Survey -- Savings Account Rates Five Times Higher Online

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A new survey finds that online savings account rates are more than five times greater than the savings account rates offered offline. On average, moving from a traditional savings account to an online-only savings account greatly boosts yield on both small and large account balances. Depositing a higher balance in a traditional offline account actually dropped interest, on average.

Banking traditionally has been a game where the advantage goes to the rich. This study indicates that it is becoming a game where the advantage goes to the technologically advanced instead.

Banking online earns savings account customers significantly higher interest rates, according to a new survey by The survey – the first in a new quarterly review of online bank offerings – found that online savings account rates are typically more than five times higher than the savings account rates for traditional offline accounts.

Not only does utilizing an online account multiply the interest rate customers can get, but it may be the easiest way for many to immediately grow their savings account rates. In the past, consolidating balances to become a bigger customer at a single bank may have been a successful strategy to earn higher rates, but not today. found that depositing a higher balance at a traditional offline bank account would actually result in a penalty of 0.01 percent annual percentage yield (APY), on average.

In contrast, the reward for simply moving the same account balance from an offline savings account to an online savings account would generally bump up yields by 0.60 to 0.72 percent APY.

"Banking traditionally has been a game where the advantage goes to the rich. This study indicates that it is becoming a game where the advantage goes to the technologically advanced instead," said Richard Barrington, personal finance expert for

Key findings from the comparison of online savings accounts and traditional offline savings accounts:

  • For a $10,000 savings account balance, online banks offered an average rate of 0.87 percent APY, compared to just 0.15 percent APY for traditional offline savings accounts
  • Online savings accounts averaged 0.76 and 0.86 percent APY at the $1 and $1,000 account balance levels, respectively – barely lower than the average rate offered for a $10,000 account balance

"The picture that is emerging is one where there are two different banking worlds," suggested Barrington. "One is the traditional bricks-and-mortar world, high on image but low on performance. The second world is the online banking world, where things like image and even account sizes are somewhat cancelled out, and what matters is who offers the highest rate."

The banks offering the best online savings account rates for a $10,000 account balance, according to a survey by, are:
1. SFGI Direct: 1.21 percent APY
2. Discover Bank: 1.15 percent APY
3. (tie) Capital One Bank: 1.10 percent APY
3. (tie) Chesapeake Bank: 1.10 percent APY
3. (tie) Colorado Federal Savings Bank: 1.10 percent APY
3. (tie) Sallie Mae Bank: 1.10 percent APY
3. (tie) SmartyPig: 1.10 percent APY
8. (tie) First Trade Union Bank: 1.05 percent APY
8. (tie) OneWest Bank: 1.05 percent APY
10. Ally Bank: 1.04 percent APY

For more details, read the article, 10 online accounts that pay best.

The study looked at offline savings accounts offered by 81 banks. These represented offerings from some of the largest banks in the U.S. as well from average-sized institutions. also looked at online savings accounts offered by 36 banks with products available across state lines.

With this sample of offline and online savings accounts during the second week of June 2011, interest rates applicable for account balances of $1, $1,000 and $10,000 were identified. Rates for each of these account size categories were then averaged for both types of savings account. will soon launch quarterly reports of top online savings account rates as part of its popular America’s Best Rates feature.

About has been a leading source of information on bank rates, personal finance, savings accounts and investing since 1999. The site provides the highest rates on certificates of deposit, money market accounts and high-yield savings accounts. is owned and operated by QuinStreet, Inc. (NASDAQ: QNST), one of the largest Internet marketing and media companies in the world. QuinStreet is committed to providing consumers and businesses with the information they need to research, find and select the products, services and brands that best meet their needs. The company is a leader in ethical marketing practices. For more information, please visit

Jessica Cultra


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