Discount rates show mixed results in second quarter

Find out which banks posted the highest rates on savings and money market accounts in the second quarter of 2013.

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After a long period of decline, long-term treasury yields and mortgage rates finally reversed in the second quarter of 2013, rising sharply in May and June. But for rates on savings and money market accounts, the trend has been much more confused, with some categories of rates rising and others falling.

In its latest America’s Best Rates survey, MoneyRates.com found that average rates increased in the following categories in the second quarter: savings accounts in general, traditional bank savings accounts, large bank savings accounts , small savings bank accounts, large money market bank accounts, and small money market bank accounts. At the same time, average rates have fallen in the following categories: online savings accounts, medium bank savings accounts, general money accounts, online money accounts, traditional money accounts and medium bank money accounts.

In all, that makes six categories in which rates have climbed, and six in which they have fallen.

Despite the mixed results, a trend from previous surveys persists: online bank accounts continue to offer a clear advantage over traditional bank accounts in the savings and money market categories. There has been, however, some shuffling this quarter in the lists of the best banks for savings and money market accounts.

America’s Best Rates: Savings Accounts

Here are the 10 banks that posted the highest average savings account rates in America’s Best Rates for the second quarter:

Bank

Savings account rate

1st place

Barclays Bank (ABR Platinum Medalist)

0.958 percent

2sd place

CIT Bank (ABR Gold Medalist)

0.881 percent

3e place (tie)

American Express National Bank (ABR Silver Medalist)

0.850 percent

3e place (tie)

FNBO Direct (ABR silver medalist)

0.850 percent

3e place (tie)

Mutual of Omaha Bank (ABR silver medalist)

0.850 percent

3e place (tie)

Sallie Mae Bank (ABR Silver Medalist)

0.850 percent

sevene place

Ally Bank (ABR bronze medalist)

0.840 percent

8e place (tie)

Cole Taylor Bank

0.800 percent

8e place (tie)

Discover the Bank

0.800 percent

8e place (tie)

GE Capital Retail Bank

0.800 percent

(Editor’s note: GE Capital Retail Bank became Synchrony Bank in June 2014.)

The overall average savings account rate for the quarter was 0.192%, so major banks offered rates more than four times the average, underscoring the benefit of seeking higher rates. Seven of the top 10 savings account rates were offered by online banks, and overall, online banks held a significant advantage over traditional banks. The average rate for savings accounts in online banks was 0.578%, while the average rate offered by traditional banks was 0.125%.

Size had less of an effect on bank rates, with smaller banks having a slight advantage over their larger counterparts. Banks with less than $ 5 billion in deposits offered an average rate on savings accounts of 0.213%, about 2 basis points higher than the overall average.

America’s Best Rates: Money Market Accounts

Here are the 10 banks that posted the best average money market rates in America’s Best Rates for the second quarter:

Bank

Money market account rate

1st place

Doral Bank (ABR Platinum Medalist)

0.950 percent

2sd place

Sallie Mae Bank (ABR Gold Medalist)

0.911 percent

3e place

Mutual of Omaha Bank (ABR silver medalist)

0.850 percent

4th place

Ally Bank (ABR bronze medalist)

0.840 percent

5e place

GE Capital Retail Bank

0.800 percent

6e place

National Bank

0.760 percent

sevene place

EverBank

0.735 percent

8e place

Discover the Bank

0.700 percent

9e place (tie)

West Bank

0.500 percent

9e place (tie)

Bank of Sions

0.500 percent

Overall, money market accounts offered an average rate of 0.175% during the second quarter. While the list of major money market accounts was evenly split between online and traditional banks, on average, online money market accounts enjoyed the same type of advantage over traditional banks as bank accounts. online savings. Rates for money market accounts at online banks averaged 0.550 percent, compared to 0.131 for money market accounts at traditional banks.

As with savings accounts, money market accounts in smaller banks had a slight advantage over accounts in larger banks. The average money market rate in small banks was 0.203%, almost 3 basis points higher than the overall average.

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The mix of upward and downward trends in rates in savings and money market accounts occurred during a period that saw other rates clearly rise. Ten-year Treasury bond yields rose more than 60 basis points in the second quarter, and 30-year mortgage rates rose nearly 90 basis points.

Savings and money market rates have been slower to rise in part because they are shorter-term interest rates than treasury bills or mortgages, and in part because banks hate naturally increase their interest charges. However, the fact that certain categories of bank rates started to increase in the second quarter may mean that deposit accounts are starting to align with the broader trend in interest rates.

Methodology

America’s Best Rates survey is based on an average of the interest rates offered throughout the calendar quarter, rather than a single snapshot of rates. Therefore, the numbers represent the rate levels that have been offered consistently over time. The survey is based on the MoneyRates Index, which includes the 50 largest retail banks in the United States (ranked by total deposits) and a sample of 50 small banks.