Best Bank Account Interest Rates - Summary For April 20, 2021

In the last two weeks, Synchrony was the only major online bank to lower its savings or money market rate. Its High Yield Savings account rate fell from 0.50% to 0.40%. I’m hoping that the other major online banks won’t follow Synchrony and other major online banks that have already cut their savings account rates to 0.40% (including Capital One, Barclays, American Express, Discover, PurePoint Financial, FNBO Direct, and Citizens Access). We’ll see how long Ally, Marcus, and a few other major online banks will hold on to their 0.50% rates.

In addition to Synchrony, a few of the smaller online banks lowered their savings, checking or money market rates in the last two weeks. Most continue to have rates that are above the average online savings account rate. Most of the smaller online banks often launch with above-average rates that last for a few months, but many will typically fall close to the average over the long run. The best ones like SFGI Direct, Vio Bank and Live Oak Bank will be able to maintain above-average rates for multiple years. However, even these will rarely maintain rates that are significantly above the average.

The average online savings account rate was 0.47% on April 1st. This is based on our online savings account index which is the average rate of ten well-established online savings accounts. The average has been falling since the start of the pandemic, but the decline has been slowing in the last few months.

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:

• Synchrony High Yield Savings (0.50% → 0.40%)

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

• Paramount Bank Interest Checking (0.85% → 0.75%)
• CFG Bank High Yield Money Market (0.66% → 0.62%)
• Popular Direct Select Savings (0.55% → 0.50%)
• MutualOne Bank Online Savings (0.45% → 0.40%)
• ableBanking Money Market Savings (0.50% → 0.35%)

Current rate leaders

Only four 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.

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

The other two accounts in the 1% group are from credit unions.

The latest 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.

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.

The other two institutions in the 1% group are credit unions with easy membership requirements that allow people in any state to join.

The first credit union is Advancial. Its Premium Money Market continues to offer 1.01% APY for balances of at least $100k. This isn’t a new account or rate. Advancial hadn’t been listed in past summaries due to uncertainties in its field of membership being open to people in any state. Those uncertainties have returned. Readers have recently reported that Advancial has gone back to adding roadblocks for people outside its local areas to join. Please see this blog post for more details.

For a non-promotional rate, the highest rate for a liquid account continues to be the money market account from Connexus Credit Union which has a 1.15% APY on balances of at least $100k. Lower tiers include 1.00% APY ($50k), 0.75% APY ($20k), 0.60% APY ($10k), and 0.50% APY ($1k). To qualify for these rates, the member must also maintain an active checking account. I have more details about the Connexus Money Market account in this post on finding 1%+ liquid accounts in 2021.

Paramount Bank’s Checking Account rate is no longer the highest rate for a non-promotional liquid account that’s directly available from a bank. The rate dropped from 0.85% to 0.75%.

The new leader in this category now goes to ZYNLO Bank’s money market account. This account has a rate of 0.80% for all balance, and the minimum opening deposit is only $10. ZYNLO Bank had offered a promotion with a 1.25% APY, but that promotion ended last month. Please refer to my ZYNLO Bank money market review for more details.

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 year, 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.

This was another two-week period without a rate cut on the no-penalty CDs. This has become common this year.

CFG Bank’s 13-month Penalty Free CD remains on top with a 0.62% APY. Rising Bank’s 15-month No Penalty CD is just a little behind with a rate of 0.60%. There is a potential issue with the Rising Bank No Penalty CD. According to the disclosure, interest is credited every three months, and if you close your account before interest is credited, you will not receive the accrued interest. I’m checking with Rising Bank to confirm this. More details are described in the post and in the comments of this Rising Bank No Penalty CD review.

• 0.62% APY 13-month Penalty Free CD ($500 min) - CFG Bank
• 0.60% APY 15-month No Penalty CD ($1k min) - Rising Bank (May have some penalties. See above.)
• 0.55% APY 11-month No EWP CD ($500 min) - USALLIANCE Financial CU
• 0.55% APY 8-mo No-Penalty CD for AARP members ($500 min) - Marcus by Goldman Sachs
• 0.50% APY 11-month No Penalty CD (no min) - Ally Bank
• 0.45% APY 11-month No Penalty CD ($1 min) - Continental Bank via SaveBetter.com
• 0.45% APY 7-month No-Penalty CD ($500 min) - Marcus by Goldman Sachs
• 0.45% APY 11-month No Penalty CD ($5k min) - Colorado Federal Savings Bank
• 0.40% APY 11-month Flex Time Deposit ($100k min) - My eBanc
• 0.40% APY 3-month No Penalty CD ($1 min) - Continental Bank via SaveBetter.com
• 0.35% APY 11-month Flex Time Deposit ($10k min) - My eBanc
• 0.35% APY 11-month No-Penalty CD ($500 min) - Marcus by Goldman Sachs
• 0.30% APY 11-month No-Penalty CD ($1k min) - CIT Bank
• 0.30% APY 9-month No Penalty CD ($1 min) - Central Bank of KC via SaveBetter.com
• 0.25% APY 13-month No-Penalty CD ($500 min) - Marcus by Goldman Sachs
• 0.25% APY 6-month No-Penalty CD ($500 min) - Investors eAccess
• 0.15% APY 11-month No-Penalty CD ($10k min) - PurePoint Financial
• 0.10% APY 13-month No-Penalty CD ($10k min) - PurePoint Financial
• 0.10% APY 14-month No-Penalty CD ($10k min) - PurePoint Financial
• 0.05% APY 11-month Liquid CD ($5k min) - Citizens Access

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. There were no noteworthy rate cuts on any nationally available reward checking accounts in the last two weeks.

No nationally-available reward checking accounts had rate or balance cap reductions in the last two weeks. However, I just noticed a change to the Quontic Bank High Interest Checking Account that is scheduled to take effect on May 17, 2021. According to Quontic’s website, the following tiered rates will apply when activity qualifications are met:

• 1.00% APY on up to $100k
• 0.65% APY on $100k+ to $250k
• 0.35% APY on $250k+ to $1 million

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. Here are four:

• ECCU Kasasa Cash Checking: 3.00% APY on up to $10k and Kasasa Saver: 1.00% APY on up to $100k
• Presidential Bank Advantage Checking: 2.25% APY up to $25K, 0.65% on portion above $25k
• Axos Bank Rewards Checking: 1.25% APY up to $150k
• Quontic Bank High Interest Checking: 1.00% APY up to $100k, 0.65% APY $100k+ to $250k, 0.35% APY $250k+ to $1 million (effective May 17, 2021)

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: NASA Federal Credit Union continues to offer a 49-month Special CD with a 1.50% APY for a minimum deposit of $10k. Its shorter-term CD Specials are also good deals (15-month at 0.80% APY and 9-month at 0.75% APY). Please refer to this blog post for more details.

When April began, Advancial Credit Union increased the rates of several of its long-term CDs. Its 5-year Jumbo CD rate is now almost 2% (1.94% APY for a $50k minimum deposit). The only problem with Advancial is that they don’t always offer an easy membership option (and that seems to be the case now.) Sometimes they allow people in any state to become a member by joining the Connex association.

Consumers Credit Union continues to offer top mid-term CD rates. For a $250k minimum deposit, its 20-month CD has a 1.00% APY. Other rates include 0.90% APY for a $100k minimum deposit and a 0.80% APY for a $250 minimum deposit.

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 April 20, 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)

Reverse Tier Savings/Money Market Accounts/Checking:

Reward Checking Accounts:

• Best Reward Checking Account Rates

• Noteworthy Accounts Available Nationwide:

*New to Summary as of April 20, 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 from November 1, 2020 to April 30, 2021

Accounts Removed, No Longer Available Nationwide