In today's tough economy, every penny counts-especially when it comes to personal savings. For most of the past few years, the average interest rate on savings accounts has been low by historical standards, which makes finding one of the best rates more important than ever when you're seeking to maximize your returns.
Many financial experts have noted that online banks like Ally Bank are able to offer some of the better rates in the exceptionally competitive marketplace because we save the costs of maintaining physical branches and pass those savings on in the form of better rates. In fact, Howard Bayliss, a certified financial planner with Core Financial Planning, LLC, in Bloomfield Hills, Michigan, told us in a recent interview that he steers his clients toward an online bank for their cash savings.
His bank of choice is Ally Bank: "By and large, that's where I've been telling clients to go the last year," Bayliss said. "It's because of the interest rates."
Ally Bank offers rates that are consistently among the most competitive in the country, a fact that's borne out by a look at the long-term average of our Online Savings Account variable APY compared to the long-term average interest rate on savings accounts as reported by the FDIC. Our Online Savings Account and Money Market Account have variable annual percentage yields (APYs) with long-term averages several times higher than the national average. We're able to offer competitive rates because we don't have the expense of physical bank branches and can pass the savings onto you.
Great savings account rates aside, some of Bayliss's clients prefer putting part of their cash savings in CDs. He recommends Ally Bank CDs to customers, especially our No Penalty CD, which allows you to make an early withdrawal of your entire balance, including interest, without penalty after the standard waiting period (the first six days after funding your account).
"I think Ally [Bank] has been the out-front leader in the No Penalty CD, and that has changed the thinking a bit about using CDs for short-term (savings)," Bayliss told us.
Most of his clients — including many older ones who spent years doing their banking at brick-and-mortar institutions — appreciate the convenience of online banking with us, noted Bayliss. "They find it rather easy to use," he added.
If the average interest rate on savings accounts, money market account or other savings option has left you unhappy, check out Allybank.com. Customer care representatives are also available 24/7 to answer your questions online via email or webchat or by phone at 877-247-ALLY (2559).