Best Interest Rate Banks

The current rate for HSBC Direct is 2.25% APY.

The 3.50% APY offer for HSBC Direct’s online savings account is a “promotional” offer that was extended from August 15th to September 15th. This is good news for those who pushed their funds to the higher offer. There’s still no hint as to where the rates will go after the promotion ends but with so many other banks increasing their rates, there’s a good chance the 3.50% APY will stick.

My strategy has always been to keep several of these accounts open and shift funds from my checking account into the highest rate when they are available. I don’t “rate chase” because the interest lost in the transfer can easily wipe away any additional interest earnings, but it’s good to always push to the highest bar available.

The Federal Reserve is likely to increase interest rates in these next few FOMC meetings and that means that high yield online savings banks will begin increasing their rates as well. Already we’ve seen E*Trade increase their yield to 3.01%, inching closer to the bar that HSBC Direct has set at 2.60%. As we get closer to these future meetings, banks will start raising rates by a few tenths of a percent to entice you to move your savings from one bank to another.

Unless the rate difference is at least a 0.75% to a full 1%, I wouldn’t bother. On a $10,000 balance, half a percent is $50 if the dollars were transferred instantly. Take away taxes and you’re looking at even less. You’ll want to wait until it’s more, like $75 or $100 before you want to make the move because you lose interest when your money is between banks.

However, since the cost of opening a new account is near zero, you might want to consider opening an account at the highest current yield, 3.50% at HSBC Direct, and just move all new savings into that account for the time being.

We here at Best Interest Rate Banks like to keep things nice and simple. On our homepage, we list the best banks we know of along with all the important details you need to make a good decision on where to put your funds. All the banks listed will be online banks with a savings and/or checking component that will earn you the highest interest rates possible. You won’t find 1.0% APY interest rate banks, each is going to beat the federal funds rate by a healthy margin.

Here, in the articles section, we’ll discuss numerous issues pertaining to the banks, best practices, and any other ideas we believe are worth understanding when dealing with banks. Don’t lock yourself into a 3.0% APY certificate of deposit when you can just put it in HSBC Direct and get 3.50% APY plus the flexibility to move it wherever and whenever you want to.

That’s just a brief introduction to what you can expect here.