Average Bank Interest Rates 2019 - Elite Personal Finance
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Average Bank Interest Rates 2019

EPF March 23, 2019
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Citing the latest data from the Federal Deposit Insurance Corporation (FDIC) – for the week of March 18, 2019 – national average bank interest rates have shown a slight uptick since February. While average interest rates for checking accounts have remained constant, savings accounts and money market instruments both displayed a spread increase of 0.01%.

 

Deposit Product: National Average Rate:
Savings Accounts 0.10%
Money Market Investments 0.18%
Checking Accounts 0.06%

 

Following the trend, rate cap figures also moved in higher.

Calculated by adding 75 basis points (0.75%) to the national average rate – savings accounts (0.85%), money market instruments (0.93%) and checking accounts (0.81%) figures apply to deposits of less than $100,000.

 

Average Bank Interest Rates 2019: Statistics and Key Findings

National average savings and money market rates increased by a spread of 0.01% over the last month. Both savings products have displayed interest rate growth over the last year-and-a-half after staying roughly flat from 2013-2017.

Traditional banks offer savings rates that range from 0.09% below to 0.90% above the national average and certificate of deposit (CD) rates that range from 0.135% below to 2.68% above the national average. However, even with the positive spread, traditional banking products still lack the necessary return to keep pace with inflation.

Online banks offer savings rates that range from 2.00% to 2.25% above the national average and certificate of deposit (CD) rates that range from 1.81% to 2.69% above the national average. Well above its traditional peers, online banks offer the best savings return and still provide the same Federal Deposit Insurance Corporation (FDIC) protection.

Historical national average checking account interest rates have decreased by a spread of 0.07% over the last 10-years. However, recently they have increased by a spread of 0.02% over the last two-years.

Of the 11 traditional banks in our study, only two offer average checking account interest rates that supersede the current national average of 0.06%. As well, only one of 11 traditional banks offer average savings rates that supersede the national average of 0.10%.

Within the traditional bank category, average checking account interest rates range from 0.01% to 0.20% with both Huntington National and Capital One (0.20%) offering the highest average rates. Conversely, the largest traditional banks – Bank of America (0.01%), Chase Bank (0.01%) and Citibank (0.023%) – offer some of the lowest average checking account interest rates.

Online banks offer average checking account interest rates that range from 0.01% to 1.25%. Axos Bank (1.25%), Aliant High-Rate Checking (0.65%) and Radius Bank (0.50%) offer the highest average rates, while HSBC Direct Checking (0.01%), Ally Bank (0.10%) and TIAA Bank (0.25%) offer the lowest average rates.

Average Bank Interest Rates 2019: Charts, Graph, Analysis

 

Historical US National Average Bank Interest Rates

To climb out of the worst recession in modern US history, Federal Reserve officials used lower interest rates to pump liquidity into the economy and stimulate economic growth. As you can see – in 2009 – national average savings rates took a steep dive before flattening out from 2013-2017.

 

Year (End): Savings Accounts Money Market Instruments Checking Accounts
2009 0.20% 0.34% 0.13%
2010 0.17% 0.23% 0.10%
2011 0.11% 0.15% 0.07%
2012 0.07% 0.11% 0.05%
2013 0.06% 0.09% 0.04%
2014 0.06% 0.08% 0.04%
2015 0.06% 0.08% 0.04%
2016 0.06% 0.08% 0.04%
2017 0.06% 0.09% 0.04%
2018 0.09% 0.17% 0.06%

 

Money market instruments exhibited a similar trend.

Although declines were much larger in magnitude, money market interest rates finally stabilized in 2014 before beginning an upward ascension in 2017.

For checking accounts — after displaying a continuous decline from the end of 2009 until the end of 2017 – national average interest rates began to show signs of life in late 2018.

However it’s worth noting, while the Effective Federal Funds Rate has increased by nearly 1% since the start of 2018, average interest rates for savings accounts, money market instruments and checking accounts have been relegated to a pedestrian 0.01%, 0.01% and 0.02% spread increase over the same time period.

 

Average Bank Interest Rates: Traditional US Banks

Assumes Savings Balances of $1 to $10,000:

All Traditional Banks are FDIC Insured:

When analyzing the table, you can see how the story takes shape.

Within our sample, 10 of 11 brick-and-mortar banks display average savings rates that fall below the national average, with only one contributor – Capital One – looking like a decent option.

Conversely, certificates of deposit (CDs) offer some relief. Our analysis shows traditional bank CD rates range from 0.135% below to 2.68% above the national average, with two options – Capital One and SunTrust – allowing you to outpace inflation.

 

Bank: Average Savings Rate: Average CD Rate: Average Checking Rate:
Bank of America 0.045% 0.21% 0.01%
Wells Fargo 0.03% 0.65% 0.03%
Citibank 0.04% 0.05% 0.023%
Chase Bank 0.01% 1.02% 0.01%
HSBC 0.01% 1% 0.01%
US Bank 0.01% 0.045% 0.01%
SunTrust 0.01% 2.05% 0.01%
PNC Bank 0.01% 0.41% 0.01%
Huntington National 0.02% 0.75% 0.20%
TD Bank 0.05% 0.15% 0.025%
Capital One 1% 2.86% 0.20%

 

When isolating checking accounts, we found only two of 11 banks offer average checking account interest rates that supersede 0.06%. And with rates ranging from 0.01% to 0.20%, both Huntington National and Capital One – from an interest-only perspective – provide the most attractive options.

 

Average Bank Interest Rates: Online US Banks

Assumes Savings Balances of $1 to $10,000:

With savings rates ranging from 2.00% to 2.25% above the national average and CD rates ranging from 1.81% to 2.69% above the national average — online institutions clearly have a leg-up in the investment department.

 

Bank: Average Savings Rate: Average CD Rate:
Marcus By Goldman Sachs 2.25% 2.36%
Barclays Online Savings 2.20% 2.07%
HSBC Direct Savings 2.22%
American Express Bank 2.10% 2.13%
Discover Bank 2.10% 2.26%
Citizens Access 2.35% 2.87%
Ally Online Savings 2.20% 1.99%
Synchrony High Yield Savings 2.25% 2.27%

 

When assessing all factors, Marcus By Goldman Sachs offers the most attractive savings option.

As a subsidiary of one of the most prestigious investment banks on Wall Street, Marcus By Goldman Sachs offers brand-power few can rival. More importantly – for its savings accounts — there is no minimum balance and no hidden fees as long as you stay within the Federal limit of six transactions per month.

As a comparison, Citizens Access has a higher savings rate but requires a $5,000 minimum to be eligible.

And what about CDs?

Marcus By Goldman Sachs requires a $500 minimum, but it’s still lower than Discover Bank ($2,500), Citizens Access ($5,000) and Synchrony High Yield Savings ($2,000). As well, Barclays Online Savings, American Express Bank and Ally Online Savings allow zero-minimums for CDs, but their average interest rates are 0.29%, 0.23% and 0.37% less than Marcus By Goldman Sachs.

Last – and most important – Marcus By Goldman Sachs is a registered member of the FDIC so all savings account and CD balances are Federally insured up to a combined $250,000.

Now for checking accounts.

Because many of the online banks above don’t have checking account options, we compiled data from other institutions to provide the most useful information. With average rates ranging from 0.01% to 1.25%, the offerings are much lower – although expected – than the average savings and CD rates above.

 

Institution: Average Checking Account Interest Rate:
Ally Bank 0.10%
Charles Schwab Bank 0.40%
HSBC Direct Checking 0.01%
TIAA Bank 0.25%
Radius Bank 0.50%
Axos Bank 1.25%
Alliant High-Rate Checking 0.65%

* Checking Accounts that don’t pay interest are excluded from calculated averages

 

At the top-end of the range is Axos Bank.

Offering 1.25% within its Rewards Checking Account, the online lender positions itself well-above its peers. However, to qualify for the full 1.25%, you need to meet three requirements – each triggering a 0.4166% bonus.

  1. Direct deposit $1,000 or more in your account each month
  2. Use your Axos debit card for a total of 10 transactions per month (min $3 per transaction)
  3. Use your Axos debit card 5 more times for a total of 15 transactions per month (min $3 per transaction)

Radius Bank is another high quality offering.

With an average checking account interest rate of 0.50%, the company has three account options. However, to receive 1% or 0.50% the company requires a minimum deposit of $2,500. To earn 0.01%, it requires a minimum deposit of $1,000. As well, balances less than the minimums don’t earn any interest.

With Charles Schwab Bank (0.40%), you have zero minimum balance requirements. However to qualify, you have to link its High Yield Checking Account to an online brokerage account.

Last in the high-end range is Aliant High-Rate Checking (0.65%).

While its average checking account interest rate is higher than both Radius and Charles Schwab, it’s the only online institution in our study that does not have FDIC coverage. As a credit union, Aliant is insured – up to $250,000 – by the National Credit Union Association. Created by the U.S. Congress in 1970, the Federal Agency provides deposit protection analogous to the FDIC.

When breaking down Aliant’s interest rate requirements, it categorizes interest payments as Checking Dividends.

To qualify, you must:

  1. Opt for electronic statements only
  2. Set up a recurring monthly electronic deposit which can be payroll, ATM, mobile check, or recurring transfers from another financial institution

Account holders who meet both monthly requirements receive 0.65% interest – paid at the end of each month. If you don’t meet both requirements, you don’t receive a dividend for that month.

 

How We Conducted the Study

To present the most accurate information, we went directly to the source. First, we analyzed national statistics from the Federal Deposit Insurance Corporation (FDIC). Next, we combed through the official website of each bank, crunched the numbers and consolidated the findings to present the most accurate depiction of average savings, money market and checking account interest rates within the United States.

As well, our study uses the most up-to-date statistics as of March 18, 2019.

 

Conclusion

Despite the recent uptick in interest rates, investors shouldn’t get too excited about their future prospects. While the US economy has shown unwavering strength over the last several years, many economists believe we’re near the top of the economic cycle. As well, with US-China trade uncertainty and global GDP growth continuing to slow – future interest rate increases could be few and far between.

And while interest rates continue to push the ‘lower-for-longer’ theme, what’s advantageous for many borrowers provides little relief for the average saver.

For checking accounts – while they are not used for investment or growth purposes – many options in our study provide a small amount of interest relief regardless of your account balance.

Most importantly, a respectable interest rate is essential to keep pace with inflation. As the cost of goods and services rise, your purchasing power declines in the process. While almost all of the online savings and CD products supersede the 2% target, a few of the lagging online checking account options can still keep you from falling too far behind.

 

Sources:

Current US National Average Savings, Money Market and Checking Account Interest Rates

Historical US National Average Savings, Money Market Checking Account Interest Rates

Traditional Banks:

Bank of America Average Savings, CD and Checking Account Rates

Wells Fargo Average Savings, CD and Checking Account Rates

Citibank Average Savings, CD and Checking Account Rates

Chase Bank Average Savings, CD and Checking Account Rates

HSBC Average Savings, CD and Checking Account Rates

US Bank Average Savings, CD and Checking Account Rates

SunTrust Average Savings, CD and Checking Account Rates

PNC Bank Average Savings, CD and Checking Account Rates

Huntington National Average Savings, CD and Checking Account Rates

TD Bank Average Savings, CD and Checking Account Rates

Capital One Average Savings, CD and Checking Account Rates

Online Banks:

Marcus by Goldman Sachs Average Savings and CD Rates

Barclays Online Savings Average Savings and CD Rates

HSBC Direct Savings Average Savings Rates

American Express Bank Average Savings and CD Rates

Discover Bank Average Savings and CD Rates

Citizens Access Average Savings and CD Rates

Synchrony High Yield Savings Average Savings and CD Rates

Ally Bank Average Savings and CD Rates

Ally Bank Average Checking Account Interest Rates

Charles Schwab Bank Average Checking Account Interest Rates

HSBC Direct Checking Average Checking Account Interest Rates

TIAA Bank Average Checking Account Interest Rates

Radius Bank Average Checking Account Interest Rates

Axos Bank Average Checking Account Interest Rates

Aliant High-Rate Checking Account Interest Rates

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