Rates on Branch-Based Bank Accounts Slip Further Behind Their Online Counterparts in 4Q

New research shows that traditional branch-based bank accounts lost more ground in the rate battle against online-based accounts in the fourth quarter of 2014.


FOSTER CITY, Calif., Jan. 27, 2015 (GLOBE NEWSWIRE) -- Despite another quarter of historically low savings account and money market account rates, some banks resisted the low-rate trend by raising their deposit rates in the fourth quarter of 2014, according to the latest MoneyRates.com America's Best Rates survey.

While several individual banks in the survey raised their rates, including some of the top-placing institutions, the broader story of the survey is that online-based accounts continued to significantly outpace their branch-based counterparts. As a category, online-based savings accounts actually rose slightly during the fourth quarter, to an average annual percentage yield (APY) of 0.559 percent, and online-based money market accounts held steady at 0.552 percent. By contrast, branch-serviced accounts fell in both the savings category (to 0.085 percent) and the money market category (to 0.113 percent).

The average online-based money market account now offers more than five times as much interest as the average branch-based money market account. For savings accounts, the difference is six times.

Richard Barrington, CFA, senior financial analyst for MoneyRates.com, says that differences of this magnitude make rate shopping worthwhile in spite of today's low-interest-rate environment.
"It's easy to look at low rates and assume that bank accounts just don't pay much interest anymore," says Barrington. "But it is precisely because rates are so low generally that the exceptions stand out all the more. You would not have had the chance to earn five times the average when rates were at 5 percent. However, you do have that opportunity now, if you shop around."

Barrington adds that the rise in rates among some of the top-paying savings accounts – the top two banks in that category, Synchrony Bank and GE Capital Bank, both raised their rates during the fourth quarter – underlines that not all bank rates move in the same direction at the same time.

"What (the rise in the top-paying rates) means is that the gap between what the average bank customer is earning and what well-informed bank shoppers are getting is widening," says Barrington.

Here are the 11 savings accounts that posted the highest average interest rates in the fourth-quarter survey and their average APYs.

1. (tie) Synchrony Bank – 0.973 percent
1. (tie) GE Capital Bank – 0.973 percent
3. CIT Bank – 0.939 percent
4. Ally Bank – 0.916 percent
5. Barclays Bank – 0.915 percent
6. Discover Bank – 0.870 percent
7. American Express Bank – 0.810 percent
8. Sallie Mae Bank – 0.800 percent
9. Doral Bank – 0.793 percent
10. (tie) Capital One 360
10. FNBO Direct – 0.750 percent

Here are the 10 money market accounts that posted the highest average interest rates in the fourth-quarter survey and their average APYs.

1. (tie) Sallie Mae Bank – 0.900 percent
1. (tie) Santander Bank – 0.900 percent
3. (tie) Ally Bank – 0.850 percent
3. (tie) Mutual of Omaha Bank – 0.850 percent
3. (tie) Synchrony Bank – 0.850 percent
6. Doral Bank – 0.779 percent
7. Discover Bank – 0.720 percent
8. Nationwide Bank – 0.680 percent
9. EverBank – 0.610 percent
10. OneWest Bank – 0.500 percent

For more details on this survey, please see http://www.money-rates.com/research-center/americas-best-rates/.

Methodology

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 50 smaller banks. This sampling was constructed to be broadly representative of the national banking environment.

About MoneyRates.com

MoneyRates.com 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. 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.



            

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