Online banks are dealing with a different dynamic than traditional banks. They don’t have the cost burden of a large branch structure. They are using this advantage to be more aggressive about offering higher rates to attract customers.
Foster City, Calif. (PRWEB) October 15, 2012
In spite of continued overall declines in deposit interest rates, MoneyRates.com’s America’s Best Rates survey finds that average savings and money market rates at online banks rose in the third quarter of 2012, heightening the already substantial advantage that online bank rates held over traditional bank rates in previous surveys.
The survey tracks interest rates throughout the quarter to identify banks that consistently offer consumers the best returns. While overall rates in the U.S. have been trending downward throughout 2012, the rates at online banks have consistently outpaced their brick-and-mortar counterparts.
“Online banks are dealing with a different dynamic than traditional banks,” says Richard Barrington, CFA, senior financial analyst for MoneyRates.com. “They don’t have the cost burden of a large branch structure. They are using this advantage to be more aggressive about offering higher rates to attract customers.”
The average savings account rate in the survey dropped to 0.179 percent in the third quarter, down from 0.192 percent in the second quarter. The average money market account rate fell to 0.211 percent, down from last quarter’s 0.224 percent. Yet online saving accounts paid an average of 0.582 percent, up from 0.575 percent last quarter. Similarly, online money market rates increased to 0.633 percent from the second-quarter average of 0.620 percent.
The growing gap between online bank rates and traditional bank rates means that comparison shopping between accounts is becoming more important, says Barrington.
“Really, the two best tips for customers are to be sure to shop around, and make sure you include online banks in your search,” says Barrington. “When the top online rates are five times what average rates are, smart shopping really does make a difference.”
The banks paying the highest savings account rates(by APY) for the third quarter of 2012, according to MoneyRates.com’s America’s Best Rates survey, are:
1. Ally Bank – 0.90 percent APY
2. American Express Bank—0.87 percent
3. Met Life Bank—0.85 percent
4. (tie) ING Direct – 0.80 percent
4. (tie) Discover Bank – 0.80 percent
6. Sallie Mae Bank– 0.78 percent
7. EverBank – 0.76 percent
8. Mile High Bank – 0.70 percent
9. Capital One Bank – 0.60 percent
10. Zions Bank – 0.54 percent
The banks offering the highest money market account rates(by APY) for the third quarter of 2012, according to MoneyRates.com’s America’s Best Rates survey, are:
1. Sallie Mae Bank– 0.91 percent APY
2. Ally Bank—0.90 percent
3. Met Life Bank—0.85 percent
4. (tie) EverBank – 0.76 percent
4. (tie) Nationwide Bank– 0.76 percent
6. Discover Bank – 0.70 percent
7. AIG – 0.68 percent
8. Zions Bank – 0.54 percent
9. (tie) Acacia Federal Savings Bank – 0.50 percent
9. (tie) First Mariner Bank—0.50 percent
9. (tie) OneWest Bank – 0.50 percent
For the full analysis, please see America’s Best Rates 2012 Q3: Online rates go against the grain.
America’s Best Rates are calculated from savings account rates and money market account rates recorded in the MoneyRates Index throughout the previous quarter. The MoneyRates Index is a composite of 100 banks, including the 50 largest U.S. banks by deposit amount, plus another 50 mid-sized banks. This sampling was constructed to be broadly representative of the general banking environment.
MoneyRates.com 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 CDs, money market accounts and high-yield savings accounts. The Web Marketing Association awarded a Financial Services Standard of Excellence to MoneyRates.com in the 2011 WebAwards competition. MoneyRates.com 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 find, research and select the products, services and brands that best meet their needs. The company is a leader in visitor-friendly marketing practices. For more information, please visit QuinStreet.com.