After conducting this week’s survey of money market rates throughout the nation we’ve found that online banking institutions are offering overwhelmingly better interest rates than local banks and credit unions. Since the online banking concept came on the scene in 1994 their interest rates have been at or around the top of the charts for both liquid savings accounts such as money market accounts (or online savings accounts) as well as bank CDs (certificates of deposit). Most claim that the capability to offer such extraordinary rates is due to their efficiency in cost savings – ie no brick and mortar branches to build and staff. In the past though, we’ve found that locally based community credit unions can often compete with these institutions for best savings rates because they are not-for-profit, member-owned institutions that generally pass along their profits in the form of better products and rates to their customers (or “owners”). Recently though, we’ve found that while local institutions are continuing to drop their rates on liquid savings accounts such as money market accounts, the online institutions’ rates are staying relatively stable.
Top Money Market Rates from Online Banks:
(Rates accurate as o November 6, 2010.)
UPDATE July 2011: Sallie Mae now offers an online money market account. Visit updated offer in our latest post covering the best money market accounts online.
Attention! – The Information Below is Outdated and No Longer Accurate -
SallieMae’s Online Savings Account: 1.10% APY with no fees or minimum balance requirements. Sallie Mae dropped it’s rate last week to 1.10% APY from 1.25% APY.
- Ally Bank’s Online Savings Account: 1.19% APY with no fees or minimum balance requirements.
- Discover Bank’s Online Savings Account: 1.15% APY with a $10,000 minimum balance required.
- GiantBank’s Online Savings Account: 1.01% APY with a $1,000 minimum balance required.
You can review more offers here: Top Online Savings Accounts in 2010.