By  Thu Jan 16, 2014

Savings Rates Report Jan. 2014: Major Online Banks Raise Rates

Square Gato / Flickr |

Square Gato / Flickr source

In the past month, the national savings rate average remains stuck at 0.28% APY, the same rate it has been in the prior four months. However, two of the largest U.S. online banks have hiked that rates on their savings accounts — a positive reaction to the announcements from the latest Federal Reserve meeting.

Ally Bank increased its online savings rate from 0.85% APY to 0.87% APY, while Discover Bank boosted its online savings rate from 0.80% APY to 0.85% APY. These rate jumps were not enough to cause a change in the national average.

The small uptick in savings rates at these banks follow the Federal Reserve’s board meeting in December to taper purchases of government securities. More importantly, the central bank diminished its stance on the 6.5 unemployment-rate threshold for raising the federal funds rate. Federal Reserve Chairman Ben Bernanke said that the Fed is also looking for a steady 2 percent inflation rate.

The December unemployment rate was 6.7 percent, down from 7.0 percent in November. Even when the jobless rate falls to 6.5 percent, it doesn’t mean that interest rates will start to rise.

Nevertheless, the Fed’s change to its bond-buying program helps to relieve the downward pressure on rates.

Currently, the highest savings rate available nationwide is 1.01% APY from SFGI Direct, the online banking division of Summit Community Bank.

The table below provides a sample set of savings rates, and any changes to those rates, at benchmark financial institutions from Dec. 15, 2013 to Jan. 15, 2014. By monitoring the savings rates at some of the largest U.S. banks, we get an idea of the direction of rates at other banks and financial institutions.

Bank Savings account APY (as of 12/15/13) APY (as of 1/15/14) APY Change
Chase Savings 0.01% 0.01% 0%
Bank of America Regular Savings 0.01% 0.01% 0%
Ally Bank High Yield Savings 0.85% 0.87% +0.02%
Capital One 360 360 Savings 0.75% 0.75% 0%
American Express Personal Savings 0.85% 0.85% 0%

To compare the best savings rate offered today, refer to the table below:

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