Stubbornly high interest rates mean if you're not getting at least 4% on your money — you're getting robbed. And not by a small amount.
Top savings and money market accounts are paying at least 5% in annual interest rates, says Bankrate.com. Brio Direct, a Jericho, N.J.-based online bank affiliated with Webster Bank, is paying 5.35% on its FDIC-insured high-yield savings account, for instance.
That means you should be getting $5,483 in annual interest (compounded monthly) in just the first year on a $100,000 deposit. That decimates the 0.01% both JPMorgan Chase and Bank of America are paying on savings accounts, Bankrate says. Keep your money in those banks and you'll only get $10 a year on your $100,000 deposit — or $5,472.
Don't Wait For Interest Rates
And if you've waited to move your savings to a place to get higher interest rates, it's time to take your money and walk.
The long-awaited cuts in interest rates aren't materializing. The yield on the 10-year Treasury is hanging at 4.57%. "S&P Global Ratings now believes that conditions for a monetary policy easing by the Federal Reserve won't be in place before autumn," said a report.
That means there's plenty of risk-free plump yields from FDIC-backed banks. Brio Direct's high-yield savings is just the highest. It's essentially marketing savings accounts from the Webster Bank unit of Stamford, Conn.-based Webster Financial.
But there are other options, too. VIO Bank, the online unit of privately held MidFirst Bank in Oklahoma City, is paying the highest interest rate on a money market at 5.3%.
What if you're looking for a solid interest rate on a standard savings account? UfbDirect, affiliated with San Diego's Axos Bank, is paying 5.25% on a savings account.
These smaller banks aren't as well-known as the giants. But at least they're paying you what you're due.
High Interest Rate Options
They're not at your giant bank.
| Bank | Rate | Type | Interest paid on $100,000 in a year |
|---|---|---|---|
| Brio Direct | 5.35% | HY savings | $5,483.16 |
| VIO Bank | 5.30% | Money market | $5,430.66 |
| TAB Bank | 5.27% | HY savings | $5,399.17 |
| ufbDirect | 5.25% | Money market | $5,378.19 |
| CFG Community Bank | 5.25% | Money market | $5,378.19 |
| ufbDirect | 5.25% | Savings | $5,378.19 |
| ufbDirect | 5.25% | HY savings | $5,378.19 |
| Popular Direct | 5.15% | Savings | $5,273.32 |
| Bread Savings | 5.15% | Savings | $5,273.32 |
| Popular Direct | 5.15% | HY savings | $5,273.32 |
| SalemFive Direct | 5.01% | Savings | $5,126.66 |
| Quontic | 5.00% | Money market | $5,116.19 |
| Chase | 0.01% | Savings | $10.00 |
| Bank of America | 0.01% | Savings | $10.00 |
