the 2.50% are the Mega Money Market accounts of All America Bank and Redneck Bank, a division of All America Bank. Both have a long history of maintaining very competitive rates. The primary downside is a balance cap of $50k. Only balances up to $50k qualify for the 2.50% APY. The portion of the balance above $50k only earns 0.50%.

There are many accounts now with yields between 2.40% and 2.50%. Comenity Direct’s High-Yield Savings account is the latest addition to this group.

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 risen substantially as the Fed hiked rates. However, their yields are starting to fall in this current environment.

Vanguard Prime Money Market Fund SEC yield continues to be well over 2%. It had a slight rate decrease in the last two weeks, falling from 2.44% to 2.43%. Fidelity Money Market Fund’s 7-day yield also had a small decrease, falling 2 bps to 2.20%.

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. Two weeks ago, I reported on a big yield increase of Vanguard Municipal Money Market Fund. As one reader noted, these rate increases usually don’t last, and that was the case. The yield fell from 2.01% to 1.63%. However, the Fidelity Municipal Money Market Fund had a big yield gain this time. From two weeks ago, the yield increased from 1.26% to 1.86%. We’ll see next time if this yield falls like Vanguard did.

Reward Checking Accounts

In the last two weeks, we just had two changes to my list of nationally-available reward checking accounts. First, Partner Colorado Credit Union increased the rate of its High Interest Checking from 3.00% to 3.50% APY for balances up to $10k. It’s still not close to the new deal that I reported on last month from TAB Bank. Its Kasasa Cash account, which earns 4.00% APY on balances up to $50k, continues to be the best reward checking account in the nation.

The other change is the removal of the Kasasa Cash account from The State Bank in Michigan. This used to be nationally available, but the bank recently started to limit applications to Michigan residents. The account still earns 2.50% APY on balances up to $50k.

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 liquid accounts.

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

CD Bank continues to offer the best rates on nationally-available CDs with terms of 12-month (3.00% APY), 18-month (3.10% APY), and 24-month (3.20% APY). Minimum deposit is $10k

CD Bank also has a very competitive 6-month CD that earns 2.75% APY, but the top short-term CD that’s nationally available continues to be the 8-month CD special at Andrews Federal Credit Union (2.86% 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.

Connexus Credit Union raised the rates on its Share Certificates last week, making its 60-month Certificate (3.40% APY) the rate leader for nationally available 5-year CDs. The minimum opening deposit is $5k, with no stated balance cap. The early withdrawal penalty is 365 days dividends on the amount withdrawn.

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 - May Not Be FDIC Insured

• Investment Discussion Forum

• Series I Savings Bond Purchased from May 1, 2019 to October 31, 2019

Accounts Removed, No Longer Available Nationwide

Post Publication Edits

5/16/2019: WebBank High-Yield Savings rate raised.