More Online Bank Interest Rate Decreases
Tip It!And the hits just keep on coming… Earlier this week HSBC Direct announced that they’re reducing their interest rate form 2.60% APY to 2.45% APY, and I just received notification from E-Trade that they’re reducing their rate form 3.01% APY to 2.50% APY. These sorts of changes make the term “high yield online savings account” almost laughable, as the yields are far from high. If you’re curious as to where things stand at other institutions, be sure to check out my updated list of online savings account interest rates.
Published on January 30th, 2009 - 12 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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January 30th, 2009 at 4:12 pm
From when E*trade is going to reduce the interest rate? Their website still advertises 3.01 % APY.
January 30th, 2009 at 4:47 pm
The new rate will be effective at the end of the business day on Monday, 2/2/09. It’ll still be at 3.01% over the weekend.
January 31st, 2009 at 12:31 am
Darn – I was already down about this when I wrote an article about it earlier this week. Now what?
January 31st, 2009 at 1:23 am
I saw ING dropped to 2.4% APY. Ugh.
January 31st, 2009 at 10:09 am
As discussed on the DollarSavingsDirect review comments, they dropped from 4% to 3.5%.
I just opened a rewards checking account with The Provident Bank (of New Jersey) that pays 5.01%. They haven’t reduced it yet as far as I can tell. It’s only good up to $25k, though, and also has the regular reward checking account requirements (10 POS transactions, 1 ACH deposit, online statement, etc per month).
-Mike J
February 1st, 2009 at 10:16 am
Absolutely right. It will take effect on Monday. Thanks for mentioning it Nickel.
February 1st, 2009 at 12:14 pm
I guess the lesson to be learnt is to just keep ready cash and maybe a month or two worth of emergency cash in these accounts whose interest rates are so volatile.
The remaining emergency cash should be locked up in modular CDs as explained by Nickel previously.
So in the event of an emergency one can use the money market cash to tide over and strategize on how to use the modular CDs.
Of course right now most CDs also offer pathetic rates, so one should wait when a 5 year CD offers much better rates to put a plan in action.
February 2nd, 2009 at 9:46 am
shore bank just dropped from 3.5 to 3.15
February 2nd, 2009 at 3:26 pm
FNBO Direct just sliced their’s to 2.6%
Sucks…
February 2nd, 2009 at 3:50 pm
I have been thinking about opening up an online account and have been doing research. With all the rates lowering, not sure if I want to yet. Do you recommend holding out till the rates improve?
February 2nd, 2009 at 3:52 pm
Craig: To what end? Are you earning more elsewhere? There’s no harm in opening an account now, as your rate climb in the future when interest rates eventually start rising.
February 2nd, 2009 at 3:53 pm
Nickel: I am earning less now because my money is just in savings with my brick and mortar bank. I just didn’t know if it was worth the effort of starting it up now if the rates were low.