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High Yield Savings Accounts at 20 Largest Banks

Despite what I wrote in Beware False Indicators of Bank Health [3], there is a certain amount of comfort in having a physical bank location to go to. A few years ago, a physical brick and mortar bank meant that you weren’t ever going to get close to a high yield saving account’s interest rates. However, several national brand name banks have begun offering high yield online savings accounts in order to compete for your deposits.

I used the list of the 20 largest banks, according to FDIC information current as of May 2008, and only found five banks that offered high yield savings accounts. I was surprised not to see Washington Mutual [4] (3.75% APY) on the list of the largest 20 banks.

#1 Citigroup – 2.25% APY

This New York, N.Y. based bank had approximately $2,199,848M in deposit assets as of May of this year and Citigroup has a high yield online savings account, known as their Ultimate Savings Account, offering a pedestrian 2.25% APY (They have an MMA offering 2.65% APY with bill pay). They used to have a standalone e-Savings account offer but it appears that you are now required to have a linked checking account and the interest rate is a laughable 1.50% APY. (To find this, go to Citi [5], click on Banking near the top, then click on Savings in the left sidebar, and look for Ultimate Savings Account)

#7 HSBC North America Inc.

HSBC, located in Prospect Heights, Ill. with $493,010M in assets, is also the namesake of HSBC Direct – a high yield online savings bank offering a great interest rate on its savings account. I wrote a review on HSBC Direct [6] recently and was surprised to find that I was able to link the account to other high yield savings accounts (ING Direct in that case).

#11 Citizens Financial Group, Inc. – 3.30% APY

Whoops! Citizens Bank Direct is a division of Citizens National Bank, not Citizens Bank. CNB Bank Direct is still a high yield bank but it’s not affiliate with a top 20 bank. (Thanks zashachic!)

Citizens Financial Group is the holding company for Citizens Bank and they just entered the high yield online savings game with Citizens Bank Direct, offering a 3.30% APY interest rate. I don’t know much else as their online offering is brand spanking new (CNB has been around since 1920) but I did find a brief review of CNB at Bank Deals.

#14 Capital One Financial Corp. – 3.50% APY

Not surprisingly, financial services company Capital One has an online savings account offering called the Capital One Online Savings Account [7] (clever huh?) offering 3.50% APY on balances over $10,000 (you earn 2.50% APY if your balance is under $10,000).

#17 BB&T Corp. – 1.75% APY

It’s almost embarrassing to list this but BB&T offers a high interest online savings account that offers 1.75% APY with no minimum balance requirement and no monthly maintenance fees.

The Rest

These banks were on the list but didn’t have high yield savings accounts. Many had money market accounts but none were strictly high yield savings accounts: #2 Bank of America Corp., #3 J. P. Morgan Chase & Company, #4 Wachovia Corp., #5 Taunus Corp., #6 Wells Fargo & Company, #8 U.S. Bancorp, #9 Bank of the New York Mellon Corp., #10 Suntrust, Inc., #12 National City Bank, #13 State Street Corp., #15 Regions Financial Corp., #16 PNC Financial Services Group, Inc., #18 TD Bank North, INC., #19 Fifth Third Bankcorp, and #20 Keycorp.

List of 20 largest banks provided by infoplease.com [8] (based on FDIC data)