ING Direct was the first of the major online banks to drop its savings account interest rate. ING Direct has had lower rates that most of the online banking institutions for the last several years, but as they were the first major presence on the scene and probably have the largest customer base compared to other online banks, they are still leaders, and people pay attention to what they do.
HSBC Direct was paying attention, and following ING Direct’s drop this bank lowered its rates from 5.05% to 4.5% APY, a steeper drop than ING’s.
As I was updating the list of high-yield savings interest rates for the site yesterday, I noticed that Emigrant Direct has followed suit. This bank, a branch of the Emigrant Savings Bank based in New York, dropped its offered interest rate (yield) from 5.05% to 4.75%. This 30 basis point decrease is larger than ING Direct’s but not as steep as HSBC Direct’s.
Which banks will be next to follow suit? I don’t think we’ve seen the last of lowered savings rates.
In related news, NetBank, also one of the first online banks, has failed and has been taken over by ING Direct. ING Direct has more information for former NetBank customers.
Updated June 21, 2011 and originally published September 29, 2007. 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.