Author Topic: Best interest rate on savings account?  (Read 10474 times)

Sparty

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Best interest rate on savings account?
« on: January 14, 2015, 08:25:56 PM »
Hello,

I am going to open a new savings account in the near future. I am currently using Chase and I am earning a dismal .01% interest in my savings account. I am thinking about possibly switching to Ally Bank where the APY is .99%. Does anyone have any recommendations? Any experiences with Ally? Any insight would be greatly appreciated.

Thank you!

midweststache

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Re: Best interest rate on savings account?
« Reply #1 on: January 14, 2015, 08:29:37 PM »
I had an Ally account for awhile - they were pretty great (i.e. I never had to deal with them for customer-service related issues, so fine?), but I ended up switching to CapitalOne360, since they have interest-bearing checking accounts as well. A 360Savings currently yields .75% interest, and the checking has a .2% APY. Also, the BF and I were consolidating finances and he preferred to stay with CapitalOne. Six one way, half dozen another for me.

Are you worried about anything particular, like not having a brick-and-mortar bank?

MDM

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Re: Best interest rate on savings account?
« Reply #2 on: January 14, 2015, 09:38:29 PM »
GE Capital is 1.05%.  Various credit unions offer even higher interest rates for deposits up to a certain amount.

Stache In Training

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Re: Best interest rate on savings account?
« Reply #3 on: January 15, 2015, 12:28:09 AM »
I'm going to second the CapitalOne360 route.  Both savings and checkings gives you interest, though the savings account rate isn't quite as high as say ally or ge. (still much better than any local bank)  But what I like the best is just how simple it is to use, how helpful the customer service is, and how there's literally no fees.

If you decide on it, here's my refer-a-friend link. https://r.capitalone360.com/fvMaBF6sbX We'll both get $20 if you use it.  Or you can use the MMM link on his site too, if you don't want to use mine.

kpd905

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Re: Best interest rate on savings account?
« Reply #4 on: January 15, 2015, 05:26:47 AM »
Capital One 360 is great if you like being treated like the scum of the earth. They do a hard pull of your credit files and may deny you if you don't have several years of history.

If you decline overdraft protection on their checking account, they don't do a hard pull.

Frugal Consumerist

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Re: Best interest rate on savings account?
« Reply #5 on: January 15, 2015, 06:00:12 AM »
I know you asked about savings accounts, but you'll be hard pressed to find anything that produces anything meaningful unless you have a huge wad of cash. Have you considered alternative interest bearing instruments? I have put a decent amount of my savings into Lending Club, and for the past two years, I've earned around 11%. Though the loans are 3 or 5 year loans, they have a secondary market that makes it relatively easy to liquidate your holdings should you need access to the cash. Just an idea if you are willing to move out a little further on the risk spectrum.

I'm a red panda

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Re: Best interest rate on savings account?
« Reply #6 on: January 15, 2015, 08:05:32 AM »
TIAA Creff offers an FDIC insured savings account with reasonable interest (you know, for a savings account)

rmendpara

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Re: Best interest rate on savings account?
« Reply #7 on: January 15, 2015, 08:18:45 AM »
Hello,

I am going to open a new savings account in the near future. I am currently using Chase and I am earning a dismal .01% interest in my savings account. I am thinking about possibly switching to Ally Bank where the APY is .99%. Does anyone have any recommendations? Any experiences with Ally? Any insight would be greatly appreciated.

Thank you!

I've pondered this many times, and GE, Ally, Capital One and a handful of other online banks offer decent rates ~1%.

On a 20k balance, that's $200/yr. I don't know your financial situation, but that's not worth gaming considering what I want a bank to actually do for me:
- convenient interface
- check writing
- bill pay
- clear understanding of account types

Whether I make 200 or 0 really won't make much of a difference in my total financial picture. Anyway, just my opinion. Don't get too caught up in squeezing out a tiny interest amount from a relatively small balance when your investments could easily outearn that by spending a bit of time.

For what it's worth: I have been a Capital One banking customer since 2010, a BofA banking customer since 2007, and Schwab since 2014. I use Capital One for most of my cash needs (bill pay, check deposit, etc), I use BofA to manage banking for a rental property, and Schwab because they have a debit card with no fees anywhere and I had a brokerage account there anyway.Today, the interest really doesn't matter, however, things may change if rates normalize and we see 2-3% on savings accounts again.

If there was a bank where I could get (almost) everything, I'd be very happy.
« Last Edit: January 15, 2015, 08:23:26 AM by rmendpara »

johnny847

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Re: Best interest rate on savings account?
« Reply #8 on: January 15, 2015, 08:24:56 AM »
Hello,

I am going to open a new savings account in the near future. I am currently using Chase and I am earning a dismal .01% interest in my savings account. I am thinking about possibly switching to Ally Bank where the APY is .99%. Does anyone have any recommendations? Any experiences with Ally? Any insight would be greatly appreciated.

Thank you!

I've pondered this many times, and GE, Ally, Capital One and a handful of other online banks offer decent rates ~1%.

On a 20k balance, that's $200/yr. I don't know your financial situation, but that's not worth gaming considering what I want a bank to actually do for me:
- convenient interface
- check writing
- bill pay
- clear understanding of account types

Whether I make 200 or 0 really won't make much of a difference in my total financial picture. Anyway, just my opinion. Don't get too caught up in squeezing out a tiny interest amount from a relatively small balance when your investments could easily outearn that by spending a bit of time.

For what it's worth: I have been a Capital One banking customer since 2010, a BofA banking customer since 2007, and Schwab since 2014. Today, the interest really doesn't matter, however, things may change if rates normalize and we see 2-3% on savings accounts again.
On the flip side of the argument, there are numerous bank accounts that satisfy your criteria for a good bank. Switching banks is a pretty easy process (some people make it seem like it's super difficult or something), so if you can pick up an extra $200/yr for your minor inconvenience, why not? Plus, once you switch, there's zero effort required to keep that money coming in.

benjenn

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Re: Best interest rate on savings account?
« Reply #9 on: January 15, 2015, 08:28:38 AM »
We're fortunate that our credit union offers a 2.5% interest rate on our checking account for balances up to $30,000.  We hold any "savings" that we're not investing in that.

Chrissy

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Re: Best interest rate on savings account?
« Reply #10 on: January 15, 2015, 09:15:19 AM »
UFB Direct:  1.25% on account balances >$25,000.
« Last Edit: January 15, 2015, 09:31:52 AM by Chrissy »

FIPurpose

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Re: Best interest rate on savings account?
« Reply #11 on: January 15, 2015, 10:15:46 AM »
Mango has a savings account that is 6% on <$5k. It looks like they have a monthly fee of $3, but it might be waived for the Savings account? I can't tell from their website. But the fee would mean about 5.2% on 5k.

There's a few downsides about money accessability, but if it's a savings you probably aren't touching it often anyways.

EDIT: switching angle brackets on my mistake.
« Last Edit: January 15, 2015, 01:06:23 PM by flyingcircle »

johnny847

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Re: Best interest rate on savings account?
« Reply #12 on: January 15, 2015, 10:26:38 AM »
Mango has a savings account that is 6% on >$5k. It looks like they have a monthly fee of $3, but it might be waived for the Savings account? I can't tell from their website. But the fee would mean about 5.2% on 5k.

There's a few downsides about money accessability, but if it's a savings you probably aren't touching it often anyways.
I use Mango. The monthly fee is unavoidable. The savings account is tied to the prepaid debit card - you can't get just the savings account.
And it's 6% on UP TO $5000, not greater than $5000.
Accessibility is limited, but you can do ACH withdrawals once you move money from the savings account to the debit card. However, you should proceed with caution, as this is not an intended use of the ACH routing and account number they give you. Do this too frequently and they may shut you down.
And it's not equivalent to a yield of ($5000*.06 - 12*3)/($5000) = 5.28%, because you are given $300 = 6% of interest, taxed on it, and then assessed a $3 monthly fee. Your after tax yield is not the same as a savings account that gave 5.28% interest. It's still better interest than virtually any other savings account, but it's not quite right to say that the yield is 5.28%.

While I do use Mango, I consider it an investment account, not a savings account, because of the weird quirk to get the money out. In an emergency, you can request an account closure and they'll mail you a check for your account balance.

FIPurpose

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Re: Best interest rate on savings account?
« Reply #13 on: January 15, 2015, 01:14:16 PM »
Seeing how Savings Account interest is taxable then the only real difference would be the monthly fee.

30% (tax) $36 ~= $12 === 5%

MustachianAccountant

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Re: Best interest rate on savings account?
« Reply #14 on: January 15, 2015, 01:44:37 PM »
The PayPal Prepaid Debit card has a similar arrangement to Mango - you can set up a savings account attached to the debit card. It yields 5% on the first $5,000, but it's only paid quarterly.
The monthly fee on the debit card account is $4.95.
(I forget the rate on the money over $5k because that's all I keep there. You'd have to read the terms and conditions)

johnny847

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Re: Best interest rate on savings account?
« Reply #15 on: January 15, 2015, 02:14:32 PM »
Seeing how Savings Account interest is taxable then the only real difference would be the monthly fee.

30% (tax) $36 ~= $12 === 5%
Okay, but everybody's tax rate is different. Because the $3 is a constant for everybody, but the tax rate is not, you cannot say that it is a 5% after tax savings account for everybody. For people that pay a lot in taxes, the quirks of the account + the limit of $5000 means that it's probably not worth the hassle for them.

MustachianAccountant

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Re: Best interest rate on savings account?
« Reply #16 on: January 16, 2015, 06:42:11 AM »
For people that pay a lot in taxes, the quirks of the account + the limit of $5000 means that it's probably not worth the hassle for them.

Maybe, but one would question why someone would keep a whole lot more than $5k in cash laying around a savings account anyways? (Regardless of income, tax bracket, or net worth)
Most of my money is in brokerage and retirement accounts. I only keep about $10-12k in cash, so if half of that can be earning 5%, that's a pretty good deal.

NinetyFour

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Re: Best interest rate on savings account?
« Reply #17 on: January 16, 2015, 06:53:53 AM »
Another enthusiastic vote for Capitol One.

johnny847

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Re: Best interest rate on savings account?
« Reply #18 on: January 16, 2015, 07:05:18 AM »
For people that pay a lot in taxes, the quirks of the account + the limit of $5000 means that it's probably not worth the hassle for them.

Maybe, but one would question why someone would keep a whole lot more than $5k in cash laying around a savings account anyways? (Regardless of income, tax bracket, or net worth)
Most of my money is in brokerage and retirement accounts. I only keep about $10-12k in cash, so if half of that can be earning 5%, that's a pretty good deal.
I'm saying that because from my perspective, I wouldn't use Mango as part of an emergency fund. You can ACH money out as of now, but it's not intended for you to do that and they may close that avenue in the future. Another option is to close the account and be cut a check for the balance. But you may not want all the money out of the account. Secondly, the check may get lost in the mail. Thirdly, the check will take time to arrive through the mail. Now I don't know what kind of emergency might require that I have money that quickly, but in my mind, I should have immediate access to my emergency fund. And finally, while you can just transfer the money back to the mango card itself and use that to pay for whatever emergency, what if you cannot pay via a debt card for your emergency? Not that I think I would ever face an emergency like that, but I'd rather not take that chance. The emergency fund needs to be immediately available.
So my perspective is that the Mango account would be an investment account. I guess the argument against using Mango is far better for higher net worth people than higher income people - because of that $5000 limit, for high net worth individuals that's not going to make a dent in their investment portfolio.

pdean

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Re: Best interest rate on savings account?
« Reply #19 on: April 22, 2017, 04:46:13 PM »
So TIAA (where I have a retirement account) is promising APY of .65% ("eight times the national average!") for TIAA Direct. The fine print says "Fees could reduce earnings on the account" but doesn't inform one what those fees might be.

Anyone have experience/advice? This is for our first bit of stashable that we're not ready to go index-fund with.

Link here: https://www.tiaadirect.com/public/banking/land/em/acq1_C4_sav_no_offer?tc_mcid=em_bankacq1_0117_C4π

MDM

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Re: Best interest rate on savings account?
« Reply #20 on: April 22, 2017, 05:21:44 PM »
Anyone have experience/advice? This is for our first bit of stashable that we're not ready to go index-fund with.
See http://www.magnifymoney.com/blog/earning-interest/best-online-savings-accounts275921001 for some current good options.

nawhite

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Re: Best interest rate on savings account?
« Reply #21 on: April 24, 2017, 10:25:23 AM »
I'm a huge Ally Bank fan. Been with them for more than 10 years now and will probably never leave. My savings account is currently at 1.05% and checking account is at 0.1%. I direct deposit into the checking and at the end of every month roll over most of what's left in it to our savings account (automatically).

I've been incredibly impressed with their customer support. Whenever you call, you get a real person immediately (longest wait I've ever had was 2 minutes) and that person is empowered to be able to handle anything you need. No getting bounced around to different departments.

That said, I totally agree with the comments of "this is $200/year, don't worry about the interest rate, bank where it is convenient." For me, we're on the road all time time (see signature) so an online bank with a great website and where I get ATM fees reimbursed is the most valuable service to me. I'd be pissed if I actually had to pay an ATM fee ever again.

pdean

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Re: Best interest rate on savings account?
« Reply #22 on: April 24, 2017, 10:31:52 AM »
Thanks, MDM and nawhite!

letired

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Re: Best interest rate on savings account?
« Reply #23 on: April 24, 2017, 10:52:08 AM »
I use Ally for most of my savings, and have 3k in the Netspend/Brinks/WesternUnion debit+savings accounts. Having more cash around lets me sleep better at night, so I like to do what I can to increase my yield on that money.

haflander

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Re: Best interest rate on savings account?
« Reply #24 on: April 10, 2018, 03:42:24 PM »
I'm about to finally open a high-yield savings account to give my megabank a facepunch and forever end the days of 0% interest. I'm currently building up my emergency/FU fund and my goal is 17,500. I currently have about 6k.

Yes, I've checked out MDM's link above and am leaning toward Ally simply for the name and brand recognition, high liquidity, and 1.45%.

However, before taking the plunge, I wanted to revive this thread to see what others are using for their savings account in 2018.

PJS

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Re: Best interest rate on savings account?
« Reply #25 on: April 10, 2018, 04:29:06 PM »
Iím using Ally for my emergency fund, have been for about 3 years with no issues.

Holyoak

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Re: Best interest rate on savings account?
« Reply #26 on: April 10, 2018, 04:53:53 PM »
I have found the Goldman Sachs/Marcus online savings account to be good...  Pays 1.60%, easy to set-up, easy to move $$$ in and from, simple website, no fees.  No ATM card, or checking, but for me that is not an issue.  Good luck. 

https://www.marcus.com/us/en/savings/high-yield-savings?prd=os&chl=ag&schl=agd&cid=3299463

nalor511

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Re: Best interest rate on savings account?
« Reply #27 on: April 10, 2018, 04:58:10 PM »
CIT Bank has 1.75% on their Money Market, but don't pull money from the CIT end, push it from another account. If you pull it CIT holds it for 7 days.

MrUpwardlyMobile

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Re: Best interest rate on savings account?
« Reply #28 on: April 10, 2018, 06:28:23 PM »
Yep Goldman Sachs is 1.6% and CIT decided to up the ante and pull away from Goldman by raising to 1.75%

DreamFIRE

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Re: Best interest rate on savings account?
« Reply #29 on: April 10, 2018, 07:01:30 PM »
VG Prime MM is now 1.75% SEC yield.  Not FDIC insured.

2Birds1Stone

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Re: Best interest rate on savings account?
« Reply #30 on: April 10, 2018, 07:23:45 PM »
I've been buying 2% 12 month CD's lately and just laddering them.

Acastus

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Re: Best interest rate on savings account?
« Reply #31 on: April 10, 2018, 08:31:35 PM »
+1 on Vanguard Prime MM Fund. Not FDIC insured, but MM funds have never defaulted. Plus the rest of my money is at Vanguard, so it is very convenient.

haflander

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Re: Best interest rate on savings account?
« Reply #32 on: April 11, 2018, 07:42:55 AM »
Thanks HO and others, I'll consider the Marcus account.

2B1S, I would be interested in CDs, but not necessarily for an EF/FU fund. I'll consider them (or more likely I bonds) for medium-range savings like a house down payment.

lil_miss_frugal

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Re: Best interest rate on savings account?
« Reply #33 on: April 11, 2018, 08:18:17 AM »
I use Discover Bank, love them! My current savings account with them earns 1.5% right now.

csprof

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Re: Best interest rate on savings account?
« Reply #34 on: April 11, 2018, 11:12:06 AM »
+1 on Vanguard Prime MM Fund. Not FDIC insured, but MM funds have never defaulted. Plus the rest of my money is at Vanguard, so it is very convenient.

If you're high-income in PA, the VPTXX Pennsylvania money market fund is spectacular right now.

(And high-income in general should look at VMSXX.)  1.4% (or 1.37% if you pay AMT) vs 1.76% means that even at 22% marginal, the PA one is possibly better, and above 22%, the federally tax exempt one is also better. Unclear why there's such a big advantage to the tax-free options right now.  Obviously, these things change over time, sometimes rapidly, so you need to keep an eye on the relative rates.)

   -Dave
« Last Edit: April 11, 2018, 11:21:05 AM by csprof »

okcisok

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Re: Best interest rate on savings account?
« Reply #35 on: April 25, 2018, 09:03:43 PM »
Thanks for the kick in the pants. I have a local credit union account and a CapitalOne360, from when it was ING. I had my savings in the CU account, assuming it was around CapitalOne's rate.  CU = 0.25%, C1 = 1%. Not a huge deal when my savings account was a couple hundred dollars, but now that it's in the thousands it makes a difference. I just transferred it to C1!!

pecunia

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Re: Best interest rate on savings account?
« Reply #36 on: April 25, 2018, 09:19:05 PM »
I've been wondering about my checking too.  How about these money market mutual fund accounts?  Aren't some of those checking accounts?  The interest would vary with the market, but,..........might not be bad at all.

BuffaloStache

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Re: Best interest rate on savings account?
« Reply #37 on: April 25, 2018, 09:50:22 PM »
I've been using FNBO Direct for over 5 years now and don't have a problem. It typically has a 0.1% higher rate than CapitalOne360 accounts. Right now it's yielding 1.60% interest.

Also, there are a lot of stipulations, but Lake Michigan Credit Union (and other credit unions) offer checking accounts with interest rates up to 3.00% for balances up to a certain cap (LMCU's cap is $15,000).


jamaicaspanish

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Re: Best interest rate on savings account?
« Reply #38 on: April 25, 2018, 09:53:33 PM »
I have been using Lake Michigan Credit Union -- Max Checking-- for several years.
Easy requirements for 3% on up to 15k.

haflander

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Re: Best interest rate on savings account?
« Reply #39 on: April 26, 2018, 10:43:18 AM »
Whoa! Ya'll blew my mind, I didn't even consider checking accounts. Idk anything about credit unions, do you have to live in the state or county? I'm assuming the requirements are things like direct deposits? The option of having an account to easily pay bills online and also earn 3% interest on the balance is very intriguing. I'm inspired to facepunch MegaBank again by getting a new checking account!!

pecunia

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Re: Best interest rate on savings account?
« Reply #40 on: April 26, 2018, 10:46:46 AM »
The ones I belong to require you to put $5 in a savings account.  Then they have all kinds of programs.  They offer free life insurance too.  The argument will be that they are not FDIC insured, but they've got another insurance backup nationally for the credit unions.

Credit Unions are owned by their members.

BuffaloStache

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Re: Best interest rate on savings account?
« Reply #41 on: April 26, 2018, 07:43:15 PM »
The ones I belong to require you to put $5 in a savings account. 

This. A lot of them just have this requirement if you live out of state, but still let you open an account.