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The best online savings rate on our list hit another new high in 2018. The current best savings rate is now at 1.79 percent with an APY of 1.80 percent. We might see the highest savings rate hit 2.00 percent this month or next.
Just last month, the best savings rate was 15 basis points lower at 1.55 percent. In early January, the top rate was even lower at 1.50 percent. A 30 basis point increase in just over 2 months is nice to see and the good news is that rates will keep moving higher.
Best Online Savings Rate Poised to Move Higher
Savings rates, money market account rates, and CD rates will all continue to move higher for the rest of 2018. The driving force behind higher rates is that the Federal Open Market Committee will be increasing the federal funds rate.
Note: The federal funds rate is the central interest rate in the U.S. financial market. The federal funds rate influences other interest rates such as the prime rate, the rate banks charge their customers with higher credit ratings. Additionally, the federal funds rate indirectly influences longer-term interest rates such as mortgages, loans, and savings rates.
The FOMC is widely expected to increase the fed funds rate another 25 basis points this month. The CME Group’s FedWatch Tool puts the probability of a rate hike at 88.8 percent. Another 25 basis point increase will put the fed funds rate in a range of 1.50 percent to 1.75 percent.
Banks will increase deposit rates because of the higher fed funds rate. The highest savings rates and money market rates will head towards 2.00 percent. The highest 1 year CD rates will likely go up to 2.25 percent to 2.35 percent, up from the current highest 1 year CD rate of 2.10 percent.
Marcus by Goldman Sachs’ savings rate is competitive and currently at 1.40 percent. The savings rate is only 20 basis points lower than the top savings rate available right now. Marcus doesn’t only offer online savings accounts the bank also offers personal loans.
According to Goldman the investment bank listed to 10,000 people tell them about their experiences with debt. The endless cycle of high interest rate credit card debt, fees and trying to pay that debt off.
Marcus by Goldman Sachs Personal Loans Review
Goldman decided to do things different and offer personal loans with no hidden fees and at fixed rates. Personal loans also have customizable payment options, giving borrowers more flexibility with payments. Interest rates on loans range of 6.99% to 23.99 percent.
These rates are competitive for unsecured personal loans. Though when you get up to the high double digits it might not make sense to borrow to pay off other loans or credit cards. Goldman states only the most creditworthy applicants qualify for the lowest rates. Interest rates are also higher for longer-term loans.
Borrowing from a reputable financial institution like Goldman is always better, plus there are no hidden fees. The fact that there are no hidden fees is crucial because there are many unscrupulous personal loan lenders charging exorbitant fees.
Like with anything else, you have to shop around for the best rates and figure out what loan makes most financial sense for you.
Marcus by Goldman Sachs Savings Rate and Review
Goldman Sachs used to offer online CD account and savings accounts through Goldman Sachs Bank. The bank has now offering deposit products under the new name Marcus by Goldman Sachs. All deposit products are insured with the FDIC under the Goldman Sachs name. The Goldman Sachs FDIC Cert number is 33124.
As I mentioned before, the current Marcus by Goldman Sachs savings rate is 1.39 percent with a APY of 1.40 percent. This isn’t the best savings rate available right now but the rate is in the top 5 rates available. In fact, the savings rate of 1.40 percent is tied for the third best rate. The minimum opening deposit for a savings account is only $1.00.
Goldman Sachs didn’t pull the name Marcus out of the blue. Goldman Sachs’ founder was Marcus Goldman who started the firm in 1869.
The top online savings rates and money market rates were increased again last week because the Fed increased the fed funds rate. These increases bring the best variable deposit rates to 1.30 percent, up from the prior top rate of 1.25 percent. You won’t find these rates from traditional brick and mortar banks, these rates can only be found from Internet banks.
To give you some perspective on how much higher deposit rates are from online banks, we listed the top online rates along with rates from the largest banks. The savings rates offered by the top brick and mortar banks are paltry at best. Even finding rates the brick and mortar banks are offering is difficult – you really have to dig through their websites to find the actual rates they’re offering.
Top Online Savings Rates
Savings Rates at Largest Banks
As you can see, there is no comparison. Don’t bother opening a savings account with any of the big 4 banks. In addition to their extremely low savings rates, there are also many hidden fees and charges. You can quickly get a negative return on your deposit if some of these fees are charged.
You can search for and compare savings rates and money market rates from dozens of banks and credit unions by searching our deposit rate lists for the best savings rates.
The new highest savings account rate on our rate list this month is from Popular Direct savings account rate , currently at 1.25 percent with a yield of 1.26 percent. Popular Direct’s savings rate is two and a half times the national average savings rate as reported by MonitorBankRates.com. Popular Direct is the online banking division of Banco Popular North America (BPNA).
The best savings rates are found with online banks because you will always get a better rate than a brick and mortar bank. Many brick and mortar banks have online banking divisions which offer higher deposit rates than the parent bank. BPNA’s online savings rate is 1.26 percent but their top brick and mortar savings rate is only 0.35 percent.
Getting access to your money with an online account is also very easy these days. You can link both internal and external accounts to transfer money in and out. Mobile banking also gives you the ability to deposit checks just by taking a photo of the front and back of a check to submit for payment.
The minimum account opening account balance for a Popular Direct savings account is $5,000. There are a number of account fees you will be charged if certain criteria aren’t met on a monthly basis.
If you don’t maintain a minimum account balance of $500 you will be charged $4.00 a month. You will be charged an excessive withdrawal fee of $5 if you exceed the legal limit of 6 withdrawals or transfers during any statement cycle.
You have to keep the savings account open for a minimum of 180 days, failure to do so will cost you a fee of $25.00. There is a dormancy fee of $5 if there is no account activity in 12 months. Interest earned on the account is calculated using the daily balance method, which gives the account a higher overall annual percentage yield.
Another Fed meeting has come and gone with no interest rate hike but there is hope for the future for savings rates. Over the past year, we have already seen banks and credit unions increase savings account rates. In fact, this past month we have a new highest savings rate of 1.26 percent on our rate list.
Looking past this month, it’s very likely savings rates and money market account rates will continue to inch higher. Pressure is mounting for the Fed to increase the fed funds rate and it’s looking like that will happen during the Fed’s scheduled December meeting.
When the fed fund rate is increased, it’s likely the best savings rates from online banks will also increase. The current fed funds rate is in a targeted range of 0.25 percent and 0.50 percent. If the range is increased to 0.50 percent to 0.75 percent the top savings account rates could rise to 1.50 percent.
The last time we saw the top variable deposit rates at 1.50 percent was several years ago. You might be able to find a bank offering a promotional rate of 1.50 percent or higher but it’s a limited time promotional rate. You have to go back to right after the financial crisis around 2009/2010 to find deposit rates that high.
Highest Savings Rates
Highest Money Market Rates
Another Federal Open Market Committee (FOMC) meeting has come and gone without a fed funds rate hike. This isn’t good news for savers who have been dealing with low savings rates for almost a decade. The FOMC wrapped up their two day meeting last week and announced they would stand pat on the fed funds rate.
There was a glimmer of good news in the FOMC’s released Economic Projections. The projection for the fed funds rate at 0.60 percent in 2016 will mean one more rate hike this year. Whether or not that actually happens remains to be seen but if there is a rate hike, it would be 0.25 basis points.
A 0.25 percent fed funds rate hike will probably prod some banks and credit unions into increasing deposit rates. I don’t expect the highest savings rate on our rate list to also increase 0.25 percent. We will probably see the top rates increase around 10 basis points.
Right now, the best savings rate on our rate list is at 1.25 percent, so we could see the top rate move towards 1.35 percent. The highest money market account rate right now is at 1.10 percent, so the highest rate would likely increase to around 1.20 percent.
Looking past this year, the FOMC’s projections have the fed funds rate at 1.1 percent at the end of 2017 and at 1.9 percent at the end of 2018. If these projections are correct, deposit rates will move higher in the next two years but don’t expect any miracles.
A fed funds rate just above 1.00 percent would send the highest savings rates towards 2.00 percent. A fed funds rate near 2.00 percent will send the highest savings rates towards 3.00 percent. These projected rates are still low, historically speaking, but better than current rates.
The best online savings account rates are still just above 1.00 percent this week. A few banks made changes to their savings rates but there were no new highs to report. Savings rates are expected to remain near current levels until the Federal Open Market Committee raises the federal funds rate.
Another FOMC meeting came and went without a fed funds rate increase late last month. The next scheduled FOMC meeting is slated for late September. As of today, the CME Group Fed Watch tool puts the probability of a rate increase at a measly 12 percent.
Outside of the September meeting, there is another meeting scheduled for October and one in December. The Fed Watch Tool puts the chance of an increase in October at 13.4 percent and at 34.3 percent in December. The way things have been going in 2016, I’m not holding my breath for another rate increase this year.
Listed below are the top 10 bank and credit union savings rates for August 10, 2016.
Top Ten Bank and Credit Union Savings Rates August 10, 2016
Online savings account rates and money market account rates have been stable the past month as bond yields plummetted. This week, the best variable deposit rates are just above 1.00 percent. The top savings rate is at 1.08 percent and the top money market rate is 1.11 percent.
The Brexit vote to leave the European Union is the catalyst for tumbling bond yields across the globe. 10 year Japanese and German bond yields are actually negative. The 10 year Japanese Treasury is yielding a negative 0.285 percent and the 10 year German Bund is yielding a negative 0.127 percent.
Yields in the U.S. are slightly higher but have declined sharply in the past month. 1o year U.S. bond yields are currently at 1.47 percent. 10 year U.S. Bond yields hit an all-time record low of 1.36 percent just last week.
Deposit rates were supposed to increase in 2016 after almost a decade of low rates but is yet to happen this year. A higher federal funds rate is what is needed to have higher deposit rates. The Federal Open Market Committee increased the fed funds rate by 0.25 percent in December 2015 but hasn’t done any more increases.
The Brexit vote has created uncertainty for the markets and as a result, it’s unlikely the Fed will increase the rate in 2016. The CME Group’s Fed Watch Tool is predicting only about a 30 percent likelihood of another fed funds rate hike by December 2016. Check our rate listings to find the best deposit rates currently available: Best Deposit Rates.
As with all U.K. Banks, Barclays Bank has been thrown a curve with the Brexit vote to leave the European Union. To reassure everyone, Barclays Group’s Chief Executive Officer, Jes Staley, released a statement, “As the UK votes to leave the EU, we will not break our stride. Our commitment to our strategy and to our customers and clients remains unchanged.” You can read the entire statement from Jes Staley.
Barclays Bank Online Savings Account currently has a rate and yield of 1.00 percent. Barclays Bank Online savings rate is 12 times the national average rate as reported by Bankrate’s most recent Passbook & Statement Savings Study. You can view a complete list of online savings rates.
Opening a Barclays Bank online savings account is easy. As with any online bank, it takes less than 10 minutes to open an account. Setting up an external account to transfer funds will take the most amount of time.
For security reasons, test deposits are part of the external account verification process. 2 to 3 business days after you add a link to your Barclays savings account the bank will make two test deposits of less than $1.00 into your external account. The bank uses its own money for these test deposits.
After the test deposits are made into an external account, you log into your Barclays account and report the amounts of those test deposits. After you have confirmed the test deposit amounts, you’ll be able to begin transferring money between your Barclays account and your external account. Barclays Bank’s routing/ABA number is 031101321.
Barclays Bank Online Savings Account Features
You can open an account online at Barclays Bank Online Savings Account. You can also speak to a Customer Care team at 888-710-8756. They are available seven days a week from 8am to 8pm ET.
Synchrony Financial Bank, formerly GE Capital Retail Finance which was spun off by G.E. Capital, is offering one of the best savings rates available. The current savings rate at Synchrony Bank is 1.04 percent with an APY of 1.05 percent. The national average savings account rate is much lower at 0.54 percent.
Synchrony Financial (NYSE:SYF) has been around in one form or another since 1932. Synchrony is currently the largest provider of private credit cards in the United States with over 62 million accounts.
Though issuing 62 million accounts, it is likely you have never seen a Synchrony Financial credit card because unlike American Express, Visa and MasterCard, Synchrony is an issuer of private credit cards. In lieu of Synchrony’s name on these cards, they usually bear the names of national retailers, manufacturers, buying groups, industry associations, and groups.
Synchrony Bank is an internet-based bank without the higher cost structure of traditional brick-and-mortar banks. Because Synchrony and other internet banks have a lower cost structure, they are able to offer higher deposit rates. Besides offering a really good rate, Synchrony’s savings accounts have the following benefits:
Like any other traditional savings account that is subjected to federal regulation, you can only make a maximum of 6 withdrawals per billing cycle. Synchrony will charge you $20 for each withdrawal over the 6 you’re allowed. Make sure you don’t exceed this limit because your 1.05% yield will quickly turn into a negative yield.
On a lighter note, Synchrony has teamed up with Marvel Entertainment on a series of “Save Like A Hero Videos” that include some videos including a Mall Cop, Cookout, and other videos.
Synchrony and Marvel also have a contest going on right now. You can enter their “Save Like A Hero Contest” and be featured on Marvel Entertainment’s Facebook page and win $100 movie gift card. All you have to do is submit a photo of yourself in a homemade Team Captain America or Team Iron Man costume and say what makes you a savings hero. If you’re interested, the full contest rules can be found at Save Like A Hero Contest Official Rules.
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