Online Savings Account Rate Changes
Tip It!Not long after the Federal Reserve’s recent interest rate cut, ING Direct dropped their interest rate from 3.00% to 2.75%* APY. This is par for the course for ING Direct, as they’re always among the first to drop rates and the last to increase them. Not long thereafter, HSBC Direct dropped their rate from 3.25% to 3.00% APY*. And now, FNBO Direct has dropped their rate from 3.50% to 3.25%* APY.
While I’m a bit disappointed, I can’t say that I’m very surprised. Actually, the most surprising thing to me right now is that banks such as WT Direct (3.31%* APY) and E*Trade (3.30%* APY) haven’t followed suit (yet). It’s likely only a matter of time.
As for us, we’re sticking with FNBO Direct which is, in my opinion, one of the very best online savings accounts out there (read my review). Not only have they consistently offered high rates, but they’re also amongst the safest online banks.
*For updated rates, check out my list of online savings account interest rates.
Published on October 24th, 2008 - 13 Comments
Filed under: Banking
About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
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October 24th, 2008 at 4:33 pm
My checking account is still making more interest than your savings account.
http://www.centurybankdirect.com
Savings: 3.41%
Checking: 3.35%
Money Market: 3.57%
October 24th, 2008 at 4:34 pm
Short term (6month) CDs probably are a better option.
October 24th, 2008 at 4:40 pm
Citibank is still offering a 6 month cd for 4%
October 24th, 2008 at 6:56 pm
Of course I’m sad that FNBO dropped their rate but I’m not surprised, I expect it to drop again soon with all the talk of another fed rate cut. Sucks for savers. I’ll stick with FNBO, I’ve been happy with them and I like the liquidity of a savings account. I may put some money in a CD but never all of it.
October 24th, 2008 at 9:15 pm
Yep, those high yield savings accounts aren’t doing very much these days. I think they’re going to get worse before they get better too. It’s trickier than playing the stock market lately.
October 25th, 2008 at 12:19 pm
why FNBO shoudl be better than Etrade ?
October 25th, 2008 at 5:00 pm
3.25 is still really good! I am not complaining!
My hubs got in a car accident and the lady who was at fault had AIG, so far, they have not paid up for the car! Any tips/ ideas? We call them about twice a week to remind them.
~The Bargain Shopper Lady
October 27th, 2008 at 8:35 am
I use FNBO, Dollarsavingsdirect and Banco Popular (Money Market). The last two are at 4.00% with the MM account guaranteed through 12/31/08. Closed my Emigrantdirect account to open the Dollarsavingsdirect. So far, customer service at both has been exceptional.
October 27th, 2008 at 11:10 am
How about adding Principal Bank and Discover Bank rates to your discussion? It would be nice to have on-line bank rates in one place. Bankrate often leaves many on-line bank rates out of their list.
October 27th, 2008 at 12:18 pm
dollarsavingsdirect.com is still 4.0% APY
October 27th, 2008 at 1:15 pm
I work on the PR team representing MoneyAisle.com and we have been seeing high-yield savings account rates around 4% recently. So far it doesn’t seem that rate changes are affecting the 100 or so banks in our network.
October 28th, 2008 at 4:24 pm
GMAC Bank still has their no-minimum Online Savings @ 3.75%, and they also removed the $500 minimum on the Money Market, which isn’t as impressive @ 3.00%.
June 30th, 2009 at 3:35 pm
No banks offer more than 2.25% on their savings rates. I have checked out all the ones discussed above.