America’s Best Rates 4Q 2014 – Traditional Banks Lose More Ground
Tired of bank rates falling? Then look more closely — there are exceptions to that trend, according to the fourth-quarter 2014 MoneyRates America’s Best Rates survey.
While the overall averages for savings account rates and money market rates declined in the survey, online accounts bucked the trend, with the average rate for online savings accounts rising in the last three months of 2014 and the average rate for online money market accounts holding steady. This widened the significant advantage online account rates already held over interest rates on traditional branch-based savings and money market accounts.
There were also particularly good deals available for sharp-eyed consumers who shopped around because several of the top banks in the savings account category raised their rates, even though the overall category average fell during the quarter.
Below are more details on the study’s top savings and money market accounts.
America’s Best Rates: savings accounts
Here are the leading savings account rates from the latest quarter:
In the prior quarter, the top rate had been 0.950 percent, so the two banks at the top of this list raised their rates to lead the way this quarter, as did a few other banks on this list. Those rising rates contrast with what most banks did, as the overall average rate for savings accounts fell by nearly a basis point to 0.172%. This means the top savings accounts are offering more than five times the interest that the average ones are.
As a group, online savings accounts also raised their rates in the latest survey to an average of 0.559 percent. In contrast, branch-based savings accounts lowered their rates as a whole to an average of 0.085 percent. That widened the advantage of online savings account rates over traditional savings account rates by nearly 5 basis points, to 0.474 percentage points. To put it differently, online savings accounts, on average, are now paying over 6 times more interest than their traditional counterparts.
America’s Best Rates: money market accounts
The following were the top money market accounts in the latest survey:
Unlike the savings account category, the money market category did not see an increase in the top rates available in the fourth quarter of 2014. Still, those top rates still represent a significant advantage over the category average. With the overall average money market rate falling to 0.165%, the top money market rates pay more than five times the interest of the average money market account.
As is the case with savings accounts, online money market accounts generally represent a rate advantage over traditional accounts. While the average online money market rate held steady at 0.552% in the latest survey, the average traditional account rate slipped a little to 0.113%. That widened the rate advantage for online money market accounts to 0.439 percentage points.
Finding better bank rates
To help consumers fight back against the low-interest-rate environment, MoneyRates puts the emphasis in these surveys not just on high rates but on consistently high rates. Short-term promotional rates are not included in the America’s Best Rates survey, and the figures shown are the averages offered throughout the quarter, not just a one-time snapshot of rates. To present a cross-section of banking conditions, MoneyRates surveys 100 banks, including 50 of the largest retail deposit institutions, plus a mix of medium-sized and smaller banks.
2015 has begun with a stock market slump, which echoes broader concerns about economic conditions. This means that the near-term outlook for higher bank rates is not encouraging. With average rates near zero and showing no signs of rising, the one thing consumers can do to earn higher rates is to shop around. The rankings above should give you some ideas on where to begin your search.
More from MoneyRates:
- The best savings account rates: A saver’s guide
- Unconventional CDs: How they work
- Bank fees: Are your charges creeping up?
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