It may not be much to get excited about quite yet, but it’s still encouraging to see online banks beginning to compete with one another on the interest rate front.
In just January of this year the highest yielding money market or online savings account one could lock-in was EverBank’s offer that sat at a paltry 0.81% APY. Since then, Barclays Bank has come on the scene with an online savings/MMA offer featuring an APY of 0.91%. This then prompted CiT Bank to raise their offer to just above 1.0% (1.05% APY).
The newest development in this series of one-upmanship, however, comes from Everbank just this week. They raised their rate to 1.01% APY from the previous 0.81% level it sat at before. If you’re not familiar with EverBank’s savings products, they generally feature an “intro rate” promotion for the first 6 month of holding the account. During this period consumers earn a significantly higher yield which, averaged out over the course of the year, still provides a solid overall return. EverBank’s 6 month intro rate now sits at 1.26% APY, making your first year’s return 1.01% APY.
Top 5 Money Market Rates (June 2012):
View our money market tables to compare all offers side by side.
1) CiT Bank is featuring a money market rate of 1.05% APY requiring a rather hefty minimum deposit of at least $25,000.
2) EverBank (holding the number 2 spot as of June 4, 2012) is featuring a money market rate of 1.01% APY requiring a minimum deposit of $1,500.
3) Barclays Bank is featuring a money market rate of 1.00% APY requiring no minimum deposit. Barclays Bank began issuing this online offer in just February of this year.
4) American Express’s online savings account features an APY of 0.85% APY requiring no minimum deposit.
5) Ally Bank’s online savings account features an APY of 0.84% APY also requiring no minimum deposit.
It’s hard to say exactly what prompted this competition between these online institutions. The FED has made is quite clear that rates as a whole likely wont rise anytime soon (at least not within the next year), so our best guess would be the emergence of Barclays Bank. Since they opened their online shop, their rates have sat at the top of our interest rate tables in our database. This likely led to a bit of competition amongst the 3-5 front runners looking to obtain the top spot on the charts.