America’S Best Rates 2011 Q3 – How to Buck The Low-Rate Trend

Nationally, savings and money market rates continue to fall, but there are exceptions. Find out which banks are bucking the low-rate trend.
Financial Expert
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See the current America’s Best Rates feature

If you’re frustrated with lackluster interest rates on your bank accounts–and lately, who hasn’t been?–you don’t have to accept them. America’s Best Rates highlights the banks that are still committed to providing savings account rates and money market account rates that are many times the national average.

Even as savings account interest rates and money market rates continue to fall toward zero across the country, some banks continue to offer 1 percent annual percentage yield (APY) or higher. In fact, despite the falling trend in national average bank rates, the average rate among the money market accounts identified as America’s Best Rates actually rose in the third quarter of 2011. The average rate of the top 10 savings accounts held steady, but at least they didn’t follow the decline of the national average.

Why finding the best rates matters now

Finding higher rates has never been more important. Bank rates are not only low but, in many cases, swamped by inflation. In this environment, the more willing you are to accept average rates, the further behind inflation you’ll fall.

The tricky part is that some banks offer high rates simply as a temporary marketing gimmick, while others are committed to a strategy of keeping their rates among the most competitive in the country. If you look at a snapshot of savings account rates on any given day, it would be impossible to tell the difference. That’s why MoneyRates created America’s Best Rates, a feature that looks at banks’ average rates over a full quarter. That way, the flash-in-the-pan rates fall by the wayside while the consistently strong rates rise to the top.

The following are the savings accounts and money market accounts that offered America’s Best Rates in the third quarter of 2011.

America’s Best Rates: Savings account rates

These banks had the top 10 average savings account rates in the third quarter by APY:

1. Discover Bank 1.12%
2. Sallie Mae Bank 1.08%
4. Ally Bank 1.02%
5. (tie) American Express National Bank 1.00%
5. (tie) ING Direct 1.00%
7. Cashmere Valley Bank 0.95%
8. Zions Bank 0.93%
9. EverBank 0.90%
10. OneWest Bank 0.76%

This marked Discover Bank’s second consecutive quarter at the top of the list of savings account rates. In all, seven of the banks in last quarter’s top 10 made it again this quarter.

That consistency underscores the premise behind America’s Best Rates. If you don’t want to chase a moving target, choose a bank that offers consistently competitive rates. By focusing on averages over time rather than on a single snapshot of rates, the list of America’s Best Rates can help you find that consistency.

America’s Best Rates: Money market accounts

Here are the banks that had the top 10 average money market rates in the third quarter by APY:

1. Sallie Mae Bank 1.14%
2. Nationwide Bank 1.03%
3. Discover Bank 1.02%
4. Ally Bank 1.02%
5. Hudson City Bank 0.96%
6. AIG Bank 0.93%
7. Zions Bank 0.93%
8. (tie) EverBank 0.90%
8. (tie) Mile High Banks 0.90%
10. OneWest Bank 0.87%

Note that even though Discover Bank and Ally Bank appear to be tied, their rates were actually separated by a few thousandths of one percent, placing Discover slightly ahead of Ally.

While the leading bank, Sallie Mae, was a newcomer to the list this quarter, overall, seven banks repeated from the second quarter of 2011. As with the top savings accounts, that high degree of repetition demonstrates the consistency you should consider when choosing a bank.

Bucking the low-rate trend with America’s Best Rates

If you need more motivation to move your money to accounts consistently offering higher rates, take a look at the national averages. According to the Federal Deposit Insurance Corporation (FDIC), national average bank rates continued to fall in the third quarter of 2011. The average savings account rate dropped by 2 basis points to an average of 0.14 percent. The average money market rate dropped by 3 basis points in the same quarter to 0.17 percent.

Despite this, the average rate among the savings accounts making the list of America’s Best Rates held steady at 0.98 percent. The average rate among the top money market accounts did even better, rising by 2 basis points to 0.97 percent.

These compilations of America’s Best Rates are based on the MoneyRates Index, a composite of 100 banks that includes the 50 largest U.S. banks plus a sampling of mid-sized banks.

The banks that are bucking the trend toward lower interest rates may be in the minority, but there are enough of them to represent a viable choice for consumers. That’s why the banks offering America’s Best Rates should be at the top of your list when choosing your next bank.

Richard Barrington, a Senior Financial Analyst at MoneyRates, brings over three decades of financial services expertise to the table. His insightful analyses and commentary have made him a sought-after voice in media, with appearances on Fox Business News, NPR, and quotes in major publications like The Wall Street Journal and The New York Times. His proficiency is further solidified by the prestigious Chartered Financial Analyst (CFA) designation, highlighting Richard’s depth of knowledge and commitment to financial excellence.
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