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

In the last three weeks, only a few savings and money market accounts had rate cuts.

One of the money market accounts in the 1% group has fallen. Connexus Credit Union lowered the top tier rate of its money market account from 1.00% to 0.85%. I have more on this rate cut in my review of the rate leaders below.

One money market account that used to be near the rate leaders was the Ascent Money Market account at Customers Bank. It had another rate cut a few days ago which lowered the rate from 0.60% to 0.50%. There is still a minimum balance of $25k, which makes this much less appealing than many savings accounts which have higher rates without a large balance requirement.

Two savings accounts with long histories of remaining competitive had recent small rate cuts. SFGI Direct lowered its savings account rate from 0.56% to 0.51%. This is the first rate cut since January. Vio Bank had a similar rate cut. Its savings account rate fell from 0.57% to 0.53%, and this was also the first rate cut since January.

Paramount Bank's High Interest Checking account rate has been very competitive since the start of 2020. Unfortunately, things started to change last March when Paramount Bank created a new account, Interest Checking, for new customers. The new Interest Checking not only had a lower rate, but the top rate only applied to balances up to $100k. Existing customers continued to have the High Interest Checking with no balance cap. There was no recent rate change on the High Interest Checking account for existing customers. However, for new customers with the Interest Checking, the rate just had a big drop. It fell from 0.65% to 0.30% for balances under $100k.

There is one small positive rate change to mention. CommunityWide FCU raised the rate of its High Rate Quarterly account 20 bps to 0.80%. This is a unique savings account in which penalty-free withdrawals can only be made during the first five days of each quarter. Outside those windows, an early withdrawal has a penalty of 30-days of interest.

As these latest rate cuts show, rate declines may not be coming to an end, but they have slowed to a crawl. This can be seen in our Online Savings Account Index which tracks the average rate of 10 well-established online savings accounts continues to change very little. In May, the Online Savings Account Index increased 1.0 bp to 0.456%, and in June, it had a slight decline of 0.5 bp to 0.451%.

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:

• None

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

• Connexus CU Money Market ($100k+ 1.00% → 0.85%)
• CommunityWide FCU High Rate Quarterly (0.60% → 0.80%)
• Lake Michigan CU Max Savings ($250k+ 0.80% → 0.65%)
• Vio Bank Online Savings (0.57% → 0.53%)
• SFGI Direct Savings (0.56% → 0.51%)
• Customers Bank Ascent Money Market ($25k+ 0.60% → 0.50%)
• Paramount Bank Interest Checking (0.65% → 0.30%)
• Paramount Bank Money Market Deposit (0.25% → 0.05%)
• USAA Bank Performance First Savings ($500k+ 0.25% → 0.20%)

Current rate leaders

With the rate cut at Connexus Credit Union, the 1% group is now down to just three liquid accounts. These are savings, money market or standard checking accounts that have at least a 1% APY without any small maximum balance limits.

Connexus Credit Union lowered the rates on most of its rate tiers. The top-tier rate for balances of at least $100k is now 0.85% APY. Lower tiers include 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 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.

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 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 all balances, 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.

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.

There were no rate changes on any of the listed no-penalty CDs over the last three 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.

One nationally-available reward checking account that had a rate cut in the last three weeks is Garden Savings Federal Credit Union’s Platinum Checking. Its top rate fell from 2.25% to 1.50% APY for balances up to $15k.

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 five of these accounts.Two of the five 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.

• Axos Bank Rewards Checking: 1.25% APY up to $150k (1.25% APY for $100k balance)
• 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)
• Presidential Bank Advantage Checking: 2.25% APY up to $25K, 0.65% on portion above $25k (1.05% blended APY for $100k balance)
• Quontic Bank High Interest Checking: 1.01% APY up to $100k, 0.65% APY $100k+ to $250k, 0.35% APY $250k+ (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)

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: In July, Abound Credit Union overtook NASA Federal Credit Union with the top long-term CD Special. Abound increased the rate of its 47-month CD Special 15 bps to 1.45% APY, while NASA FCU lowered the rate of its 49-month CD Special 5 bps to 1.35%. For more details, please refer to this Abound CD review and this NASA FCU CD review.

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.

Wings Financial Credit Union has an 18-month CD Special that earns 0.85% APY with only a $500 minimum deposit.

CommunityWide Federal Credit Union has the best short-term CD rates. It’s offering 0.85% APY for both a 6-month and 1-year term. Minimum deposit is only $1k.

Marcus by Goldman Sachs continues to offer its promotional 18-month CD (0.70% APY). Minimum deposit is only $500.

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 July 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)

No-Penalty CDs:

*New To Summary, as of July 20, 2021

Reverse Tier Savings/Money Market Accounts/Checking:

Reward Checking Accounts:

• Best Reward Checking Account Rates

• Noteworthy Accounts Available Nationwide:

*New To Summary, as of July 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 after May 1, 2021

Accounts Removed, No Longer Available