Best savings account interest rate in the US?

December 20, 2016 5:56 PM

I'd like to find a savings account that has a higher interest rate than what I have now. 2% would be great and 3% or more would be amazing. My current savings account is 100% online. All I do is transfer in some money every month from my checking account at another bank. I am looking for a similar setup. It has to be a bank that accepts national customers since chances are if there's a good regional bank that only accepts regional customers, I don't live near it. What do you recommend?

I have looked into CDs and other investments but I just want to keep a savings account for right now.

posted by cokelessrome to Work & Money (16 answers total)

Here you go to fatwallet

You're not gonna get much higher than 1%.
posted by sandmanwv at 5:58 PM on December 20, 2016 [1 favorite]

Patelco Credit Union has a Money Market account with a rate of 3% on the first $2000, 2% on the next $3000, and 1% on the next $5000.

They're local to San Francisco, but you can deposit and withdraw at almost any credit union in the US.
posted by zippy at 6:10 PM on December 20, 2016 [6 favorites]

The best I could find recently, without fees and minimum balances, is the American Express Personal Savings Account at .90%
posted by BlahLaLa at 6:21 PM on December 20, 2016 [1 favorite]

Anything over ~1% is going to have gimmicks that you have to fulfill (x direct deposits per month, y debit transactions). 1% is the market rate so anything above that has to make money for the bank someplace else (like debit transaction fees) and/or limited to small amounts like the Patelco CU that zippy linked to.
posted by Candleman at 6:22 PM on December 20, 2016 [3 favorites]

With the Patelco money market, the breakeven point to reach 1% on the balance is $24,000. Less than that and you're earning a greater interest rate (you can plug numbers into the calculator they provide on the link above).

balance - blended apy
$5000 ..... 2.4%
$10000 .... 1.7%
$24000 .... 1.0%
$50000 .... 0.74%

posted by zippy at 6:40 PM on December 20, 2016

There really aren't any great savings interest rates out there (and 1-year CD rates aren't much better). Approaching 1% is about the best you can do. And among the banks offering rates in that vicinity, there's not a lot of difference in terms of service or convenience either. I've been using DiscoverBank and they've been fine, but there's nothing outstanding about them. I'll be curious to see if anyone has an online bank that really knocks their socks off.
posted by DrGail at 6:46 PM on December 20, 2016

The best I've been able to find is 1% at Ally.
posted by J. Wilson at 7:38 PM on December 20, 2016 [1 favorite]

The Barclay's Dream Account has no minimum balance but caps deposits at $1000/month.

APY is 1.04%.

Plus bonuses if you make consecutive deposits for 6 months.
Plus bonuses if you make no withdrawals for 6 consecutive months.

I'm pretty sure you can transfer directly from your outside checking but haven't actually done it myself.
posted by meemzi at 7:51 PM on December 20, 2016

Response by poster: Dr Gail, Goldman Sachs has a 1.05% interest rate and it is very easy to use. I recommend them myself other than the fact that I am looking for a better interest rate.
posted by cokelessrome at 5:31 AM on December 21, 2016 [1 favorite]

Best answer: ING Direct used to have rates around 4% before the 2008 crisis, but that's fallen and is now in line with other savings rates.

Overall, the interest rates on savings and checking accounts are generally very low. Special deals like the Patelco MM and other finds on the Fatwallet/Nerdwallet sites generally have substantial limitations. For example, a local credit union offers 7.5% for checking, but only on the first $500, and requires direct deposits and electronic statements, but 0.2% over the $500. That's just a few dollars a month at the high interest rate.

It is worth noting that the current (12 month) inflation rate in the US is 1.7%, so anything less than that is actually losing value, though admittedly somewhat slowly. If you're only looking at short term savings, that may be fine. However, for the long term, if what is scaring you away from investments is the incomprehensible complexity presented to newcomers, there are some excellent resources at those web sites that explain basic investments, especially things like index funds, that you should read up on, even if you don't ultimately go that route.
posted by jgreco at 6:17 AM on December 21, 2016 [2 favorites]

2% is better than all of the 2 or 3 year CDs I can find on a quick search. It doesn't surprise me much that you're not finding a 2% return on a savings account right now, though I guess I'm as interested as anyone to know if such a thing can be found.
posted by craven_morhead at 9:40 AM on December 21, 2016 [1 favorite]

It's not the rate you're trying to get, but Ally just announced an 11-month no-penalty CD at 1.25% interest. You can break the CD at any time after the first 6 days with no penalties, so it effectively works as a savings account. You have to withdraw the entire CD (no partial withdrawals) so I broke my savings account into 4 different CDs so that if I have to withdraw some but not all of the money, I'll still have some money in the other CDs.
posted by matcha action at 11:02 AM on December 21, 2016

I keep my emergency savings in a municipal bond fund that pays tax exempt dividends of around 3%. The last couple months the share price has declined enough to eat up the dividends, but I still feel it is pretty stable. I am in the USA.

More complicated than a savings account, no FDIC insurance, and there are minimum investment rules. I hope the bonds it invests in, are mostly for good city infrastructure rather than more useless and annoying football stadiums, but I don't keep close enough track to really know for sure. :(
posted by elizilla at 12:52 PM on December 21, 2016

I think Lake Michigan Credit Union has one of the best gimmicky checking accounts nationally. They pay 3% on balances up to $15k, assuming you jump through some hoops. If you already use a credit card 10x a month (there's no minimum transaction amount) and can easily setup a recurring deposit, it's pretty easy to play these games. They do not require you to be local.

https://lmcu.org/banking/checking/checking_max.aspx
posted by stobor at 11:52 AM on December 22, 2016

One thing to keep in mind if it requires you to make debit card transactions to get the interest rate: you're missing out on credit card transactions. Credit cards are safer, but they also can come with rewards. For example, my Citi Double Cash card is 2% cash back on every transaction. I don't know if that matches the value of the 3% mentioned above because I don't feel like doing math right now, but it's worth considering.
posted by J. Wilson at 10:20 AM on December 30, 2016 [1 favorite]

If you spend $12k in a cash back card, the best of which are at 2%, you'll make $240. And be out 12k. If you keep it in a 3% rewards checking account, you'll still have it, plus $360. But you could keep up to $15k (in the one mentioned above) and make $450.

I like rewards cards but the amount you'd have to spend on them to win out over a rewards checking account is... more than most people of moderate means should probably be spending anyway. It's nice if you can do it on top of a rewards checking account, but instead of just doesn't make sense for most people (including the ones who would rather have the money they're going to spend to pay the credit card bills in a higher interest account in the mean time).

The best interest rates now are in rewards checking accounts, like the one that stobor linked to at Lake Michigan FCU. The highest ones are 4.5-5%. The catch is that they all have hoops for getting the higher rate, and limits on how much of your money you can earn that high rate on. I think it would be pretty tricky to maintain more than one of these at a time, but depending on how much you want to put aside, that might not be an issue at all, and it's still better to have part of your money at 3.5% and part at 1% than all at 1%.

I think that Doctor of Credit has the best list of these accounts. It's the only one I've seen that includes local ones (that may all be useless to you, but the highest ones are 4.5% up if you happen to qualify geographically). People also comment on their experiences with the accounts, which can be helpful.

This is a fun rabbit hole to fail into if you're into that kind of thing, and it looks like there are people who get a lot of mileage (and invest a LOT of time) in maximizing their ROI through multiple rewards checking accounts, account opening bonuses, and rewards credit cards, and you can read about their adventures on Doctor of Credit and Reddit.

My recommendation For keeping it simple though would be to start with one of the higher rewards checking accounts on the DoC list that has a good customer service reputation and hoops that seem doable to you (that same site has discussions about meeting spending, direct deposit, and debit requirements), and that lets you earn the interest on at least $15k, and set it up. If you have more than their limit, put it in one of the high yield online savings accounts that get around 1%. I like Aliy, but there are a bunch that are very comparable. And then maybe a cash back credit card :).
posted by Salamandrous at 7:50 AM on January 16, 2017