Rates on Branch-Based Bank Accounts Slip Further Behind Their Online Counterparts in 4Q
January 27 2015 - 8:05AM
Despite another quarter of historically low savings account and
money market account rates, some banks resisted the low-rate trend
by raising their deposit rates in the fourth quarter of 2014,
according to the latest MoneyRates.com America's Best Rates survey.
While several individual banks in the survey raised their rates,
including some of the top-placing institutions, the broader story
of the survey is that online-based accounts continued to
significantly outpace their branch-based counterparts. As a
category, online-based savings accounts actually rose slightly
during the fourth quarter, to an average annual percentage yield
(APY) of 0.559 percent, and online-based money market accounts held
steady at 0.552 percent. By contrast, branch-serviced accounts fell
in both the savings category (to 0.085 percent) and the money
market category (to 0.113 percent).
The average online-based money market account now offers more
than five times as much interest as the average branch-based money
market account. For savings accounts, the difference is six
times.
Richard Barrington, CFA, senior financial analyst for
MoneyRates.com, says that differences of this magnitude make rate
shopping worthwhile in spite of today's low-interest-rate
environment. "It's easy to look at low rates and assume that bank
accounts just don't pay much interest anymore," says Barrington.
"But it is precisely because rates are so low generally that the
exceptions stand out all the more. You would not have had the
chance to earn five times the average when rates were at 5 percent.
However, you do have that opportunity now, if you shop around."
Barrington adds that the rise in rates among some of the
top-paying savings accounts – the top two banks in that category,
Synchrony Bank and GE Capital Bank, both raised their rates during
the fourth quarter – underlines that not all bank rates move in the
same direction at the same time.
"What (the rise in the top-paying rates) means is that the gap
between what the average bank customer is earning and what
well-informed bank shoppers are getting is widening," says
Barrington.
Here are the 11 savings accounts that posted the highest average
interest rates in the fourth-quarter survey and their average
APYs.
1. (tie) Synchrony Bank – 0.973 percent 1. (tie) GE Capital Bank
– 0.973 percent 3. CIT Bank – 0.939 percent 4. Ally Bank – 0.916
percent 5. Barclays Bank – 0.915 percent 6. Discover Bank – 0.870
percent 7. American Express Bank – 0.810 percent 8. Sallie Mae Bank
– 0.800 percent 9. Doral Bank – 0.793 percent 10. (tie) Capital One
360 10. FNBO Direct – 0.750 percent
Here are the 10 money market accounts that posted the highest
average interest rates in the fourth-quarter survey and their
average APYs.
1. (tie) Sallie Mae Bank – 0.900 percent 1. (tie) Santander Bank
– 0.900 percent 3. (tie) Ally Bank – 0.850 percent 3. (tie) Mutual
of Omaha Bank – 0.850 percent 3. (tie) Synchrony Bank – 0.850
percent 6. Doral Bank – 0.779 percent 7. Discover Bank – 0.720
percent 8. Nationwide Bank – 0.680 percent 9. EverBank – 0.610
percent 10. OneWest Bank – 0.500 percent
For more details on this survey, please see
http://www.money-rates.com/research-center/americas-best-rates/.
Methodology
America's Best Rates are calculated from savings account rates
and money market account rates recorded in the MoneyRates Index
throughout the previous quarter. The MoneyRates Index is a
composite of 100 banks, including the 50 largest U.S. banks by
deposit amount, plus 50 smaller banks. This sampling was
constructed to be broadly representative of the national banking
environment.
About MoneyRates.com
MoneyRates.com has been a leading source of information on bank
rates, personal finance, savings accounts and investing since 1999.
The site seeks to provide the highest rates on CDs, money market
accounts and high-yield savings accounts. MoneyRates.com is owned
and operated by QuinStreet, Inc. (Nasdaq:QNST), one of the largest
Internet marketing and media companies in the world. QuinStreet is
committed to providing consumers and businesses with the
information they need to find, research and select the products,
services and brands that best meet their needs. The company is a
leader in visitor-friendly marketing practices. For more
information, please visit QuinStreet.com.
CONTACT: Alex H. Bryant
abryant(at)quinstreet(dot)com
650-703-5214
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