The latest Federal Reserve meeting may have triggered widespread rate drops on some of the most popular high-yield online savings account. Discover Bank was just the latest to cut its money market, online savings, and CD rates.
Interest rates on deposit accounts are starting to head downhill as the decision from the most recent Federal Reserve meeting kept interest rates unchanged at record lows.
Last month, the online savings account from HSBC Advance fell from 1.00% APY to 0.90% APY. Also, Sallie Mae Bank just cut its High Yield Savings rate from 1.30% APY to 1.25% APY, dropping it from one of the top savings yields among the banks tracked on MyBankTracker.com. Currently, the bank with the leading savings rate that hasn’t reduced its yield is American Express Bank, which is offering a 1.30% APY.
We are yet to see if American Express Bank and other banks such as Ally and ING Direct will follow accordingly. From past trends, a rate cut by a well known bank was often followed by other institutions to do the same so that there wasn’t a great disparity between rates while still remaining competitive.
Discover Bank Rate Cuts
At one point, Discover Bank was a leader in savings rates. In addition to cutting the savings rate, Discover Bank also decreased the rates on all of its CD products and money market account. With the rate changes, it falls below offers from American Express Bank, Sallie Mae Bank, and Capital One Bank.
As of February 2, 2011, the new Discover Bank money market, savings, CD and IRA CD rates are:
|Product||Old APY||New APY||APY change|
|3 Month CD and IRA CD||0.60%||0.55%||- 0.05%|
|6 Month CD and IRA CD||1.00%||0.90%||- 0.10%|
|9 Month CD and IRA CD||1.05%||1.00%||- 0.05%|
|12 Month CD and IRA CD||1.30%||1.25%||- 0.05%|
|18 Month CD and IRA CD||1.35%||1.30%||- 0.05%|
|24 Month CD IRA CD||1.50%||1.45%||- 0.05%|
|30 Month CD and IRA CD||1.60%||1.55%||- 0.05%|
|36 Month CD and IRA CD||1.80%||1.75%||- 0.05%|
|48 Month CD||2.05%||2.00%||- 0.05%|
|60 Month CD and IRA CD||2.40%||2.30%||- 0.10%|
|84 Month CD||2.70%||2.60%||- 0.10%|
|Money Market Account||1.20%||1.15%||- 0.05%|
|Online Savings Account||1.25%||1.20%||- 0.05%|
If you are interested in opening one of these deposit accounts, visit the Discover Bank rates page. To find and compare more bank rates available, visit the bank rates page.