Best Bank Account Interest Rates - Summary for September 17, 2019

Banks aren’t waiting for Wednesday’s Fed meeting to cut rates. Several online savings accounts had rate reductions in the last two weeks. If the Fed does a 25 bp rate cut on Wednesday, I’m afraid we’ll see another round of rate cuts.

Below are the noteworthy savings and money market account rate changes that have occurred in the last two weeks (All percentages are APYs):

• Popular Direct Ultimate Savings (-10 bps to 2.40%, $5k min)
• Quontic Bank Personal Money Market (-10 bps to 2.30%, $100k min)
• earn.bank Money Market (-21 bps to 2.25%)
• MySavingsDirect Savings (-15 bps to 2.25%)
• Comenity Direct High-Yield Savings (-10 bps to 2.25%)
• Live Oak Savings (-15 bps to 2.15%)
• Envision Bank Savvy Savings (-12 bps to 2.15%)
• Barclays Online Savings (-10 bps to 2.00%)
• Synchrony Bank High Yield Savings (-15 bps to 2.00%)
• Marcus by Goldman Sachs Savings (-15 bps to 2.00%)
• FNBO Direct Online Savings (-10 bps to 2.00%)
• Citizens Access Savings (-20 bps to 2.00%)
• Capital One Money Market (-10 bps to 1.90%, $10k min)
• Discover Bank Online Savings (-10 bps to 1.90%)

The top two rate leaders held their rates steady since the last summary.

FitnessBank savings account remains the rate leader with a 2.75% APY. This requires that the customer average 12,500 steps per day for the month as measured by a step tracker and app. The rate falls to 2.50% APY when the step average is between 10,000 and 12,500. The rate falls significantly for lower step averages. Since only some of the customers receive these high rates, FitnessBank may be able to maintain the rate lead status.

Vio Bank remains in second place with a 2.52% APY. Minimum balance is $100. Unlike FitnessBank, there are no activity requirements. If you look at Vio Bank’s CD rates, you have to wonder how long they’ll be able to keep this rate. Their highest CD rate is only 2.00% APY for either a 10-year or 7-year term. The 5-year CD rate is 1.95% APY.

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. Unfortunately, we lost two of these types of deals in the last couple of months. Earlier this month, I reported on a new one. It’s the MAX-Yield Money Market Account promotion at Sun East Federal Credit Union. The account offers 2.20% APY on balances from $5k to $250k, and the rate is guaranteed for 13 months from account opening. Withdrawals are much more limited than the average money market account. Fee-free withdrawals are restricted to only one per calendar quarter. However, that still has much more withdrawal flexibility than a no-penalty CD, and unlike a no-penalty CD, there are no deposit limitations. People from any state can join Sun East FCU by joining a foundation. Joining the credit union and opening this account can be done online.

The no-penalty CDs don’t provide the withdrawal and deposit flexibility of money market specials, but no-penalty CDs are more common, with several now available at online banks. The no-penalty CDs do provide for a rate lock with liquidity that’s not available on standard CDs. The no-penalty CD rates aren’t as high as they used to be, but they still have rates higher than the rates of many online savings accounts.

Some banks like Ally 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. Ally makes it very quick and easy to move the CD funds into your savings or checking account.

Below is a list of noteworthy no-penalty CDs. Recent rate cuts have occurred at Ally Bank, Goldman Sachs Bank USA, and Investors eAccess.

• 2.10% APY 11-month No Penalty CD ($25k min) - Ally Bank
• 2.10% APY 7-month No-Penalty CD ($500 min) - Goldman Sachs Bank USA
• 2.05% APY 11-month No-Penalty CD ($1k min) - CIT Bank
• 2.05% APY 6-month No-Penalty CD ($500 min) - Investors eAccess
• 2.05% APY 11-month No-Penalty CD ($500 min) - Goldman Sachs Bank USA
• 2.00% APY 13-month No-Penalty CD ($500 min) - Goldman Sachs Bank USA
• 2.00% APY 13-month No-Penalty CD ($10k min) - PurePoint Financial

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 anytime 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.

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 have been falling in this current environment. Now with the Fed starting to cut rates, we will likely see larger yield cuts on money market funds.

Vanguard Prime Money Market Fund 7-day yield fell 5 bps in the last two weeks, falling from 2.12% to 2.07%. Fidelity Money Market Fund 7-day yield fell 4 bps, falling from 1.89% to 1.85%.

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 7-day yield fell 7 bps to 1.24%. Fidelity’s 7-day yield fell to 0.99%.

Competition from Cash Management Accounts

More fintechs are starting to offer cash management accounts as alternatives to savings accounts from online banks. They are making these accounts look very similar to online savings accounts. Most of them have partnered with multiple banks to hold the deposits. This allows the fintech companies to distribute the deposited cash into multiple banks, allowing standard FDIC coverage above $250k.

The only change to report on the cash management accounts this week (under bank account alternatives) is Betterment Everyday Savings with its promotional rate falling slightly to 2.38% APY. Several of these accounts have rates that are tied to the federal funds rate. Thus, expect these to fall soon if the Fed does a rate cut on Wednesday.

Reward Checking Accounts

There were just two changes to the list of nationally-available reward checking accounts, and for both cases the changes are good news.

Signature Federal Credit Union increased the balance cap of its Choice Checking from $15k to $20k. Now balances up to $20k can qualify for 3.00% APY if the monthly activity requirements are met.

The other change is the addition of the Kasasa Cash account from First Security Bank & Trust. It was recently identified as a nationally-available reward checking account. The top yield is a little low for reward checking at 2.51% APY, but the balance cap is large at $50k.

Overall, reward checking accounts continue to buck the trend of falling rates. If rates keep falling, I expect we’ll see more rate and balance cap cuts on reward checking accounts. However, history has shown that reward checking accounts can sustain rates significantly higher than online savings account rates, even during a zero interest rate environment.

TAB Bank’s Kasasa Cash account remains the best deal with a 4.00% APY for 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 focuses on liquid accounts.

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

Navy Federal Credit Union continues to offer a 5-year CD that earns 3.25% APY. Minimum deposit is $1k. This is still the best long-term CD deal that’s nationally available for small deposits. Technically, it’s not nationally available since a military connection is required to join. However, there’s a good chance you are eligible. You only need to have a family member who served in the military at some time in the past. I have more details in my Navy Federal Certificate review.

Navy Federal still has very good deals on two short-term Certificate specials (3.00% APY for 18 months and 2.50% APY for 9 months.) Minimum deposit is only $1k, and there is no maximum deposit.

If you have trouble joining Navy Federal, USALLIANCE Financial is another option. The credit union just came out with two short-term CD specials: 15-month (2.70% APY) and 9-month (2.50% APY). Minimum deposit is $500. People from any state can join this credit union by becoming a member of an association. I have more details in my USALLIANCE Financial CD review.

If you prefer opening a CD at a bank, the top nationally available bank CD rates are available at First National Bank of America. The bank is currently offering 2.95% APY on a 7-year CD and a 2.85% APY on a 5-year CD. Its 1-year CD (2.50% APY) is also very competitive. I have more details in my First National Bank of America CD review.

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

Removed, Rate Too Low