One of the most basic types of deposit products, Savings and Money Market accounts offer users access to their money, along with the stability of FDIC-backing. These accounts traditionally offer small to moderate returns for account holders, especially when compared to investment accounts in a bull market. This is a trade-off many banking clients are willing to make for the known benefits of basic Savings products. In this Bank Monitor Report, we examine mass-market savings options available at each of the 17 Bank Monitor firms, looking for attributes that help accounts stand out from their competitors. In particular, we detail the APYs and maintenance fees associated with each account, along with any perks or additional attributes. This is our first look at the Savings and Money Market account segment since the spring of 2011.
Specifically, this report focuses on the following criteria:
- Interest Rates and APYs
- Additional Fees
- Relationship Rates
The interest rates on savings accounts have only gone down since our last report on this topic. Only one firm increased the interest rate on its base savings product during this window, with the standard APY rising from 0.05% to 0.10%. Overall, the average APY for the 14 firms featured in both this report and our 2011 report dropped from 0.16% to 0.08%. The average money market APY dropped from 0.24% to 0.06% over the same period. This is not a friendly climate for savers, as eight firms in this report offer only a rock-bottom 0.01% interest on their base savings accounts. We recommend that firms offer at least 0.50% interest on all savings products as an easy, client-friendly way to stand out from the competition.
One of the few bright spots for account prospects in search of a new Savings account is the increased availability of fee-free accounts; five base-level Savings accounts and one basic Money Market account are currently available without a fee at their respective banks. For ten of the accounts that carry a monthly maintenance fee, meeting a minimum daily balance requirement waives the fee. Ten firms also waive the fee when clients set up a direct deposit or a monthly transfer to the account.
Relationship rates can help banks entice clients into building a multi-account relationship. Seven firms tracked by Bank Monitor currently offer these rate bonuses. Four firms offer relationship rates when clients link an eligible account, usually a checking, mortgage or HELOC account. Three other banks instead offer relationship rates as part of a package the firm promotes to clients. B of A is the only firm that includes a balance requirement to earn relationship APYs.