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Savings Account Interest Rate Roundup (Updated June 13, 2009!)

by Flexo on March 10, 2009

in Banking

It’s not your imagination. Banks are now looking for ways to actively discourage new deposit accounts. It’s not just through lowering interest rates, they are scaling back marketing. It makes sense from a business standpoint; the economy is not so great, so companies are saving their operating expenses.

Here is a summary of the most recent interest rate declines, listed as annual percentage yields (APYs) as of June 13. These accounts are recommended. I have accounts here and I’ve never had any problems with the banks.

  • FNBO Direct Online Savings Account dropped to 2.15% (1.65% as of June 2009)
  • E*TRADE Bank Max-Rate Savings Account dropped to 1.95% (0.95% as of June 2009)
  • HSBC Direct Online Savings Account dropped to 1.85% (1.55% as of June 2009)
  • ING Direct Orange Savings Account dropped to 1.65% (1.5% as of June 2009)
  • Ally Bank Online Savings Account dropped to 2.05% as of June 2009 (Formerly GMAC Bank)

These accounts are recommended by others but I have no personal experience with the banks.

  • ShoreBank Direct Online Savings Account dropped to 2.80% (2.05% as of June 2009)
  • Kirkpatrick Bank Savings Square dropped to 2.30% (2.00% as of June 2009)
  • Dollar Savings Direct dropped to 2.25% (2.00% as of June 2009)

For a history of savings account interest rates for the last fourteen months or so, take a look at this history of high-yield interest rates. With banks decreasing their rates almost every week, it’s difficult to keep up with the changes.

Where do you keep your savings?

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Tagged as: Banking, etrade, fnbo direct, hsbc direct, ING Direct, interest rates



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Flexo, the owner and creator of Consumerism Commentary, has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow him on Twitter.

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  • Yes, it is a sad side effect of the broader economic decline. Currently, the best interest rate I'm getting is from SmartyPig, which is offering 3.25% right now (down from 3.9% at the end of last year). The disadvantage is that you can't pull any of the money out without closing down the account, and when you do, it takes several business days to be transferred into a 'regular' account. If you think of it as a sort of modified CD rather than a normal savings account, you won't be that far off.

    That's about the best idea I can come up with that doesn't involve time travel and long-term CDs in order to get a decent return on your savings.
  • The majority of our savings is being transferred right now to ING Direct.
  • Eric
    For a little work, you can get 2x these rates with a "rewards" checking account. I just opened such an account at Redneck Bank (this is no joke ... it's a real bank!) and, in return for making ten Visa transactions (not ATM) on their card, I'll get just over 5% on up to $25K in deposits. Most of these accounts have similar limitations and requirements. Just google on "rewards checking" and you'll find plenty of information.
    This is an experiment for me - it's going to take some work/diligence to make sure I make my transaction quota, but for that kind of interest rate I'm willing to work a little.
  • I just opened up an account at ShoreBank yesterday after searching for an ethical bank to put my money. I'll be moving the bulk of my savings from Citi to there over the next month and using my local credit union to do my checking.
  • sam
    Economically speaking it is a tough time all round at the minute. As you say banks don't really seem to want your business at the minute as they are not promoting savings nor are they giving out mortgages. So what are banks doing at the minute, they have been bailed out a lot just recently and appear to be sitting on the money they have been handed out, which completely voids the point of being given the money in the first place. They need to start encouraging sensible borrowing to home owners and good interest rates to savers. All those pensioners that worked hard to make money for this time and in their life and they are all now struggling.
  • Lolita
    I've had an account with Shore Bank for about a year now. I had a promo code where I got a $25 bonus to open the MMA. The bonus money came in early and I haven't had any problems. It's nice to see that they are still on the upper end of the interest rate scale:) The user interface leaves a bit to be desired, but it works, never a problem and I don't think I've ever seen any down time. What I like best, is that the bank is an active investor in its local community and focuses on areas that are low income to provide loans for improvement in the community.
  • @Eric It's not that hard to meet the transactions requirements, if you always put groceries and gas on the card. That's a foundation for me.
  • Rassah
    Of those I currently have ING, FNBO, and GMAC. I use ING for my main checking account, and for short-term savings (mainly money that will go to pay off credit cards every month). My ING account drops to $0, both savings and checking, once a month every month. I used FNBO, but their interest rate dropped too much too fast, and they have no way to "link" accounts to Quicken to download transactions. It's also a pain to track FNBO's rate, since I rarely go to their home page, and usually link directly to their log-in page. GMAC I would compare to ING in their website quality/convenience. Everything is very easy to find (intuitive), transfers are very hassle-free and easy to set up, they show your current interest rate right on the accounts detail page, and, unlike all the other banks, GMAC seems to have been somewhat resistant to interest rate drops. Since January they dropped from 2.80% to 2.75%, and recently to 2.65%. Hardly the huge drops we've seen from ING and FNBO. Currently, GMAC is my long-term savings, and my credit card arbitrage bank.
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