Some Online Savings Yields Jump Upwards, Others Decline

After several depressing months of steadily declining rates, the yields on a few online savings accounts rates rose a tad. With .45 percentage points, HSBC Direct had the biggest jump and at 3.5% reclaims the title as the highest yielding online savings account from a big-name bank with no minimum balance. However, this is only a promotional rate through August 15. Tricky like a rock rhythm. (I found the big red “DEPOSIT MORE NOW” button in the announcement email HSBC sent out especially amusing). You might instead want to look at the online savings account offered by Provident Bank at 3.5%. That’s down from 3.75 but the cut was tracked to the decrease in the federal interest rates. So with the Feds saying we’re done with cuts for the near future, it’s probably decent bet the Provident Bank rate will hold. Here’s a good number of the rates that have gone up, and those that have stayed the same or decreased since the last time we posted this info.

For the most up-to-date information on these rates,’s dynamically updated rate charts is where you want to go.

Increased Rates

HSBC Direct: 3.5% APY (no min) (+.45)
Umbrella Bank: 3.4% APY (min of $100) (+.15)
Etade: 3.15% (no min) (+.1)

Unchanged or Decreased

OneUnited: 3.6% APY (min of $1000)
Provident Direct: 3.5% (no min) (-.25)
Washington Mutual: 3.30% APY
iGoBanking: 3.28% (no min)
FNBO Direct: 3.25% (no min)
M&T e-Money Market: 3.25% (no min) 3.14% (only for 90 days) (-.2)
WT Direct: 3.16% (min of $10k) (-.15)
Savings Square: 3.05% (no min) (-.2)
E-Loan: 3.01% APY (no min)
ING Direct: 3.0% APY (no min)
Capital One: 3.0% (no min) (-.5)
GMAC: 3.0% (no min)
Emigrant Direct: 2.75% APY (no min)
Citibank e-Savings: 2.65% APY (no min) (-.5)

(Photo: Getty)


Edit Your Comment

  1. Bladefist says:

    Can consumerist please add “AM Trust direct” to their lists? They always forget. Their rate right now hasn’t made the jump, but before the Fed lowered all the rates, they were the highest paying. Also, they sent me a promotion, if I setup an automatic withdrawl from my bank, to pull at least $100 for 3 months, they would give me $50. And I did. And they did.

  2. I got a new account: paperless savings account with my local credit union. Unlimited transfers per month (takes about 3 days), 1 in person transaction per month ($10 per person visit afterwards), and a nice savings rate of 3.75% APY. ($500 minimum).

    Sure beats the old ING account I used to have.

  3. Bladefist says:

    Another place that *typically* has a high rate, is paypal money market. I know paypal isn’t real popular here, but I make a great rate off the money in my account, and I get 1% cash back on debit card signature purchases.

  4. fluiddruid says:

    I’m still with ING, mostly due to the fact that their service operates so smoothly. However, as my savings rise, I’ll be watching to see if they start increasing their rates as well – nearly a full point behind is too much for me.

    silencedotcom, thanks for the tip about your credit union. Anyone know a good place to search for such programs?

  5. SonicMan says:

    Um. E-trade may have just gone up. But they are still lower than what they were 3 months ago.

  6. @fluiddruid: Yep, here you go! []

  7. @fluiddruid: The website I posted (clicked submit too quick!) has, from time to time, credit union programs. I would do a Google Maps search for credit unions in your zip code, then check out their websites. It might take a little bit of legwork, but it could be worth it in the end.

  8. Dobernala says:

    @Bladefist: Even if we ignore Paypal’s egregious abuse of customers for a moment, the fact that they’re not FDIC insured and have their banking policies regulated makes them a very poor choice.

  9. Dobernala says:

    @Dobernala: (don’t have their banking policies regulated)

  10. Munsoned says:

    How about Fidelity? They have a “smartcash” account that has no minumums, pays an OK rate of interest, but also reimburses you for ALL ATM fees–they’ve paid me over $20 since January when I signed up. This alone makes the account worth a look. They partner with other banks (First Third is the one that “holds” my account), so the account is FDIC insured as well. They don’t advertise this account much, but I’ve been extremely happy with the service so far.

  11. Munsoned says:

    One thing I forgot about the Fidelity account, I don’t think they have any maximum reimbursement on ATM fees, like a lot of other online banks…

  12. Bladefist says:

    @Dobernala: I understand that, but, if you take that risk, they can make you a lot of money. I guess it’s more of a risk-investment then a savings account.

    However, I don’t see there is much risk. If you abide by their policy, you shouldn’t have an issue.

  13. skittlbrau says:

    I know its not a savings account, but I am in mad love with my Schwab Investor Checking account. Interest on my checking, excellent customer service, and every ATM is free. Awesome!

  14. packetsniffer says:

    Why does the federal interest rate cut cause your private bank to cut your interest rate? Shouldn’t that give them reason to increase your interest rate?

  15. Coelacanth says:

    @SonicMan: Yes, but savings rates are generally tied directly to the Federal Funds rate. If the Fed decreases the lending rate, then expect your savings rate to decline commensurately.

    @packetsniffer: The bank is “borrowing” your money when you deposit it into your account. They’re using it to finance their own operations, issue loans to others, and for their own investments. When the cost of borrowing money (pegged by the Fed) decreases, so do the savings yields.

  16. spinachdip says:

    @fluiddruid: Yeah, I would have jumped ship from ING Direct if they weren’t so damn non-assbackwards, which counts for a lot in this business. Do you know if their mutual funds are any good, and how well the savings and investment products are linked?

  17. chrisjames says:

    @Bladefist: I think that around here, “their policy” has been proven to mean “their whim.”

  18. johnva says:

    @spinachdip: I haven’t looked at them in great detail, but the mutual funds don’t look that great to me. Fairly high expense ratios, etc. There are of course a lot of funds they offer, so YMMV, of course.

    But in general I would recommend that you not make a decision about what to invest in based on where you bank. It’s a better idea to objectively compare many investments available everywhere and then find the cheapest, most convenient way for you to buy the ones you want. Try looking at the Morningstar fund screener, etc. You don’t need bank integration, in general, because it’s so easy to transfer money back and forth online between investments held at different places. I have an ING Electric Orange checking account and have set up a monthly automatic investment with Vanguard that is drawn from that checking account.

  19. spinachdip says:

    @johnva: Thanks for that. I thought it would be nice to be able to link my investments to Orange, but that’s really a minor, minor consideration.

  20. stinkbug says:

    I can’t really vouch for FNBO Direct yet, but I recently received a promo offer from them: $50 for opening up a new account with them. I don’t think there was a minimum deposit, but you have to wait 90 days before the $50 is fully yours.

    So in another 80 or so days I’ll see if I’m still happy with them….

  21. Bladefist says:

    @chrisjames: too-mae-to, too-ma-toe

  22. packetsniffer says:

    Right, but if the cost for the banks to borrow money from the Fed gets reduced, why wouldn’t they extend the savings to you by paying you a higher interest rate?

  23. RChris173 says:

    I second bladefist, I too have an AMTrust Direct account and when I opened it in November it was one of the highest paying, in the +5.1% range! Now, because of the Federal Reserve, it was lowered, but will likely increase. Awesome bank and they have local brances in Palm Beach where I live even though they have their corporate offices in Ohio.