Best Banks With Consistently High Interest Rates

It’s one thing to find a bank with a high interest rate, and another thing to have that rate stay high. Many banks post teaser-like rates to attract deposits, and then hope you’ll be lazy and stay while they gradually become uncompetitive. A post yesterday on the NY Times Bucks blog explored ways to counter this.

Bankrate does a quarterly ranking of top banks with consistently high yields, which is “based on the number of times within the quarter that an institution’s yield was among the top 20 for the product category and the relative position of the yield in relation to the others in the product category.” But that’s only one quarter. So the Times asked them which banks have been on top for every single of the last eight consecutive quarters (Q1 2008 to Q4 2009). Good idea!

The next natural question: Which of these banks has the highest rates now? So I visited each site and found the current rates (as of 11/12/13) for their highest yielding savings account (or money market) and their 12-month CD. Since some of the rates were tiered, I picked the rate for a $10,000 deposit and also included the minimum balance needed to avoid fees. Here are the results, sorted by top overall yield:

Banks
Online Savings / Money Market
12-month CD
0.86% APY / 0.86% Intro ($5k+)
0.60% APY
Discover Bank
0.85% APY / 0.70% ($10k+)
0.95% APY
0.85% APY (No min)
0.98% APY
1.25% APY ($1k+)
1.50% APY
Intervest National Bank
1.13% APY ($500+)
1.50% APY
American Bank
0.90% APY ($10k+)
1.30% APY
MetLife Bank
0.85% APY ($10k+)
1.15% APY
0.50% APY ($5k+)
1.35% APY
0.50% APY (No min)
1.10% APY
UmbrellaBank (now Beal Bank)
0.50% APY ($1k+)
1.06% APY
0.15% APY ($10k+)
1.11% APY

Comments

  1. Don’t forget about American Express savings. No minimum, no fees and the APY is 1.50%

    http://personalsavings.america.....rsavingsv3

  2. What about HSBC?!

  3. Great list! I would also add that a couple of credit unions are paying consistently high rates at this time. My personal favorite is Alliant Credit Union, which has held a 2.0% savings rate and 1.75% checking rate for the last 8 months.

    Their interface is not nearly as pretty as ING, but they offer quite a bit of functionality over most of commercial banks (VCOM ATM check deposits and eDeposits at home [via scanner]).

  4. Like Ernest, Alliant CU was the first thing that came to mind when reading this post. Why put up with a bank’s low interest rates when you don’t have to?

  5. corntrollio says:

    Alliant Credit Union is also the first thing that came to my mind. In addition, their 1.75% checking account doesn’t have any hoops except for requiring a monthly deposit to the account and getting e-statements. Their surcharge-free ATM network is also strong, because they are allied with so many different networks + Bank of the West, and you can also submit deposits at ATMs under some of those networks and at US Bank. And even when Alliant falls behind in rates, they usually catch up fairly quickly — just check the history on FatWallet.com.

    American Express Personal Savings was better until they started changing their policies recently. Their rate is still 1.50% for now, but they have a bunch of terrible policies (e.g. 5 business days for incoming ACH funds to become “available,” only 3 ACH accounts allowed now, etc.). They have been increasingly making the accounts more and more restrictive over the last few weeks/months. Their whole reason for offering these accounts is that getting financing at 1.50% is a lot cheaper than what they were required to pay for financing in the bond market.

    A lot of folks were also high on ShoreBank for a while, but Bauer Financial gives them zero stars, and I think they’ve cut their top rates now.

  6. Dollarsavingsdirect.com has done well for me over the last year or more, and their online savings account is currently at 1.40%, so placed competitively on your list.

  7. Yes, there are definitely some omissions. In particular, Bankrate doesn’t seem to track credit unions, probably because the membership rules vary widely. I forget, can you still join Alliant with some sort of $20 membership to a community group?

  8. corntrollio says:

    You can join Alliant by a $10 donation to the Orphan Foundation of America. That is relatively new AFAIK:

    http://www.alliantcreditunion......ility/ofa/

    You might also be thinking of Pentagon Federal, which allowed a $20 membership to the National Military Families Association.

  9. Yes, you can join Alliant if you are member of a PTA. I said I was but they never checked. I’m not even a parent.

  10. it’s funny how dollar savings direct was all popular to mention maybe a year or two ago, and although its gone down along with everyone else, it still has stayed pretty close to the top of the list as far as returns on periodic checks of lists like this on bankrate or depositaccounts…for some reason I feel like I want to move on from them, but I don’t know why really, they’re always with a solid rate and I’ve had no problems, sure they have that one account rule thing, but not really a big deal for my emergency savings.

  11. I think that with rates this low you should put your money back into the stock or real estate markets. This will barely beat inflation and is not a good long term approach.

  12. ^^? really? i think it’s clear the only interest in these accounts is for your emergency funds that you want readily available and guaranteed, not in stocks or real estate… really? cpa?

  13. You might want to do a review of smartypig.com It was featured in an article on mint.com’s blog. The interface is different from most savings accounts as it’s goal-oriented. Set your goal amount, your time frame and it’ll calculate your monthly contribution to get there (auto-deposits set up.) Once a goal is met, you can close the goal to transfer out the funds. Met goals continue to earn interest, but it won’t auto-transfer fund into the goal anymore. Interest is added on quarterly instead of monthly, but still seems to be compounded daily. Got a 1099-INT from them for 2009, so it seems pretty legit. At 2.01% (not a promotional rate, but a regular rate), it’s the highest rate I’ve seen for an online bank. It syncs with mint.com too.

  14. Smartypig.com doesn’t let you make ACH withdrawals though, right? Does Alliant Credit Union allow that? I like to pay my credit cards with ACH transfers from my banks.

  15. Also, how can they include a bank on this list with a .15% interest rate? Jonathan, how can that possibly be among the top 20?

  16. You can’t make payments from SmartyPig but its designed as a savings account not a checking account. So I use it in combo with my Schwab Interest checking. Pay all my bills and transfer the leftovers to SmartyPig. Consistently the highest rates with no intro / minimum.

  17. At least Bankrate didn’t include ETrade Bank on the lists!

    I don’t know how M&T Bank had 8 out of 8 quarters as a rate leader. Their online savings accounts at both M&T Bank website and their internet division OnBank have been paying only 0.50% since May 2009.

  18. Smartypig DOES let you do ACH withdrawals back to your funding source, but only after your goal is met. I think you have the option of editing your goal anytime if you need the cash sooner than originally planned. You also have the option of getting a gift card (with an extra %-age added on from their select partners) or prepaid debit card. Unfortunately while I was saving up for my goal, one of their partners dropped out, (Royal Caribbean) so I ended up just cashing out.

    Oh, there’s another online bank too that you might want to review. Salliemae.com , the same people you took your student loans out from now offers a “high yield” 1.35% savings account or a 5 year CD at 3%. You can link your Upromise account to Salliemae as well. I thought that the fees on Upromises’s 529 accounts were too high and it’s nice to have another option that earns interest.

  19. Note that both the Everbank rates are intro rates — if you read the fine print on their site, their current non-intro rate is 1.25%. The 1.51% first year APY is only because of the 2.25% in the first three months. So while the first 3 months are great, after that it drops to 4th on the list, once you account for the $5K minimum balance to avoid a monthly fee.

  20. As always, thanks for the information, Jonathan.

    Have you or anyone else here tried Capitol One Direct Banking? If so, I’d be interested to hear about your experience. Looks like their transfers are really slow, though — in the neighborhood of three business days after the day you initiate a transfer (i.e., Monday gets there Thursday).

    Also, does anyone know which of these are hard credit pulls vs. soft?:

    ally
    Capitol One Direct Banking
    Discover
    DollarSavingsDirect,
    EverBank

    Thanks very much!

  21. Smartypig does allow you to withdraw your money through an ACH transfer at any time back to the funding source for a particular goal. It takes a few days of course and the amount has to be the total of one of your goals (you are basically closing a goal). If you have multiple goals setup for different purposes (such as an Emergency Fund) this is not a big deal for me. I actually prefer not being able to withdraw small amounts from their account.

  22. corntrollio,

    Shorebank did used to have decent rates. Recently they did cut them though. I think it is only around 1% now. Plus it takes 3 days when you initiate an ACH transfer. There are definitely better options out there.

  23. these are the best?

    1%-2% interest. paleeeeeze!

  24. I guess you guys have way more money that I do, but Evantage (a bank I found on this site) has 4% on up to $10,000 checking and 2% on savings up to $25,000, and it’s working well for me. I’ve also got DSD, etc.

  25. Found this info about the banks on the list. Do I really need to pay attention these details? or just pay attention to the FDIC Score? or any?

    As of 12/31/2009:
    EverBank
    Bank Type: Federal Savings Bank
    Texas Ratio: 64 – Bad
    Tier 1 leverage ratio: 0.0799
    Tier 1 risk-based capital ratio: 0.1375
    Total risk-based capital ratio: 0.15
    FDIC Score: Well Capitalized
    Holding Company: EverBank Financial Corp
    Tarp Amt: n/a

    Discover Bank
    Bank Type: Non-member Bank
    Texas Ratio: 0 – Excellent
    Tier 1 leverage ratio: 0.1056
    Tier 1 risk-based capital ratio: 0.101785
    Total risk-based capital ratio: 0.134
    FDIC Score: Well Capitalized
    Holding Company: DISCOVER FINANCIAL SERVICES
    Tarp Amt: $1,224,558,000

    Ally Bank
    Bank Type: Non-member Bank
    Texas Ratio: 3 – Excellent
    Tier 1 leverage ratio: 0.1542
    Tier 1 risk-based capital ratio: 0.2072
    Total risk-based capital ratio: 0.2197
    FDIC Score: Well Capitalized
    Holding Company: GMAC inc
    Tarp Amt: n/a

    HSBC Bank
    Bank Type: National Bank
    Texas Ratio: 11 – Fair
    Tier 1 leverage ratio: 0.0807
    Tier 1 risk-based capital ratio: 0.1013
    Total risk-based capital ratio: 0.1481
    FDIC Score: Well Capitalized
    Holding Company: HSBC HOLDINGS PLC, London
    Tarp Amt: n/a

  26. Bruce,

    I use Capital One Bank for my checking/savings/e.savings accounts. That being said, transfers from one account to another are near instant and “clear” overnight. I haven’t tried transferring from external accounts, but I know transfers to my brokerage (scottrade) takes only a few days (more of a scottrade thing than cap1 I’d imagine).

    I really like Capital One. The interest rates are competitive, the phone/email support is helpful and personable, and opening accounts online is a breeze. I use to be a Hibernia customer before Capital One bought them, so I’ve been with them since the beginning. I currently have their SmartCents Checking (used to have a 0.05% VIP checking that I converted), Simple Savings, High Yield Money Market (1.19%), and High Yield Savings (1.45% I believe).

    In the past 6-12 months, I have noticed my HYMM account dropping from 1.4% to 1.2%.

    My girlfriend uses Discover Bank for her e.savings. Transfers take a few days as well (clearing in 2-3) but it’s not a big deal for her. She’s been a customer for a while so she was automatically upgraded to the 1.59% VIP account. Their new Interface (c:feb 22, 10) is fantastic.

    Hope that helps!

  27. simplesimon says:

    I paid $10 to Golden State PTA (California’s state PTA) and joined Alliant CU.

  28. Chrismr says:

    I tried to open a discover bank acct. They were having problems with transfers from etrade, then the new site did not include a submit button on the page for verifying your account transfer- I brought it to their attention. After 3 weeks of trying and 4 glitches I gave up funding the account. Now I have to wait 3 months to get my $500 back or pay a $20 fee – for THEIR incompetence.

  29. I just started a new account with Hanscom Federal Credit Union (HFCU.org) called the CU Thrive account. The account is currently earning 3.69% (3.75% APY). The account (you can have only one at a time) is only open for a year, and the rate is guaranteed for that year. When you open an account, you specify a monthly amount ($5-$500) that will be automatically transferred from your checking account (free checking) to the CU Thrive account. At the end of the year, the CU Thrive account closes and all the funds are transferred to your savings account ($25 minimum balance). You may then start a new CU Thrive account from $0 balance. The only catch here is that you cannot withdraw funds without penalty (90 days interest on the amount withdrawn), but you can vary the monthly amount contributed at any time.

  30. I remember when I opened my HSBCDirect online checking account only about 3-4 yrs ago and the incentive interest rate was 5.15% Those were the days.

  31. Hi, Matt,

    Thanks very much for the information, I really appreciate it.

    - Bruce

  32. Accountant Marketing says:

    Rates today are so low that you might as well put your money in your mattress. Once inflation kicks in during the next few years we should see rates start to climb.

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