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Banks Celebrate New Year By Lowering Savings Interest Rates

This article was written by in Banking. 2 comments.

One thing to keep your eye on in 2009 is your savings account. Over the past few days, several banks have lowered the interest rates on high-yield savings accounts. This is not a good sign for those who want to have liquid assets without losing purchasing power. You may want to start the new year by evaluating your choices and moving your cash to where it can earn some more interest. I don’t normally suggest chasing rates, but the beginning of the year may be a good time to refresh if you don’t do it often.

Here are some of the recent drops.

ING Direct celebrated early the other day by dropping the interest rate on their famous Orange Savings Account to 2.50% APY. The yield was 2.75% last week and 3.0% back in October. This coincides with the bank’s second interest reduction in one month on the less famous Electric Orange Checking Account. New rates for the balance tiers are 0.5%, 2.6%, and 2.8% APY.

FNBO Direct dropped its interest rate from 3.25% to 2.8% APY. This is the second highest rate among the accounts I consider to be the best online savings accounts, with HSBC Direct’s 3.0% APY being the highest.

GMAC Bank dropped the rate of its online savings account from 3.75% to 3.25% APY and its money market account from 3.25% to 2.75% APY.

Emigrant Direct lowered its interest rate from 3.0% to 2.75% APY while this bank’s “cousin,” DollarSavingsDirect, remains at the top of the list of accounts I can recommend, offering 4.0% APY.

Here’s a full list of high-yield savings accounts and checking accounts with rates current, as of today.

Updated June 16, 2011 and originally published January 1, 2009. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 2 comments… read them below or add one }

avatar thomas

Gone are the sweet days of 6%+ savings! It was a nice run while it lasted. Anything lower than 2.5% and cash isn’t keeping up with inflation (traditionally). Unless I’m working in the 5 figures, shifting money for less than .5% doesn’t seem worth it.

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avatar Craig

I noticed that with my savings account. I am at Citibank and my interest rates went down and this month I had less than normal which was a surprise. Do you know if this is temporary or I should expect to see this throughout the year. I really just wanted to keep things in savings to have a little big accrue and to be safe, not sure a safe option to put it elsewhere.

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