Today’s Best Rate for Online Savings Account: Discover Bank

The top online savings account rate with FDIC insurance currently goes to Discover Bank. Their online savings product comes with a minimum balance requirement of $500 and an interest rate which, they claim, is 4x the national average.

Check out Discover Bank High Yield Savings Accounts to learn more.

Details, Terms and Conditions of Account:

- The APY for the Online Savings Account as of December 14, 2010 is more than 5 times the national average APY for interest-bearing savings accounts with balances of $500 as reported by Informa Research Services, Inc as of December 14, 2010. Although the information provided by Informa Research Services has been obtained from the various institutions, the accuracy cannot be guaranteed. Rates are subject to change at any time.

- Assumes principal and interest remain on deposit and interest rate does not change for the selected time period.

- You may make up to six preauthorized transfers from your Online Savings Account per statement cycle, including automatic and telephone transfers.

- National Average APYs based on top 50 U.S. banks by deposit provided by Informa Research Services, Inc. as of 12/14/2010.

- Annual Percentage Yield (APY). APY applies to personal accounts only. Online Savings Account rate based on a $500 minimum balance. Rate may change after account is opened. Fees could reduce earnings on the account. Advertised rate is valid as of 12/14/2010 and subject to change daily without notice.

SmartyPig Review: Unique approach to savings with great rate!

The SmartyPig online savings account is offered in partnership with West Bank and comes with one of the best interest rates on the market. We were surprised to hear that on May 19, 2010, the APY on total goal balances of less than $50,000 will go up to 2.15% (the current APY is 2.01%). This positive interest rate adjustment goes against current money market and online savings rate trends. The average savings rate provided to money market accounts sits at a meager 0.90% APY and has been relentlessly dropping over the course of the last year and a half – which makes SmartyPig’s recent rate rise a stand out move.

SmartyPig’s Unique Approach to Savings:

What makes SmartyPig’s savings account unique is it’s design. It is made specifically to help consumers reach financial goals and avoid credit card debt by saving for big items. In other words, the creators of SmartyPig thought that consumers wanted a way to save cash for large purchases they may have previously put on a credit card, such as a home makeovers, large vacations, holiday gifts, etc. – and you do this by setting up goals. Tell SmartyPig what you want and use their calculators to figure out how much you will need to set aside each month before you will have enough cash for the purchase. Friends and family can also contribute to your goals by depositing money into your account.

SmartyPig’s Phenomenal Interest Rate:

If you’ve compared interest rates lately you’ll know that this rate more than doubles the current national average for similar accounts. The creators of SmartyPig claim they can provide such high savings rates to their customers because most customers will keep their savings stocked away for longer periods of times (to complete their financial goals). Plus, just like any traditional online bank your money is federally insured by the FDIC through their partnership with West Bank.

Positive Features of this Account:

- Extremely high interest rate

- Help save for specific purchases while avoiding the use of credit cards

- Social networking features for encouragement and participation of family and friends

- Bonus percentage at retail partners!

- fund via ACH transfer

- FDIC insured

Discover Bank’s CD Rates and Money Market Account

Discover Bank, originally known as Greenwood Trust Company before joining Discover Financial Services in 2000, offers FDIC insured bank CDs (certificates of deposit) as well as money market accounts and high yield online savings accounts. By consistently offering interest rates that beat the national average they have grown to manage over $25 billion in consumer deposits.

Discover Bank’s Popular Products:

Discover Bank’s 12-month CDs : This is a 12 month timed deposit. You will earn a fixed interest rate and your money is FDIC insured. You will want to make sure you can keep your money in this account until the duration is over. There may be penalties for early withdrawal.

Discover Bank CDs 24-month CDs: This is a 24 month timed deposit. You will earn a fixed interest rate and your money is FDIC insured. You will want to make sure you can keep your money in this account until the duration is over. There may be penalties for early withdrawal.

Discover Bank Money Market: This is a liquid account. You will earn a variable interest rate and your money is FDIC insured. You can make fast and free online money transfers and you can access your account from anywhere (online, ATMs, w/ Discover debit card, etc).

SallieMae: CD rates and savings account review

SallieMae, traditionally a provider of student loans both federally and privately, has entered the online banking retail space by offering both “high yield savings accounts” and high interest CD’s (certificate of deposits). These accounts are federally insured by the FDIC and SallieMae claims the rates to be 5x the national average.

Their online savings account comes with no monthly fees and no minimum balances, similar to other online banking products such as Ally Bank’s online savings account and American Express’s high interest savings account.

Features of Online Savings Account by SallieMae:

• No minimum balance required
• No monthly fees
• Interest compounded daily
• FDIC insured
• 1.10% APY
• 10% annual match on Upromise earnings.
  

Features of CD accounts (Certifate of Deposits) by SallieMae:

• No monthly fees
• FDIC insured
• minimum deposit not disclosed – contact SallieMae for this information

SallieMae’s interest rates are subject to change without notice. Like most CD’s, the interest paid is fixed for the life of the product. The interest paid on the online savings account, however, is variable and subject to change based on market conditions.

Lending Club’s Net Annualized Returns to Investors: 9.65% APY

Lending Club has come into our radar after raising their net annualized returns to their investors by 0.60% APY. A few months ago Lending Club had provided average returns of 9.05% APY, now this number has increased to 9.65% APY.

What is Lending Club?

Essentially Lending Club has set out to eliminate the complexity of the banking system by allowing borrowers and lenders to directly invest from each other through a moderated online platform. Investors open an account and build a portfolio of loans. Investors can select the loans they would like to fund based on how aggressive their investment style is. The investor may also spread their deposit over hundreds of different loans to diversify their savings. Since Lending Club’s inception in 2007 they have provided investors with an annual return of 9.65% APY and were recently given the “Breakthough idea of 2009″ award by Harvard Business Review.
Lending Club Facts:

• As of February 28, 2010, Lending Club has funded over $89,000,000 in loans and provided $6,200,000 in interest to it’s individual investors.
• Lending Club’s approval rate for loan applications sit at roughly 14% (only prime borrows approved), reducing risk for investors.
• Extremely low default rate on loans – less than 3% after 18 months
• Eliminates the high cost of traditional banks to provide you with better rates

Lending Club’s Recognition in the Press:

• “Breakthrough idea for 2009.”
  Harvard Business Review
• “As major financial institutions stumble or fail completely, online lending sites like Lending Club are on the rise.”
  CBS News
• “…the increased efficiency of cutting out the banks…”
  The New York Times

Capital One’s online savings account sign-up bonus: $50

Capital One has a pretty decent promotion going on with their online savings account. Thanks to BankVibe reader James for tipping us off on this one!

When you sign up for Capital One’s online savings account and fund it with at least $10,000 they will toss in an extra $50 into your account. This account is also yielding a fairly respectable 1.60% APY. 

Click here and use the promotional code: SAVER50DF

…so if my math serves me correct, this account essentially yields an APY of 2.10% APY for the first year when you add in the $50 bonus (assuming you only fund it with the minimum balance required -$10k). 

Quick breakdown:

$50 is 0.50% of $10,000.

add the 0.50% to the 1.60% they already provide and you have just netted yourself a 2.10% APY.

The national average for money market rates sits at roughly 1.25% APY to put this offer in perspective…

Provident NJ Direct limits withdrawals to $2k per day

We just received an interesting email from a Provident NJ Direct customer who took advantage of their Power Savings Account we reported on in April.

As a quick recap, the Power Savings Account offered by Provident NJ Direct currently provides a promotional 90 day APY of 2.0%, which is then followed up by either a 1.0% interest rate or 1.50% interest rate (depending on your minimum balance). For balances above $10k you will earn 1.50% APY and for balances between $50 – $9,999 you will earn the lower 1.0% APY.

This is an online savings account which features no fees or service charges as well as an ATM card. This account soley operates online and is available throughout the country.

The email we received highlights the fact that apparently Provident NJ Direct only allows withdrawals of $2,000 per business day. Therefor if you were to invest, say, $100k into this account, it would take you roughly 10 weeks to receive your money. I can see why this particular customer is so frustrated as he had a rather large sum wrapped up in this account. Here is the email they sent him when he requested to withdrawal his funds:

Dear Valued Customer, The world of Internet banking continues to evolve at an unprecedented pace, to which banks must continuously look at industry best practices to protect both customer and bank assets. This notice is being sent to inform you of two changes to The Provident Bank’s Internet Banking service, which will become effective on September 29, 2009. Transaction Limitations: The Provident Bank has implemented a daily limit of $2,000 on external transfers from each of your Provident accounts, as conducted via Provident Connect. This daily limit is applicable to external transfers (transfers from your Provident account to an account at another financial institution) conducted Monday through Friday. Any transfers requested on Saturday or Sunday will be added to transfer requests made on the following Monday. Note: This transaction limitation does not affect transfers to or between your Provident accounts. In order to close accounts with balances exceeding $2,000, you must send a secure message through Provident Connect providing the Bank authorization to close your account. Within one business day after we receive your authorization, a check for the balance of your account will be mailed to the address we have on file. Funds Availability: Electronic funds transfers processed via online banking to your Provident accounts from another financial institution will be available for withdrawal or transfer outside of The Provident Bank on the third business day following the day of deposit. Please understand that the above limitations are being implemented to protect your accounts from unauthorized activity. As Internet services continue to evolve, The Provident Bank is continuing to work with industry experts to ensure our practices meet both the high standards of performance expected by our customers, as well as the security needed to give you peace of mind. Sincerely, The Provident Bank

After digging a little further, we were not able to find this stipulation within their “terms of service” but realize this became effective only a few days ago (according to the email). Has anyone else come across this issue?

Lending Club’s average returns rise to 9.60% APY

Since BankVibe first dubbed Lending Club as a lucrative alternative to bank CDs, we have seen their average returns raise from roughly 7.0% APY to a whopping 9.60% APY!

Lending Club is the industry leader for peer to peer lending. They can provide better returns to investors by connecting qualified borrowers with people looking to invest money.

For those of you whom are unfamiliar with Lending Club, here are some crucial facts to consider…

• Since June 2007, Lending Club investors have earned an average net annualized return of over 9.0%.
• The money you invest funds loans made to creditworthy borrowers.
• Many borrowers apply, but less than one in ten are accepted. Lending Club approves only credit worthy borrowers as members.
• They make it easy to build a portfolio based on your criteria. Most lending members spread their investment across tens or hundreds of qualified borrowers.
• Their rates are based on historical trends and the current economic climate. Borrowers pay a fixed rate for the 3-year life of the loan.
• You can reinvest any interest and principal payments each month or withdraw them like an annuity. You can also put your notes up for sale on the “Note Trading Platform”
• Many of their lender members find it rewarding to help others meet their financial goals. Especially in this economic environment, Lending Club members claim to come through when big banks do not.

Discover Bank’s online savings account rate

Discover Bank’s online savings account rate remains strong while the others fall. Below is their rate along with the current national average. To learn more about the product follow the link below.

Discover Bank High Yield Savings Accounts

National Average 1.05% APY

Throughout the last several weeks we have monitored the online savings rates offered by the industry leaders and have seen a consistent downward trend by the majority of the institutions. Ally Bank, ETrade, ING Direct and others have all decreased their rates substantially since the beginning of 2009.

Although the savings environment is rough for consumers right now, Discover Bank is striving to keep a competitive rate on their online savings account. Currently, their rate almost doubles the national average.

Keep in mind, they are still new to the online savings account game (just launched last month). And this account holds a variable interest rate which is subject to change without notice.

This account offer now compliments Discvoer Bank’s other high yielding products such as their cetificates of deposit and money market accounts.

Learn more about: Discover Bank

Health savings account rates through Choice Financial

Thanks to BankVibe reader John for tipping us off on a pretty lucrative savings account being offered by Choice Financial. Currently they have a “Health Savings Account” which provides competitive rates set-up in tiers based on the amount you deposit.

Currently you can earn an APY of 2.53% with a deposit amount of $15,000. You can earn 2.28% APY with a deposit range of $5,000 – $14,999. You can earn an APY of 1.78% with a deposit amount of $2,500 – $4,999 and an APY of 1.04% with a deposit amount of $0 – $2,499.

After reading through their fine print it seems that these rates came into effect back in December of 2008 and are subject to change at anytime without notice. Unlike other savings accounts we’ve covered, Choice Finacial does a credit report check before accepting funds and they state that your eligibility is subject to credit approval.

Benefits of the Health Savings Account through Choice Financial:

• tax-deductible contributions
• tax-deferred growth
• tax-free withdrawals
• competitive product features, benefits and rates