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Rob Berger

We’ve tracked bank rates since 2008. The latest list shows the best bank interest rates available nationwide as of December 2017 (with daily updates).

best bank rates

Since many banks are constantly updating their interest rates offered on savings, money market and checking accounts, this chart should come in handy. On the 1st of every month, this page is updated to show the most accurate rate information available.

Banking Deal: Earn 1.30% APY on an FDIC-insured savings account at Synchrony Bank.

This list is organized into two sections. The first section includes FDIC-insured savings or money market accounts and the second includes FDIC-insured checking accounts. Each list is sorted alphabetically and unless there is a notation listed, the APY rate applies to all amounts.

Current rates

Use the table below to search for current interest rates available on money market accounts, savings accounts, and certificates of deposit. For historical rates, scroll down.

Historical interest rates

Banks that have lowered or raised their rates in the last month are shown in red and green, respectively.

Bank Account Name Tier Notes 12/1/2017 1/1/2017 1/1/2016 1/1/2015
Synchrony Bank Online Savings All No minimum balance 1.30% 1.05% 1.05% 1.05%
Ally Online Savings All No minimum balance 1.25% 1.00% 1.00% 0.99%
Ally Money Market All No minimum balance 0.90% 0.85% 0.85% 0.85%
American Express Bank High Yield Savings All 1.25% 0.90% 0.90% 0.80%
Barclays Online Savings All 1.30% 1.00% 1.00% 0.90%
Capital One 360 Online Savings All Formerly ING Direct 0.75% 0.75% 0.75% 0.75%
Discover Bank Online Savings All 1.20%** 0.95% 0.95% 0.90%
GS Bank Online Savings All No minimum deposit 1.30% 1.05% N/A N/A
Everbank Money Market $5k to $10k Includes 1st year intro rate 1.31% 1.11% 1.11% 1.11%

**Discover Bank increased the rate on its savings account to 1.30% APY as of December 7, 2017.

Savings Account Rates

As you review the current and historical rates for savings accounts and money market accounts, keep the following in mind:

  • Fees: The best offers come with no monthly maintenance fees. Even a small fee can wipe out much of the yield, particularly in the current low rate environment. Before opening an account, make sure you understand what if any fees you’ll pay. The best savings accounts don’t charge fees.
  • Minimum Deposit: Many bank accounts require either a minimum deposit or a minimum balance going forward, or both. Be sure you know these requirements as you shop for the highest yield.
  • Tiered Rates: Some, but not all, banks offer tiered rates based on the amount of your balance. While one might assume that the rates go up as the balance goes up, that’s not always the case. Some banks actually lower the rate for balances over a certain limit.
  • Online Banks vs Traditional Banks: As a general rule, online banks offer the highest rates. Many brick and mortar banks offer yields as low as 0.01%. It’s as if they don’t want your money. In contrast, online banks offer yields of 1.00% APY or more.

Checking Account Rates

With checking accounts, the interest rates tend to be lower. That’s generally fine because most people don’t keep a lot of money in a checking account. Any extra money one has should be moved over to a high-yield savings product. That being said, many banks do offer interest checking accounts. Here it’s critical to consider fees, which are more common than on savings and money market accounts.

Finally, if you know of other bank accounts or deals we should include in our list, please leave a comment below.

I’ve banked with Ally Bank for years, opening both a savings account and CD. In this Ally Bank review, we’ll look at rates, fees and account types.

Ally Bank Review

Just over ten years ago, General Motors was having trouble remaining in business. Its subsidiary that provided customers financing for automotive purchases, GMAC, converted to a bank holding company. The goal was to take advantage of the Troubled Asset Relief Program (TARP).

In return, it received $5 billion from taxpayers through the government. By this time, GMAC Bank, a division of GMAC, already offered retail banking. Its products included savings accounts, certificates of deposit, and money market accounts.

In an attempt to distance itself from the faltering GM brand, GMAC Bank re-branded itself as Ally Bank. It focused on offering a high-yield interest product. And it began actively seeking new customers and depositors. Later, the bank’s parent company, GMAC, also re-branded itself to become known as Ally Financial. Today, Ally Bank offers some of the most competitive banking products around.

Opening an Account with Ally Bank

Here are my experiences from the Ally Bank account opening process. As I visited the website to begin my application, Ally Bank warned me that I would need my driver’s license (or an alternate state or military identification number) in addition to my Social Security Number to proceed.

Like some other banks, Ally performs a credit check to verify identity. But they may also reject your application if they see you as a credit risk. However, getting rejected because of your credit history is unusual. But since this bank was once a financing company and then a bank holding company, this strategy may become more prevalent.

It look less than two seconds once I submitted my application for Ally Bank to inform me my application was approved. Once inside this virtual gate, I was able to choose whether I wanted to receive paper or electronic statements. I always choose electronic to cut down on paper waste. I wish more services would offer this option from the beginning.

Here’s another great feature: I can create as many separate savings accounts, with their own account names and numbers, as I want. At this point in the initial set-up, I could also add money market accounts and certificates of deposit.

I set up two separate savings accounts, both to be funded electronically from my Citizens Bank checking account. Like configuring linked accounts at any other bank, I will be required to verify two small deposits to ensure I am the owner of the linked account. Options for a one-time initial deposit or a recurring automatic savings plan are available.

Ally Bank then required me to create my security settings for viewing my account information and activity online. The bank has combined most of the security features that have become commonplace over the past few years. I created a username and a strong password, including mixed case letters and numbers.

Then I selected some secret code words and an image I can expect to see each time I log in. I also chose three security questions and answers. Ally provides the option to register the computer you use for accessing the website. This avoids repeated security questions at each online session.

If Ally Bank does not recognize the computer you are using to log into your account, they will send you an email with a single-use password to further confirm your identity. I have not seen this feature implemented anywhere else.

Using the Ally Bank Savings Account

Once logged in, I was impressed with the clean look of the interface.

You can transfer among your Ally accounts and two and from other accounts for free. But keep in mind, for money market and savings accounts there is a limit of six withdrawals per period, due to government regulations.

Ally Bank charges no account maintenance fees and requires no minimum balance. If you exceed the six withdrawals mentioned above, Ally will charge a $10 fee. Cashier’s checks and wires carry an additional cost. A returned deposit item, if a check you send bounces or if you don’t have funds in an external account to cover a transfer, will cost $25.00

The bank is also drawing attention to their 24-hour customer service availability and the plain language used throughout their website. I have not yet worked with Ally’s customer service, but I will be sure to report any future frustrations.

Ally Bank Products

High Yield Savings–This is the best product Ally has to offer in my opinion. The current APY is a robust 1.25%. Ally routinely ranks in the top 1% of all banks in terms of two very important factors: interest rate and customer service.

Interest Checking–It’s not easy to find a high yield online checking account these days. Ally tries their best, God bless ’em. For balances less than $15,000, Ally offers a 0.10% APY. And for balances greater than $15,000, the APY is a much more respectable 0.60%. Either way, Ally charges no monthly maintenance fees, which is rare today when looking for a high quality checking account.

CD’s–If you don’t mind losing a little liquidity for a higher interest rate, a CD is a great option for better returns. Ally has a wide variety of CD options, including high yield CD’s, a raise your rate CD, and a no penalty CD. The no penalty CD is perhaps their best offer, providing a 1.50% APY on balances of more than $25,000.

Money Market–Money Markets have always puzzled me. You see the interest rates above for CD’s and checking. And then you check the Ally Money Market account, and it earns a 0.90% APY on all balances. What would possess someone to open a money market account vs. a savings account? The Ally Money Market account does provide a debit card and the use of checks if needed. But you’re sacrificing a lot of interest for a touch of convenience.

Ally Invest–Ally recently purchased the online discount broker TradeKing and absorbed its business. Now, you can not only open a deposit account, but an investing account with Ally Bank. Trades are charged at a flat rate of $4.95, and options contracts run you $0.65 per.

Is Ally an Ally of Your Personal Finances?

ally1

Opening my account with Ally Bank was painless and quick, and I like how the website operates so far. After my initial deposit transfers, I will have a better idea of how quickly funds are available and can be transferred back to external accounts. I will return with more information at that time.

The main question I have moving forward is how long Ally Bank will be able to maintain their position as one of the highest among high-yield savings accounts. Banks have long used high interest rates to lure new customers, only to drop the rates when they become confident in their position as leader.

The American Bankers Association (ABA) sent a letter on May 27, 2009 to the FDIC requesting that Ally Bank be forced to lower their deposit interest rates, citing the bank’s unfair competitive advantage. It is unfortunate that the ABA would take this stance with savers forced to settle for interest rates that will not reach the rate of inflation going forward. The ABA has since removed the letter from the organization’s website, and I would suspect top tier interest rates so long as Ally is in business.

If you are interested, apply for an Ally Bank savings account here and let me know about your experience by commenting below.

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The IRS just released IRA contribution limits for 2018. Unfortunately, the limits didn’t change from 2017. The ROTH IRA income limits, however, did change. Here are the details.

You have more time than you might think to contribute to your traditional and Roth IRAs. Rather than an end-of-year deadline, you have until you file your taxes to make that contribution. Federal taxes for 2017 will be due on April 17, 2018, so this is the deadline for establishing and contributing to your 2017 IRA. If you file for an extension, however, your IRA deadline will not be extended; don’t miss the April contribution deadline.

IRA Contribution Limits for 2018

If you’re under age 50 and contributing to your 2017 IRA, the maximum you can contribute to your Traditional and Roth IRAs combined is $5,500. Taxpayers 50 or older can make an additional contribution of $1,000 for 2017 between both types of IRAs for a total of $6,500.

Year Under Age 50 50 and Older Standard Deadline
2018 $5,500 $6,500 April 15, 2019
2017 $5,500 $6,500 April 17, 2018
2016 $5,500 $6,500 April 17, 2017
2015 $5,500 $6,500 April 18, 2016
2014 $5,500 $6,500 April 15, 2015
2013 $5,500 $6,500 April 15, 2014
2012 $5,000 $6,000 April 15, 2013
2011 $5,000 $6,000 April 17, 2012
2010 $5,000 $6,000 April 18, 2011
2009 $5,000 $6,000 April 15, 2010

These contribution maximums are further limited by taxable compensation. If your modified adjusted gross income was only in a given year, that is your IRA contribution limit in that year.

Open an IRA

  • Betterment: Low fees and very easy to get started
  • Ally Invest: $4.95 equity trades
  • Wealthfront: No management fees on the first $5,000

Traditional IRA rules

Contributions to a traditional IRA are tax deductible, but depending on your income and employment situation, the amount that can be deducted from your income varies. Any taxpayer with a filing status of single not covered by a retirement plan from their employer can deduct their traditional IRA contributions in full. For those who are covered by a retirement plan at work, when modified adjusted gross income reaches a certain level, the allowed deduction for traditional IRAs begins to decrease to zero. If you’re in this situation, you can still contribute to a traditional IRA, but you won’t benefit from the tax deduction as much or at all.

2017

Here are the rules for 2017:

  • For single taxpayers covered by a workplace retirement plan, the phase-out range is $62,000 to $72,000, up from $61,000 to $71,000.
  • For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is $99,000 to $119,000, up from $98,000 to $118,000.
  • For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $186,000 and $196,000, up from $184,000 and $194,000.
  • For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

(Source: IRS)

2018

And here are the changes for 2018:

  • For single taxpayers covered by a workplace retirement plan, the phase-out range is $63,000 to $73,000, up from $62,000 to $72,000.
  • For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is $101,000 to $121,000, up from $99,000 to $119,000.
  • For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $189,000 and $199,000, up from $186,000 and $196,000.
  • For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

(Source: IRS)

Roth IRA rules

Your income limits your ability to contribute to a Roth IRA up to the maximum. This is different than the traditional IRA, where income affects tax deductions. Here, income limits contributions. You could be penalized by the IRS if you contribute to your Roth IRA beyond your allowable limit.

2017

Here are the 2017 limits (sources same as above):

The income phase-out range for taxpayers making contributions to a Roth IRA is $118,000 to $133,000 for singles and heads of household, up from $117,000 to $132,000.  For married couples filing jointly, the income phase-out range is $186,000 to $196,000, up from $184,000 to $194,000.  The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

2018

And here are the 2018 limits:

The income phase-out range for taxpayers making contributions to a Roth IRA is $120,000 to $135,000 for singles and heads of household, up from $118,000 to $133,000. For married couples filing jointly, the income phase-out range is $189,000 to $199,000, up from $186,000 to $196,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

Plan for 2017

An IRA is an important piece of a retirement plan, and it should be high on most people’s priority lists, right below investing in a 401(k) up to the employer’s matching maximum.

If you have a good idea of what your income and tax situation will be in 2017, you can determine how much you can and will contribute to your 2017 IRA throughout the year. A convenient way to contribute is through automatic investments, so you can set it by December 31 and forget about it for the entire year. If you plan to invest in the stock market and don’t want to invest in the IRA with your full year’s contribution at once, you can take advantage of dollar-cost averaging to reduce your exposure to swings in the market.

Set up an automatic transfer from your checking account to your IRA custodian of choice. I use Vanguard for my retirement funds, for example. Because there is no cost to transfer, I would create a plan that places my investment each week. With 52 weeks in a year and a $5,500 maximum contribution, that’s about $105.76 a week or $458.33 a month.

Take Control of Your IRA

Track and Analyze your Investments for Free: The easiest way to track and analyze all your investments, regardless of where they are located, is with Personal Capital’s free financial dashboard. By far the best financial tool we’ve ever used, Personal Capital enables you to connect all of your 401(k), 403(b), IRAs, and other investment accounts in one place. Once connected, you can see the performance of all of your investments and evaluate your asset allocation.

retirement fee analyzer

You can also see the fees you are paying through Personal Capital’s Retirement Fee Analyzer. I was stunned to learn that the fees in just my 401(k) could cost me over $200,000, requiring me to put off retirement for 3 years! They also offer a free Retirement Planner. This robust tool will help you plan for retirement and show you if you are on track to retire on your terms.

retirement planner

Try Personal Capital

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The low interest rates offered by even the highest-yield savings and money market accounts are disappointing for savers. Even as the Fed starts to raise rates, savings account yields haven’t budged. So, do we just give up the idea of earning anything on our savings?

cd-ladder

Well, not necessarily. One alternative is to create what’s called a CD Ladder.

If you don’t want to tie your short-term cash in a riskier investment, you can consider certificates of deposit (CDs). Typically, CDs carry penalties if you withdraw your cash before they mature. In other words, you will want to invest in a CD designated with a length of time that represents when you would like to get your money back (plus interest). If you need to liquidate the CD early, a bank may take away some or all of the interest that has accrued since the time of the deposit.

In addition, the longer the CD is held, the higher the interest rate you’ll earn. A 5-year CD, for example, will pay a much higher yield than a 12-month CD. The downside, of course, is that you are much more likely to liquidate a 5-year CD in an emergency, losing money to the penalty most banks charge for early withdrawals.

By using a CD ladder, however, you can get the higher rates that accompany longer terms, while also reducing the risk that you’ll need to liquidate a CD before it matures.

So, how does it work?

The strategy is simple. You will initially buy a number of CDs, all with staggered maturity dates. Every few months, one of the CDs will mature and you can then roll that cash into a new CD (or use the cash for your short-term expense needs). Eventually, you will only need to buy CDs with the longest maturities, but the constant maturation of certificates will continue. This provides you with a rolling source of interest and/or principal, which you can use or reinvest depending on your finances at the time.

The process consists of two phases. For this example, we’ll use the latest rates from online banks, which often do not have a minimum balance requirement.

Setting up the CD Ladder

These are the CD products and interest rates we will be dealing with. These are example rates, so check with your bank to determine the interest you’ll earn.

Duration APY
3 Month 0.30%
6 Month 0.60%
9 Month 0.64%
12 Month 1.05%
2 Year 1.30%
3 Year 1.50%
4 Year 1.40%
5 Year 1.65%

We can use this combination of maturities to create a ladder that provides us with a roll-over, or a chance to withdraw part of the cash, every three months. During Phase 1, this will require a combination. By Phase 2, though, all CDs will be of the 5-year maturity, which usually offers the highest interest rates. Remember that five years is as long as you want to go with the CD ladder. If you have funds that you can afford to part with for more than five years, you should look at investing them in a slightly riskier (and more lucrative) investment.

Alright, let’s get started. Assume that we have $10,000 that we’d like to begin rolling into certificates of deposit. Since the longest we want to go is five years, we can split this evenly over time at $2,000 per year. Our shortest maturity is three months, so we can tackle this in terms of $500 a quarter.

In the first phase, start on day zero by buying CDs with the following maturities:

  • $500 in the 3 month CD
  • $500 in the 6 month CD
  • $500 in the 9 month CD
  • $2,000 in the 12 month CD
  • $2,000 in the 2 year CD
  • $2,000 in the 3 year CD
  • $2,000 in the 4 year CD
  • $500 in the 5 year CD

At the end of the each of the first three quarters, withdraw each quarter’s $500 plus interest and use the funds to buy new 5 year CDs. For the sake of the example, we’ll withdraw the interest and place it in another bank account to use as income. To make more of your money, you should “reinvest” your interest each quarter.

Watch out for automatic renewal. At Ally Bank, for example, CDs are automatically renewed for the same duration when they mature. During this stage, you will need to be proactive to withdraw the funds at maturity and use them to buy the next appropriate CD.

After one year of doing the above, this is what we have:

  • $2,000 maturing today (original 12 month CD)
  • $2,000 maturing in one year (original 2 year CD)
  • $2,000 maturing in two years
  • $2,000 maturing in three years
  • $500 maturing in four years
  • $500 maturing in four years, three months
  • $500 maturing in four years, six months
  • $500 maturing in four years, nine months

With the $2,000 maturing today, buy:

  • $500 in the 3 month CD
  • $500 in the 6 month CD
  • $500 in the 9 month CD
  • $500 in the 5 year CD

Do the same with the $2,000 that matures each year until you have a total of 20 CDs, each maturing every quarter for the next five years. Once this process is complete, you can allow the automatic renewals to take effect, except for when you need to withdraw your money.

Drawbacks of the CD ladder

As long as rates for long-term CDs remain higher than short-term CDs — as they do most of the time — you may notice something. This method, in fact, results in earning less than simply investing your entire $10,000 in a 5 year CD. So, why would you go this route?

It’s because the CD ladder provides you some protection against losing interest if you need to withdraw your funds early. At Ally Bank, the penalty is not significant. This bank will charge you the amount of three months’ interest if you withdraw a CD with a maturity of 12 months or less. They’ll also charge 6 months’ interest if you withdraw a CD with a maturity of longer than 12 months.

Another possibility to consider is that you might earn more interest in a high-yield savings account than you would in a short-term CD. When this is the case, use a specially designated savings account rather than the short-term CDs.

We could have made this process easier by setting up a ladder that results in a turnover of $2,000 once a year rather than $500 every quarter. However, this method allows you to better decrease the possibility of losing interest. This is because you will always be able to access a portion of your investment within three months.

In combination with a savings account, which is liquid at all times, you can earn consistently higher interest rates with less risk than using five-year CDs that mature only once a year.

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