Best Bank Account Interest Rates - Summary For September 14, 2021

Since the start of September, there have been just a few noteworthy rate changes on savings, money market and standard checking accounts. There were actually more noteworthy rate changes to reward checking accounts. Those changes are covered in the reward checking section below.

For the savings and money market accounts, all were rate cuts, except for one. Sallie Mae Bank increased the rate of its money market account from 0.45% to 0.50%. Sallie Mae Bank had a pretty long history of keeping this account competitive with online savings accounts. However, that changed in late 2020 and early 2021. By January 2021, the rate had fallen to 0.40%, which was well below the online savings account average rate. The rate remained at 0.40% until last month when it went up to 0.45%. The latest rate hike now moves the money market rate back above the average rate.

The only other noteworthy rate change was at Vio Bank, which has a 3-year history of maintaining an online savings account with rates that have remained above the average online savings account rate. Its online savings account rate remains above the average, but with a rate of 0.51%, its lead has shrunk. But that’s not the account with the rate cut. Vio Bank’s Cornerstone Money Market account had a small rate cut that lowered the rate from 0.56% to 0.55%. Vio Bank introduced this account in April with a 0.61% rate. I don’t like it when online banks introduce new accounts without any significant differences in features. These new accounts allow banks to promote higher rates while most of their deposits reside in the old accounts with lower rates.

For September, our Online Savings Account Index, which tracks the average rate of ten well-established online savings accounts, had no change. The average remains at 0.446%. This rate has been falling slowly in 2021. When 2021 started, the Index was at 0.512%.

I’ve listed the most noteworthy rate changes that have occurred in the last two weeks. I created 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:

• Sallie Mae Bank Money Market (0.45% → 0.50%)

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

• Vio Bank Cornerstone Money Market (0.56% → 0.55%)
• NASA FCU Premier Advantage MM ($100k+, 0.50% → 0.45%)
• Blue FCU Sky High Savings - Online (0.45% → 0.35%)
• UmbrellaBank Money Market (0.36% → 0.31%)
• CapEd CU Money Market Checking ($250k+, 0.40% → 0.30%)
• Envision Bank Savvy Savings (0.25% → 0.21%)

Current rate leaders

Just three liquid accounts remain in the 1% group. These are savings, money market or standard checking accounts that have at least a 1% APY without any small maximum balance limits. This group hasn’t changed since July when Connexus’ Money Market left the group after its rate cut.

The institution with the highest liquid account in this 1% group is now Advancial Credit Union. Its Premium Money Market continues to offer 1.01% APY for balances of at least $100k. Unfortunately, Advancial’s field of membership doesn’t always include a way for people in any state to join. There have been times in the past when Advancial allowed people from any state to join via an association membership. There have also been times when Advancial did not provide this option. Unfortunately, Advancial is back to not providing this membership option. This is based on recent reports by readers. Please see this blog post for more details.

There are two fintechs that partner with banks that continue to offer 1.00% APY on their checking accounts. They have no balance limitations and no activity requirements to qualify for the high rate.

The most recent fintech to be in the 1% group is M1 Finance. This is a brokerage firm and robo-advisor which also offers a checking account called M1 Spend. M1 Finance has partnered with Lincoln Savings Bank which holds the deposits and allows deposits to be FDIC insured. The Spend account has two options: basic and plus. The basic account offers no interest. The plus account offers 1% APY on all balances. The downside with M1 Plus is a $125-per-year maintenance fee that can’t be waived. However, it’s currently waiving this fee for the first year.

The other fintech that is still in the 1% group is T-Mobile Money. Like M1 Finance, T-Mobile Money offers a checking account that earns 1% APY on all balances without any activity requirements. Unlike M1 Finance, T-Mobile Money Checking Account has no monthly service fees. T-Mobile has partnered with BankMobile, which has partnered with Customers Bank, to hold the FDIC-insured deposits (As of January 4, 2021, BankMobile is no longer a division of Customers Bank.) The Checking Account can actually be considered a reward checking account since you can earn 4% APY on up to $3k if activity requirements are met. The requirements to earn 4% APY on up to $3k include: 1) enrolled in a qualifying T-Mobile postpaid wireless plan; 2) registered for perks with your T-Mobile ID; and 3) at least 10 qualifying purchases using your T-Mobile MONEY card (This requirement replaced direct deposit.) The portion of the balance above $3k earns 1.00% APY. Also, the entire balance earns 1.00% APY if the above requirements are not met. Since the 1.00% APY can be earned without meeting any activity requirements, I’ve included the account in the savings/money market category.

One major downside with both M1 Finance and T-Mobile Money is that neither allows joint accounts or accounts with POD/ITF beneficiaries. Unfortunately, this is typical with many fintech bank accounts.

In July, Connexus Credit Union lowered its top-tier rate on its money market account from 1.00% to 0.85% for balances of at least $100k. This is now the highest rate for banks and credit unions not in the 1% group. The rates for smaller balances are now 0.60% APY ($20k) and 0.25% APY ($1k). Balances under $1k earn no interest. One important change is that there is no longer an active checking account requirement to qualify for these money market rates. Readers with existing accounts have reported that they have been notified that they can earn the old rates through October 1, 2021 if they maintain their active checking accounts. Starting in October, the above new rates will apply without any checking requirements.

The highest rate on a non-promotional and nationally-available liquid account that’s directly available from a bank is the ZYNLO Bank money market account. This account has a rate of 0.80% for balances up to $250k, and the minimum opening deposit is only $10. ZYNLO Bank had offered a promotion with a 1.25% APY, but that promotion ended in March. Please refer to my ZYNLO Bank money market review for more details.

New-To-Summary (NTS) savings or money market accounts

The only new savings/money market account added this week was the Cornerstone Money Market account from Vio Bank. DA began tracking this account in April when the rate was 0.61%. The rate is now 0.55% after rate cuts on August 3rd and September 3rd. Its rate is now only 4 bps above Vio Bank’s online savings account (0.51%).

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 specials have dried up. TIAA Bank was the last one to offer a rate guarantee, but that has ended. TIAA Bank’s Yield Pledge Money Market account no longer has a 1-year intro rate for new customers. There’s now just the ongoing rate which remains at 0.40% for all balances under $10 million.

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

Some banks like Marcus by 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

The main issue now is that their rates have been falling. Many now have rates lower than the bank’s savings account. The only reason to open a no-penalty CD with a rate that’s lower than the savings account rate is if you believe the savings account rate will fall below the no-penalty CD rate. Even if that occurs, you may earn more in the savings account if the rate falls slowly.

I’ve moved the list of no-penalty CDs into a new table below.

None of the no-penalty CDs listed below had any rate changes in the last two weeks.

CFG Bank’s 13-month Penalty Free CD remains on top with a 0.62% 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. 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 have fallen back to 0.01%.

The 7-day yield of both the Fidelity Money Market Fund and the Fidelity Municipal Money Market Fund remains at 0.01%. This has held steady now for the last several months.

The 7-day yield of the Vanguard Federal Money Market Fund is now at 0.01%. This had been 0.02% in January. The Vanguard Municipal Money Market Fund yield remains at 0.01%.

Reward Checking Accounts

Reward checking account rates have been falling but there haven’t been widespread cuts that we’ve seen with online savings accounts. However, the cuts picked up in the last two weeks.

Three of the reward checking accounts that offer competitive rates on large balances had cuts. In addition, there were cuts on three reward checking accounts that have been on the low side of rates for quite some time. Two of the reward checking had rate cuts, and the other had a balance cap reduction ($25k to $15k).

There was also a new nationally-available reward checking account that was added to the list. It’s the Community Advantage checking account from the Tennessee-based Community Bank. The account offers a top rate of 2.08% APY on balances up to $20k. The rate falls to 0.25% for the portion above $20k. Please see this account review for more details.

Quontic Bank is the first large-balance reward checking with rate and cap changes. The only rate cut was on the second tier rate. It’s now 0.35%, down from 0.65%. Also, there was a cap change. Balances up to $150k now earn 1.01% APY. This had been $100k. Lastly, Quontic Bank has implemented blended APYs. So now when your balance exceeds the tier, only the portion of the balance above the tier earns the lower rate. The portion of the balance up to the tier earns the higher rate. Previously, the entire balance would earn the lower rate. The net effect of these changes is that customers will earn more interest for balances over $100k. For example, before this change, balances over $100k and under $250k would earn 0.65%. Now, balances between $100k and $150k earn 1.01% APY, and balances between $150k and $250k earn a blended APY that ranges from 1.01% to 0.75% APY.

For the second large-balance reward checking account, the changes only lower the interest that can be earned. Presidential Bank lowered the rate for the portion of the balance above $25k from 0.65% to 0.40%. The top rate for balances under $25k remains the same (2.25% APY).

Lastly, Axos Bank implemented the change of its Rewards Checking account for new accounts. The maximum APY has fallen to 1.00% (had been 1.25%), and this top rate will only apply to balances up to $50k (had been $150k). In addition, there are major changes to the requirements to qualify for the 1.00% APY. For existing customers, these changes take effect on October 1st. For more details, please refer to this new Axos Bank Rewards Checking review.

Overall, reward checking accounts have generally been more resistant to Fed rate cuts than online savings accounts. They’re not immune to cuts. 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.

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

In the list below I added the blended APY for a $100k balance. For the combo account, this assumes that the funds are spread between the two accounts to maximize the APY. Due to the Axos Bank Rewards Checking account changes, I’ve removed it from the list below.

• ECCU Kasasa Cash Checking: 3.00% APY on up to $10k and Kasasa Saver: 1.00% APY on up to $100k (1.20% blended APY for $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)
• Nokomis Savings Bank Kasasa Cash: 2.00% APY up to $25k and Kasasa Saver: 0.50% APY on up to $100k (0.88% blended APY for $100k balance)
• Presidential Bank Advantage Checking: 2.25% APY up to $25K, 0.40% on portion above $25k (0.86% blended APY for $100k balance)

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: Abound Credit Union remains on top for the highest CD rate at a nationally-available institution. Its 47-month CD Special rate recently fell from 1.45% to 1.40% APY, but the 1.40% APY is still the highest nationally-available rate for any CD maturity length. In previous months, NASA Federal Credit Union’s 49-month CD Special held this top spot, but the NASA FCU’s Special rate fell in August from 1.35% to 1.15% APY. For more details, please refer to this Abound CD review and this NASA FCU CD review.

Quorum Federal Credit Union introduced a 30-month CD Special with a 1.00% APY. Minimum deposit is only $1k. The rate increases to 1.10% APY for a $100k minimum deposit.

USALLIANCE Financial Credit Union now holds the top spot for mid-term CD rates. Its 18-month CD Special rate was increased from 0.85% to 1.00% APY. Minimum deposit is only $500.

Consumers Credit Union offers the same rate on its 20-month CD (1.00% APY), but this requires a $250k minimum deposit. Other rates include 0.90% APY for a $100k minimum deposit and a 0.80% APY for a $250 minimum deposit.

For 1-year CDs, Abound Credit Union’s 13-month CD Special is tied with Lafayette Federal Credit Union’s 1-year CD for the top rate. Both have a 0.80% APY.

For terms under one year, Veridian Credit Union offers the highest rate. Its 9-month Jumbo CD Special has a 0.85% APY ($100k minimum), and its standard CD Special has a 0.75% APY ($500 minimum).

Ally Bank continues to offer a 14-month Select CD with a 0.60% APY.

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 September 14, 2021

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)

No-Penalty CDs

Reverse Tier Savings/Money Market Accounts/Checking:

Reward Checking Accounts:

• Best Reward Checking Account Rates

• Noteworthy Accounts Available Nationwide:

*New To Summary, as of Septmber 14, 2021

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, 2021