High interest savings accounts continue to perform well relative to other safe and secure liquid investment alternatives. While bank CD rates and Treasury rates have continued to tumble through mid May, high yielding savings accounts have held up quite well. Consumers searching for the best savings account rates have a wide variety of savings accounts to choose from however, online high yielding savings accounts are outperforming those found at brick and mortar banks and traditional savings accounts by a wide margin.
Savings accounts have generally earned lower interest rates than CD rates because of the greater degree of liquidity these accounts offer. Bank CD accounts are subject to early withdrawal penalty and savings accounts are restricted only by the number of withdrawals that may be completed without penalty. Banks that offer online high yielding savings accounts yield more than traditional accounts due to the lower costs for the banks and the aggressive promotion with these savings products.
While the interest rates offered on savings accounts are often lower than rates on bank CDs, the top three high yielding savings accounts available nationally are paying interest rates that far exceed most bank CD rates.
The national average CD rate posted by the FDIC on a three year CD for the first week of May is 0.66 percent and the average rate for a four year term certificate is 0.84 percent. This compares to the average interest rate available now on the top three high yielding savings accounts of 1.08 percent or 24 basis points above the average four year CD rate.
The top three high yielding savings accounts currently are the TIAA Direct savings account with a yield of 1.25 percent, Barclays Bank savings account at 1.00 percent and SalemFive Direct savings account which also has an interest rate of 1.00 percent.
All three of these savings accounts are online only savings account. All three banks are FDIC incurred banks in the U.S. TIAA Direct is a product of TIAA-CREF Trust Company. TIAA-CREF Trust Company is part of TIAA-CREF, a Fortune 100 financial services organization. TIAA-CREF Trust Company has just one location in Saint Louis, Missouri. Barclays Bank Delaware also has just one location in Delaware. The SalemFive Direct account comes from the online banking division of Salem Five Cents Savings Bank which is based in Massachusetts and has 23 branches in the state.
The TIAA Direct high yield savings account requires a 25 dollar minimum deposit, comes with a free ATM and has no monthly fees. TIAA Direct can be reached at 855 842-2372.
Barclays Bank savings account has no minimum balance required to open the account and has no monthly fees. Barclays Bank can be reached at 888-710-8756.
The SalemFive Direct savings account is promoted by the bank as the eOne Savings™ account. The high yield savings account of Salem Five has a minimum balance of 100 dollars to open the account, no monthly fees and comes with a free ATM card.
In a low bank rate environment, consumers have been searching their local bank market for high interest savings accounts to hold their savings and investment funds. While many local banks and big regional banks fail to offer high interest rate savings accounts, many online banks are able to offer a higher interest rate than a traditional banks or credit union.
A short list of the best high interest savings accounts shows that the online banks are indeed offering the best interest rates on savings accounts.
The list below includes the most popular online savings accounts. The listed high interest savings accounts allow account holders to earn some of the highest available interest rates available all with low minimum balance requirements and fees. And as online savings accounts, the account holder can manage their money through online account management and transfers to and from the high interest savings accounts with existing bank accounts.
The top savings rates are offered by two banks, American Express Bank and Sallie Mae Bank.
American Express Bank refers to their high interest rate savings account as the American Express Bank high yield savings account.
The interest rate on this savings account is currently 1.30 percent.
There are no fees or minimum balance requirements with the savings account.
The Sallie Mae Bank high interest savings account is called the Sallie Mae High Yield Savings Account.
The current yield on the Sallie Mae Bank online savings account is also 1.30 percent.
The account has no minimum balance requirement or monthly fees.
The account is FDIC Insured as are all accounts listed here.
Capital One Bank offers an high interest savings account called the InterestPlus Online Savings account.
The interest rate on this account is at 1.25 percent. The account also has a bonus rate that adds
an extra 10% quarterly bonus on the savings account interest earned if the account holder has an average monthly balance of at least $10,000.00 or use of a Capital One credit card at least once a month.
Without the bonus program, the minimum deposit is only $1.00 to open the savings account.
Discover Bank online savings account.
The Discover Bank online savings account earns an interest rate of 1.25 percent.
There is no minimum balance to hold the account but there is a $500.00 minimum opening balance requirement.
Ally Bank online savings account.
The Ally Bank online savings account has rate of 1.09 percent.
The online bank account has no minimum balance requirement and no monthly fees.
The appeal of these high interest savings accounts is apparent in the high yields and low costs to obtain and maintain the accounts. Note that the interest rates on online savings accounts do fluctuate. To find the best high interest rate savings account is best to compare rates frequently and stick with the banks that consistently offer the highest rates.
For more information on online savings account rates refer to additional reviews at Best Online Savings Accounts, Best Online Bank or at Direct Savings Accounts. A list of the top ten best savings account rates can be found at Savings Account Rates.