December 2018 Update – Five Nationally Available Online Savings And CD Accounts that Recently Raised their Rates

Savings and CD rates continued to firm in November. And, while much was made in the last few days concerning Fed Chairman Jay Powell’s unprecedented equivocation to presidential harassment, the Fed will likely raise the Fed Funds rate to 2.25% to 2.50% in December. Here are 5 savings and CD accounts that recenrly raised their rates:

MySavingsDirect – 2.35% Savings Rate, No Minimum Balance

MySavingsDirect is a division of Emigrant Bank, a large New York-based bank. While we have cautioned in our newsletter last month (hyperlink) that Emigrant has a customer-unfriendly history of locking rates down in one subsidiary and becoming competitive in another, we also note that for the time being they continue to be competitive with this brand, having raised the rate 10 basis points in mid-November. Customer reviews indicate that while MySavingsDirect accounts are easy to find and easy to open, ACH transfers from some institutions, including Morgan Stanley and Merrill Lynch, are not possible.

2. CIT Bank Savings Builder – 2.25%, Requires $25,000 Balance or a $100 minimum plus addition of $100 a month

CIT Bank is not a newcomer to the online savings game. While they have not been consistently competitive with their online savings rates, their recent actions indicate a strong initiative to keep their rates above all other well-recognized names. In November, they raised the rate on the savings builder account by 10 basis points to 2.25%. There are two ways to qualify for the savings builder account – either to maintain a $25,000 balance or to open the account with $100 and deposit at least $100 during each monthly measurement period (between the 4^th day of each month until the 4^th day of the following month). We think CIT is likely to remain competitive and named it one of our best bets for 2019 (hyperlnk).

See and compare all of the best online savings rates here.

3. Ally Bank – 2.25% No Penalty CD. Requires $25,000.

We have been a fan of Ally’s No Penalty CD’s for some time and have encouraged those depositors with over $25,000 to take a look in prior monthly updates.

We also recently wrote about No Penalty CDs and the opportunity that they present here (https://www.bestcashcow.com/no-penalty-cds-may-offer-an-easy-way-to-boost-to-your-savings-rates.html).

Ally raised the rate on this No Penalty product twice in November. Since this product can be terminated easily, those invested in it can quickly move to the higher rate each time it is raised.

See and compare all of the best special CD rates here.

We have recommended caution around long-term CDs for some time. However, if the Federal Reserve is going to be tempering its moves in 2019, short term CDs will become interesting.

4. Live Oak Bank – 2.85% 1-Year CD, $2,500 Minimum

Live Oak Bank is a small North Carolina bank that entered the online banking marketplace earlier in 2018. They have not been a consistent competitive player – they have not raised their online savings rate as fast as many competitors, and they have from time to time lowered CD rates. However, at the time of this publication, their 1-year CD rate stands at 2.85% - a rate that is not only well above the more recognized online banks, but that we think has very little risk.

Check out the best 1-year CD rates here.

5. Virtualbank – 3.06 2-Year CD, $10,000 Minimum

We’d be a little bit more cautious about 2-year CDs. VirtualBank does not have uniformly good customer reviews on BestCashCow, but they recently raised their 2-year CD rate to 3.06% which now stands as the top 2-year rate on BestCashCow’s 2-Year online CD rate table. Depending on where you live, you may find still higher 2-year rates at banks and credit unions near you. We don’t believe that savings and CD rates are going down anytime soon, but if believe otherwise, this one might be worth a look.

Have a great month and Happy Holidays.