Best Bank Account Interest Rates - Summary For July 9, 2019

The June Fed meeting continues to be having an effect on savings and money market rates. With a Fed rate cut now appearing to be very likely for July, more banks and credit unions have started to cut their online savings and money market rates. The rate cuts haven’t reached a widespread level, but they’re getting close.

There were a few rate hikes in the last two weeks, but these were primarily promotional offerings. Below are the noteworthy savings and money market account rate hikes and cuts that have occurred in the last two weeks:

• FitnessBank Savings Account (+50 bps to 3.00% APY, $100 min)
• Northpointe Bank Ultimate Savings (+50 bps to 2.55% APY, $25k min)
• BBVA Compass ClearChoice Money Market (+10 bps to 2.50% APY, $10k min)
• Comenity Direct High-Yield Savings (-3 bps to 2.45% APY)
• CIT Bank Savings Builder (-10 bps to 2.30% APY, $25k min)
• USALLIANCE Financial High Dividends Savings (-25 bps to 2.25% APY, $500 min)
• Citizens Access Online Savings (-15 bps to 2.20% APY, $5k min)
• Sallie Mae Bank Money Market (-10 bps to 2.20% APY)
• Marcus by Goldman Sachs High-Yield Online Savings (-10 bps to 2.15% APY)
• Barclays Online Savings (-10 bps to 2.10% APY)
• PurePoint Financial 13mo No-Penalty CD (-50 bps to 2.00% APY, $10k min)

The rate drops at Citizens Access and Sallie Mae Bank were especially disappointing. These had a history of maintaining rates above the well-established online banks. After these rate cuts, you have to wonder if they’re going to fall in line with the well-established online banks.

There were a few bright spots. One of those bright spots is FitnessBank and their Fitness Savings Account that earns 3.00% APY which places them as the clear rate leader. As the name implies, there’s a catch. To qualify for the 3.00% APY, the customer must meet step count targets (12.5k steps/day on average). The rate goes down substantially for lower step count averages.

Another bright spot is Northpointe Bank and its Ultimate Savings Account which now earns 2.55% APY on balances between $25k and $1m. There’s also a rate guarantee period of three months. Northpointe Bank used to have a 24-month rate guarantee for its Ultimate Money Market Account. That guaranteed 2.30% APY for 24 months. Unfortunately, the guarantee period is now only three months. I think most savers would have preferred the lower rate for the longer guarantee period.

When rates are falling, the longer the rate guarantee period, the better. In addition to savings and money market accounts with promotional rate guarantees, there’s also the no-penalty CD, which has the rate lock of a CD combined with much of the liquidity of a savings account. Unfortunately, we lost a no-penalty CD rate leader. PurePoint Financial slashed its 13-month No-Penalty rate by 50 bps to 2.00% APY. The best deal now for no-penalty CDs is the 13-month No-Penalty CD at Marcus by Goldman Sachs.

Below is a list of the noteworthy no-penalty CDs and promotional savings/money market accounts with rate guarantee periods:

• 2.55% APY Ultimate Savings with rate guaranteed for 3 months - Northpointe Bank
• 2.50% APY Money Market with rate guaranteed through 12/31/19 - Northern Bank Direct
• 2.35% APY 13-month No Penalty CD ($500 min) - Goldman Sachs Bank USA
• 2.30% APY 11-month No Penalty CD ($25k min) - Ally Bank
• 2.25% APY 6-month No-Penalty CD ($500 min) - Investors eAccess
• 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.

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 2.36% to 2.31%. Fidelity Money Market Fund rate had a slight gain. Its 7-day yield increased 1 bps to 2.16%.

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 generally 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. The yields on the municipal money market funds have been volatile recently. This week, Fidelity is the one with a rate spike. Its 7-day yield increased from 1.15% to 1.53%. Vanguard had a big drop, with the yield falling from 1.71% to 1.44%.

Reward Checking Accounts

Reward checking accounts have bucked the trend of falling rates. In the last two weeks, three accounts had rate gains in my list of nationally-available reward checking accounts. There was only one rate cut. The two most noteworthy rate gains were at Evansville Teachers FCU (+30 bps to 3.30% APY for up to $20k) and at Elements Financial (+100 bps to 3.00% APY for up to $20k).

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 will focus on liquid accounts.

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

Navy Federal Credit Union surprised me on Monday by raising its 5-year Certificate rate to 3.50% APY on all tiers (minimum deposit is only $1k). This is by far the best long-term CD deal that’s nationally available. 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

Andrews Federal Credit Union still has four very competitive Certificate specials: 8-month (2.86% APY), 17-month (2.95% APY), 55-month (3.05% APY), and 84-month (3.45% APY). Minimum deposit is $1k for all four. Both the 55-month and the 84-month Certificates have an early withdrawal penalty of 360 days of dividends.

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, No Longer Available Nationwide