Best Savings Rates Average 1.39% APY - Top Rate Remains at 2% APY

For the fifth week in a row, Southern Community bank has the best savings rate on the BestCashCow rate tables, paying 2% APY on savings deposits via its Ready Saver program. That's 60 basis points higher than the BestCashCow savings rate average which remained steady this week at 1.39% APY (BestCashCow tracks the 30 highest savings rates in the US). What's nice about Ready Saver is that it has a relatively low minimum balance of $1,500.

Everbank continues to offer their promo rate of 2.25% APY for the first three months on new money. After three months, the rate drops to 1.26% APY for a 1-year blended APY of 1.51%. Franklin Synergy rounds out the top with a 1.75% APY savings rate with a minimum balance of $25,000.

The savings rate average remained steady because there were not increases or decreases in rates on the BestCashCow savings and money market rate table. Banks seem to have taken a wait-and-see approach to what will happen to interest rates and the economy. In the most recent FOMC meeting two weeks ago, Bernanke made it clear that rates will stay low for a good deal longer. Despite that, many economists, inculding former Fed Chairman Alan Greenspan believe it is just a matter of time before massive deficit spending sends interest rates higher. Until the unemployment rate shows some decline though, it's hard to see rates moving up much. The Fed has a dual mandate of low inflation and maximum employment. Right now it has the low inflation but unemployment stands near 10%.

The worst of the declines in savings rates seem to be over althought it's not inconceivable we'll see average ratings hitting 1% APY in the next couple of months if the rate outlook doesn't change. That means the top rate will be somewhere near 1.5% APY. The slow drift down continues.