Ally, one of the most popular online banks, informed account holders it's dropping the interest rate on its high-yield savings account from 1.9% to 1.8% today, following previous cuts earlier in the year from a high of 2.2%.
The drop comes as the Federal Reserve debates cutting its benchmark short-term interest rate again. While those rate cuts can help consumers taking out a mortgage or personal loan, it also means that savings account rates suffer.
But in a crowded field, there are plenty of other finance companies vying to hold your money. Here are the companies currently offering over 2% on savings.
Savings rates can change at any time, but with an influx of fintech companies like Robinhood, Wealthfront and Credit Karma now in the banking game, savers can still earn over 2%, at least for now.
- Betterment is currently offering 2.04% on its savings account if you join the waitlist for its soon-to-be-released checking product. Because Betterment is not a bank, it partners with them to ensure that your deposits are FDIC-insured.
- Credit Karma is the newest entrant to the savings game, with a savings account with a 2.03% APY. Credit Karma does not charge any fees, and there's no minimum requirement to open. Like Betterment, it is partnering with banks that will hold savers' money.
- Wealthfront, which operates like Betterment, is currently offering an account with a 2.07% APY.
- Vio Bank is offering 2.27%, the current highest rate, on balances over $100.
Robinhood announced this week that it's relaunching its cash management account with a 2.05% APY, though there is no confirmed release date for this account.
As noted above, most of the fintech companies, save Vio, are not chartered as banks, meaning that the products they're offering are not technically savings accounts. They partner with other regional banks, which hold savers' money and provide FDIC insurance. Savers should research all of their options thoroughly, and get a handle on the banks the companies partner with, before opening an account.
And while they're still offering APYs above 2%, Betterment's rate has fallen since July, when it was at a peak of 2.69%, and Wealthfront's from 2.57%. With additional rate cuts from the Fed, they could fall further.
If you're happy with Ally, there's no need to make a switch: The national average APY rate sits at 0.09% for savings accounts, according to the FDIC, so Ally's 1.8% rate is still 20 times higher.
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