We are 3 days into March now and have yet another downward trend of online savings account rates. In most cases one or two online savings institutions will drop their rates and within days (or even hours) the rest seem to follow suit. If you can recall, during most of 2006-2008 (until the bank collapse) these same savings accounts were trending upward, following each others pace.
Current Online Savings Rates
E-TRADE Bank 1.95% APY – Down from 3.01% two months ago.
ING Direct 1.65% APY – Down from the mid 2.0′s as of two months ago.
HSBC Direct 2.25% APY – While HSBC Direct has lowered it’s rate some, it’s changes remain less sporadic and seems to be a favorite amongst banking consumers.
WTDirect 2.01% APY – WTDirect typically keeps their online savings rates within the top 5%, however, they require a minimum balance of $10,000 in order to receive their rates.
Possible alternative to online savings accounts
After posting an alternative to Bank CD’s last week, much excitement/commotion was generated over the possibility of earning 6.50% APY + through Peer to Peer lending platforms. Lending Club allows you to lend your money to prime borrowers and earn anywhere from 6.69% to 19.37% APY (depending on the credit score YOU require from a borrower). If you read the article from last week you will see that everyone who commented generally had positive things to say. Keep in mind, if you are after FDIC insured investments, then Peer to Peer lending is probably not for you.