Bank fees are continuing to rise, while the interest rates banks are paying on deposit accounts declined in the third quarter of 2016, according to new data by banking site MoneyRates.
What does this mean? American savers are getting a raw deal.
But before consumers go stashing money within nooks and crannies, Moneyrates data reveals banking options that allow them to earn double, triple, and even quadruple the amount they’re earning.
By analyzing 100 U.S. banks of varying sizes, MoneyRates found savvy consumers can break this trend by following three steps: shop around for rates, switch to online banking and consider smaller banks.
Here’s more detail on banking trends during the third quarter of 2016:
- Declining rates. Moneyrates reveals the average savings account rate to be .231 percent, while the average money market accounts are paying .194 percent.
- Why settle for less? Of the 100 banks surveyed, there were eight offering savings account rates of 1 percent or greater, more than four times the interest of the average savings account.
- Advantages of the online account. Ten of the 11 highest-paying savings accounts were online accounts. Similarly, seven of the 10 highest-paying money market accounts were as well.
- Bank size matters. Smaller banks with less than $5 billion in deposits offer better rates than large and medium-sized banks.
[drizzle]Opportunities for greater earnings are out there, consumers just have to look. To make it easier, Moneyrates.com does the research every quarter to present the best options for bank customers.
The top savings account rates are:
The top money market account rates are:
For the full methodology, rankings, and trends of third quarter banking rates, visit: http://www.money-rates.com/research-center/americas-best-rates/.
America’s Best Rates
Foster City, CA (MarketWired) November 2, 2016 – Moneyrates’ quarterly rate analysis of 100 banks finds the highest-paying savings account to be offered by Salem Five Direct Bank with 1.10 percent interest.
Third quarter banking trends of 2016 show the average savings and money market account rates on the decline with payout rates of .231 and .194 percent.
“It’s easy to just give up and assume interest rates are low everywhere and there’s nothing you to do about it,” says Richard Barrington, Senior Financial Analyst for MoneyRates.com. “But if there are opportunities to double, triple, and even quadruple how much you are earning, why wouldn’t you take them?”
Of the 100 banks surveyed, there were eight offering savings account rates of 1 percent or greater, more than four times the interest of the average savings account.
Consumers can narrow down their search for high-yielding accounts by starting with online accounts versus the traditional branch-based banks. Ten of the 11 highest-paying savings accounts were online accounts and seven of the 10 highest-paying money market accounts were as well.
“The irony is that banks are giving people extra incentive to bank online, while consumers are increasingly finding it the more convenient option anyway,” says Barrington.
Other advantages for bank customers lie within smaller banks with less than $5 billion in deposits which offer better rates than large and medium-sized banks. The same goes for money market accounts. However, there are ultimately more advantages to online than traditional rates even comparing the size differences.
The America’s Best Rates survey is based on the MoneyRates Index of 100 banks, comprised of roughly half large banks (those with $15 billion or more in deposits), 25 medium-sized banks, and 25 small banks (those with less than $5 billion in deposits).
MoneyRates has been a leading source of information on bank rates, personal finance, savings accounts and investing since 1999. The site seeks to provide the highest rates on CDs, money market accounts and high-yield savings accounts. MoneyRates.com is owned and operated by QuinStreet, Inc. (Nasdaq:QNST), one of the largest Internet marketing and media companies in the world.