Savings Rates Report Oct. 2013: Online Banks Slash Rates

Simon Zhen

Updated on Tue Jun 3, 2014

(Please check out our latest savings rates report.)

peddhapati / Flickr |

peddhapati / Flickr source

Since the last Savings Rates Report in mid-September, the Federal Reserve surprised the speculative market by not announcing any change to its economic stimulus. With the central bank still hesitant to scale back its bond-buying program, many online banks responded with noticeable rate cuts.The national savings rate average has dropped to 0.28% APY, down from 0.29% APY last month, according to bank data collected by MyBankTracker.

In the past month, TIAA Direct and Sallie Mae Bank were among the biggest names in online banking to slash savings rates. TIAA Direct’s savings account now pays only 0.50% APY — the same account that paid 1.25% APY when it launched in February 2012. Sallie Mae Bank’s savings rate fell from 0.85% APY to 0.80% APY, the same rate also offered by Discover Bank.

However, the most significant rate cut comes from H&R Block Bank. Deposits in its Easy Savings account now earn a measly 0.03% APY, down from 0.80% APY.

CIT Bank actually increased its savings rates from 0.80% APY to 0.85% APY on balances under $25,000 (0.85% APY to 0.90% APY on balances of $25,000 and more).

Capital One (not Capital One 360) has hiked the rate on its Smart Savings account to an attractive 1.00% APY. Unfortunately, it is just a promotional rate that expires one year after account opening, after which the account with pay tiered rates based on the account balance. As of Oct. 15, 2013, the tiered rate ranges from 0.05% APY to 0.30% APY. The Smart Savings account is available only to areas within 10 miles of a Capital One branch.

Currently, the top nationwide savings rate of 0.90% APY is offered by GE Capital Bank and Barclays Bank, both of which require no minimum balance to earn that rate. CIT Bank offers that rate only on balances of at least $25,000.

The table below shows the changes in savings rates at benchmark financial institutions from Sept. 15, 2013 to Oct. 15, 2013. By monitoring the savings rates at some of the largest U.S. banks, we get an idea of where rates at other banks and financial institutions are headed.

BankSavings accountAPY (as of 8/15/13)APY (as of 10/15/13)APY Change
Bank of AmericaRegular Savings0.010.01%0%
Ally BankHigh Yield Savings0.84%0.84%0%
Capital One 360360 Savings0.75%0.75%0%
American ExpressPersonal Savings0.85%0.85%0%

To compare the top savings rates available, refer to the table below:

Related Stories:

5 Ways to Stay Motivated While Saving

CD Rates Report Sept. 2013: Rates Unmoved as Fed Takes Spotlight

Online Checking Accounts: Ally Bank vs. Capital One 360


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