Best Bank Account Interest Rates - Summary For January 11, 2022

Rate changes on savings, money market and checking accounts continue to be rare, and that will probably continue until the Fed starts to hike rates (appears likely in March.) We may see an occasional small rate hike like we saw last week at a major online bank. The major online bank is American Express National Bank, and it increased its High Yield Savings Account rate from 0.40% to 0.50%. The 0.40% rate began in March and was the all-time rate bottom for American Express. Before 2020, the lowest rate of the High Yield Savings Account was 0.75% back in 2012.

There were also noteworthy rate hikes at Northpointe Bank and at Colorado Federal Savings Bank (CFSB.)

Northpointe Bank increased the rate of its Ultimate Money Market account from 0.35% to 0.65% for balances of at least $25k. Northpointe launched this account in 2017 with a 1.50% APY that was guaranteed for 12 months. A year later, the rate increased to 2.30% APY, with a rate guarantee for new accounts of 3 months. The account became uncompetitive in 2020, with the rate falling to a low of 0.35% in early 2021.

As in the case of Northpointe Bank, we may see them and other banks offering rate guarantees on new accounts this year. Of course, rate guarantees don’t mean much when rates are rising.

At CFSB, its Premium Savings account rate increased from 0.55% to 0.60% for balances of at least $50k. Its High Yield Savings account rate increased from 0.45% to 0.51%. CFSB’s High Yield Savings account has a long history. I first reviewed it in 2009. The rate fell to 0.85% in 2011, and the rate remained at that level until late 2017. It reached a high of 2.00% APY in early 2019. The rate fell to the all-time low of 0.40% last March. That rate lasted until late October when the rate increased to 0.45%.

Keep an eye out on the online divisions of Emigrant Bank (EmigrantDirect, MySavingsDirect and DollarSavingsDirect). Rates at these banks have been below average for the last year, but that may change if the Fed starts to hike. The bank has a long history of making big savings account rate hikes early in rising rate cycles. Way back in 2005, EmigrantDirect was the first to offer 3% APY, and in 2018, MySavingsDirect was one of the early online banks to offer 2.25% (September 2018) and 2.40% (December 2018). After these initial rate hikes, the bank seems to try to keep rates competitive for about a year or two before falling behind. I wouldn’t be surprised if we see something similar in 2022 and 2023.

The average online savings account rate was unchanged in December. The average remains at 0.46%. 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 has been no net change in the average from June 1st to January 1st. I suspect that we won’t see much change until after the Fed’s first rate hike, and even after liftoff, it may take another one or two Fed rate hikes before we see online banks making widespread rate hikes on their savings accounts.

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 three 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:

• American Express National Bank High Yield Savings (0.40% → 0.50%)

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

• Langley FCU Platinum MM ($1m+ 0.60% → 0.75%)
• Northpointe Bank Ultimate MM ($25k+ 0.35% → 0.65%)
• Colorado Federal Savings Bank Premium Savings ($50k+ 0.55% → 0.60%)
• Colorado Federal Savings Bank High Yield Savings (0.45% → 0.51%)
• CNB Bank Direct Premium MM (0.49% → 0.39%)
• Blue FCU Sky High Savings (0.35% → 0.30%)

Current rate leaders

There’s no change in the rate leaders. There continues to be just two liquid accounts 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.

The two institutions in the 1% group are fintechs that partner with banks. Both 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.

M1 Finance is one of the two fintechs in the 1% group. Since we started to track M1 Finance in February 2021, its 1% APY on all balances has held. This is a brokerage firm and robo-advisor which also offers a checking account called M1 Spend. The fintech has been growing fast. This November Financial Brand article on M1 Finance and its CEO offers some insights into the company and its plans to be a complete solution for “investing, saving, borrowing and spending.”

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. Since we started to track the T-Mobile Money Checking Account in April 2019, its 1% APY on all balances has held.

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.

Connexus Credit Union’s Money Market Account continues to be in third place with its 0.85% APY for balances of at least $100k. This account had been in the 1% group, but the rate fell in July. 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.

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. Customers who had this promotion are now earning the standard rate (0.80% APY). For more details on ZYNLO and the money market account, please refer to my ZYNLO Bank money market review.

Advancial Credit Union used to offer a very competitive money market account. Its top rate had been 1% earlier this year. Now Advancial has stopped accepting applications for this account. On its rates page, Advancial has this note below the Premium Money Market title: ”No longer offered or available to open. Rate information provided for existing accounts.”

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

There were two New-to-Summary (NTS) accounts added this week to the summary. Neither are offering great rates, but they’re high enough to be included.

The first NTS account is the Platinum Money Market Savings at Langley Federal Credit Union. Its top-tier rate is very competitive at 0.75%, but this requires an extremely high balance of $1 million. The rate falls to 0.70% for a $500k minimum and 0.65% for a $250k minimum. The yields are much lower for more reasonable balances (0.40% for $100k+ and 0.30% for $25k+.)

The other NTS account is the Ultimate Money Market from Northpointe Bank. As I mentioned above, this account launched in 2017 and remained competitive until 2020. The latest rate hike has brought it back to a competitive online account. The top rate is now 0.65% for balances of at least $25k. Lower rates apply on smaller balances (0.35% for $5k+ and 0.25% for $2.5k+.)

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. With the potential for rising rates soon, we may start to see promotional rate guarantees. Of course, these guarantees aren’t that useful when rates are rising.

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 little advantage over top savings account rates. In fact, 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.

In the last three weeks, there was just one no-penalty CD rate change. Colorado Federal Savings Bank increased the rate of its 11-month no-penalty CD from 0.55% to 0.65%. This now is the top nationally-available no-penalty CD. CFG Bank’s 13-month Penalty Free CD is now in second place 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%. These may become competitive again after a few Fed rate hikes.

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

Overall, reward checking accounts have generally held up better in a zero-rate environment than online savings accounts, but they’re not immune to cuts (either rate cuts, balance cap cuts or reduced availability). History during the last zero-rate period (2008 to 2015) has shown that reward checking accounts can sustain rates significantly higher than online savings account rates.

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. ECCU’s Kasasa accounts had been in this list, but it was removed after ECCU stopped offering new Kasasa 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, 0.50% on portion above $25k (0.94% 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’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: For CDs that are nationally available (without any membership limitations), the highest yield continues to be 1.70%. This is available at NASA FCU, which increased the yield of its 49-month CD Special from 1.60% to 1.70% in December.

For banks, the highest nationally available CD rate regardless of maturity length is now 1.35% APY (7-year term) at First National Bank of America. It also has a top 5-year CD rate for a bank (1.25% APY).

For the 3-year category, Hughes Federal Credit Union continues to have the top spot with a 1.21% APY on its 3-year Jumbo CD ($99k minimum). It has a 1.11% APY for a $1k minimum deposit.

Quontic Bank increased its 3-year CD rate to 1.10% APY, and that keeps it as the rate leader for banks.

For the 2-year category, Western Vista FCU’s 29-month CD Special (1.19% APY) now holds the top spot. Hughes Federal Credit Union’s 29-month CD (1.11% APY) now holds second place.

For the 18-month category, Consumers Credit Union is now the clear rate leader with a new 16-month CD Special (This 16-month replaced the 20-month Special.) The 16-month APYs range from 1.30% for a $250k minimum to 1.10% for a $250 minimum.

For 1-year terms, Quorum Federal Credit Union’s special 13-month CD ($1k minimum) and EFCU Financial’s 12-month Jumbo CD ($100k minimum) share the top spot with a 0.90% APY. Note, Poppy Bank (which continues to offer a 1% 12-month CD) is no longer offering its CDs online.

For terms under one year, Veridian Credit Union’s 9-month Jumbo CD (0.85%) and EFCU Financial’s 6-month Jumbo CD (0.85%) share the top spot. NASA FCU’s 9-month CD Special (0.80%) is the highest rate for small deposits ($10k minimum)..

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 January 11, 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, as of January 11, 2022

No-Penalty CDs

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 November 1, 2021