Rare good news for bank depositors: Some savings account and money market rates actually rose in the third quarter of 2012. But to find those higher rates, you may need to look for a particular type of bank.
The MoneyRates.com America's Best Rates survey found that average online savings account rates and online money market rates climbed higher than they were in the second quarter -- even as bank rates in every other category continued to fall.
Falling interest rates have been the norm since the 2008 financial crisis. However, online banks now appear to be giving customers a chance to escape the downward spiral of rates.
Online rates march to their own beat
On the surface, the news about bank rates in the third quarter might seem like the same old story. The average savings account rate surveyed fell from 0.192 percent to 0.179 percent. The average money market rate surveyed fell from 0.224 to 0.211. In other words, bank rates went from low to lower, much as they've been doing since the Great Recession.
Notably, it didn't matter whether you looked at large banks, small banks or medium-sized banks: Each category saw average savings and money market rates drop in the third quarter.
Online banks, on the other hand, took a different direction. The average rate for online savings accounts rose from 0.575 percent to 0.582 percent. The average for online money market accounts rose from 0.620 percent to 0.633 percent.
These increases may seem slight, but against a backdrop of generally falling rates, they are significant. Based on this data, three important insights for consumers emerge:
- Online rates are outperforming traditional bank rates, both on average and in terms of the top rates surveyed.
- With online rates rising and traditional bank rates falling, the gap between them is getting wider.
- With some banks raising rates while the overall averages continue to fall, the reward for shopping around is getting larger.
Here are some notable facts on the direction of savings accounts and money market accounts in the third quarter -- and the details on where you may find better yields.
America's Best Rates: Savings account rates
While the average savings account rate may be an uninspiring 0.179 percent, the leading banks offered rates up to five times that much. The following are the top 10 savings account rates surveyed in the third quarter of 2012:
Bank/Average Savings Account Rate
1. Ally Bank -- 0.90 percent
2. American Express Bank -- 0.87 percent
3. MetLife Bank -- 0.85 percent
4. (tie) Discover Bank -- 0.80 percent
4. (tie) ING Direct -- 0.80 percent
6. Sallie Mae Bank -- 0.78 percent
7. EverBank -- 0.76 percent
8. Mile High Bank -- 0.70 percent
9. Capital One Bank -- 0.60 percent
10. Zions Bank -- 0.54 percent
Ally Bank and American Express both moved ahead of MetLife Bank by raising their rates in the third quarter. While the order of these banks changed somewhat, all of the second quarter's top 10 banks also made the top 10 this quarter.
America's Best Rates: Money market rates
While the average money market rate fell to 0.211 percent, the top rates were more than four times that much. The leading banks are listed below. Note that 11 banks are included, due to a three-way tie for ninth place.
Bank/Average Money Market Account Rate
1. Sallie Mae Bank -- 0.91 percent
2. Ally Bank -- 0.90 percent
3. MetLife Bank -- 0.85 percent
4. (tie) EverBank -- 0.76 percent
4. (tie) Nationwide Bank -- 0.76 percent
6. Discover Bank -- 0.70 percent
7. AIG -- 0.68 percent
8. Zions Bank -- 0.54 percent
9. (tie) Acacia Federal Savings Bank -- 0.50 percent
9. (tie) First Mariner Bank -- 0.50 percent
9. (tie) OneWest Bank - 0.50 percent
As with the savings account list, raising rates was the key to securing the top spots on the list of money market accounts. Both No. 1 Sallie Mae Bank and No. 2 Ally Bank raised their rates in the third quarter. Again, there was a high level of consistency from quarter to quarter: When compared to the second-quarter standings, Acacia Federal Savings Bank is the only newcomer to the list.
The America's Best Rates survey is based on the MoneyRates Index, a sampling of banks that includes the 50 largest U.S. banks plus 50 smaller banks. Key aspects of this survey are that it doesn't include "teaser" rates, which apply only for a limited time, and that the above figures are based on average rates throughout the calendar quarter, which means a bank has to offer high rates consistently to be among the leaders.
Online banking has been gaining momentum as more and more customers realize they can do without a traditional branch structure. With online rates starting to rise as traditional bank rates continue to fall, that momentum appears likely to accelerate.