Yes, all good things must come to an end. The days of high-yield savings accounts offering 5% or even 6% with no minimum balances are over.
This is what some of my favorites are paying:
Emigrant Direct: 3.6% down from 5.05% www.emigrantdirect.com
ING Direct: 3.4% down from 5% www.ingdirect.com
Shore Bank: 4.15% down from 5% www.sbk.com
According to www.Bankrate.com the highest online savings account is now paying for an account with a $1 minimum balance is 4.10% at E*trade Bank and Ameritrust Bank in Cleveland. I guess they don’t know about ShoreBank here in Chicago.
Despite the lower interest rates the accounts are still a good deal for your short term savings. They still pay more than 10 times the .25%-.35% interest that traditional savings accounts at some of the larger banks in Chicago pay.
That difference can add up. If you had $10,000 in an internet savings account at Shore Bank you would earn approx $415/year in interest. If you had it at a bank that paid 0.25% per year you would earn approx. $25/year. Is it worth $390/year to spend 20 minutes setting up your online high-yield savings account?