GoBankingRates.com Study: Online Savings Account Rates Significantly Outperform Brick-and-Mortar Banks

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The latest interest rate study released by Go Banking Rates finds that the average savings account rate offered by online banks is significantly higher than average rates from physical banks in every U.S. state.

Anyone who has avoided online savings accounts in the past should reconsider as they currently outperform even the most competitive savings rates from brick-and-mortar banks and credit unions.

Go Banking Rates’ most recent study of average savings account interest rates in each state found there has been quite a bit of movement since the previous savings rate study. Alabama fell seven spots from number one, with a state average savings account rate of .29% APY (down from .40% APY). Vermont’s average improved quite a bit, as the state now takes the top spot with .50% APY.

At the other end of the spectrum, Arizona’s average savings account interest rate of .13% APY remained steady, but the state no longer holds the lowest position. Nebraska’s average savings account rate fell to just .09% APY.

However, data that may bring hope to depositors living in states with the lowest average savings account interest rate is that average online bank rates are significantly outperforming both physical banks and credit unions across the U.S. In fact, online banks beat the highest state average by more than a quarter percent with an average rate of .78% APY.

See Average Savings Account Interest Rate by State

Why Online Banks Provide Better Rates

Online banks are unique because they do not have physical branches to operate. Therefore, there are fewer overhead and administrative costs. Online banks may pass these savings on to depositors in the form of higher deposit account rates.

Best Online Savings Rates

A few of the online banks in the Go Banking Rates database providing the highest savings account rates include:

  • Ally Bank: .95% APY
  • CIT Bank: .90% APY
  • Discover Bank: .80% APY

How State Averages Are Calculated

Go Banking Rates is currently the only online rates aggregator with the ability to provide the most comprehensive and authentic savings rate information. Competing rates tables are unable to provide truly local interest rates, displaying local branches belonging to national institutions only. Go Banking Rates employs a team that manually collects interest rate information from individual community banks and local credit unions in every U.S. state, in addition to national and online banks.

State savings account interest rate averages are calculated based on the information in our rates database, which populates our Rates Table. Currently, there are more than 4,000 financial institutions in our Rates Table. Rates are based on a $10,000 deposit and are as of September 28, 2012. Please note that rates my change at any time in the future.

About Go Banking Rates

GoBankingRates.com a national website dedicated to connecting readers with the best interest rates on financial services nationwide, as well as informative personal finance content, news and tools.

GoBankingRates.com is a division of ConsumerTrack, Inc., an 8-year leader in online lead generation, performance-based marketing, and customer acquisition in the financial, insurance and credit sectors. The company’s portfolio of 1500 finance websites includes GoBankingRates.com, GoInsuranceRates.com, and GoFreeCredit.com. These sites receive more than 2 million visits each month.

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Jaime Catmull
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