FNBO, Others Lower Online Savings Interest Rates
Since the Fed lowered the discount rate (the rate at which it lends money to banks), many online savings accounts have followed and have lowered their rates. FNBO Direct was offering a 6% promotion but is now offering a still-respectable 5.05%. Here is an interest rate round-up from around the web:
ING Direct: 4.5% to 4.3%
ING Electric Orange: 4% to 3.5%
HSBC Direct: 5.05% to 4.5%
FNBO Direct: 6% to 5.05%
Emigrant Direct: 5.05% to 4.75%.
Bankrate has some more interest rates from online savings accounts and more. Check it out.
Expect other banks to follow. Also as of right now, Washington Mutual’s online savings is still at 5%. So your emergency funds will be earning a little less interest but loans should be cheaper. Money market accounts may seem like a better alternative if you want higher rates but some aren’t FDIC-insured. I’m still not quite sure what I going to do with my emergency fund right now. I may keep it at FNBO but I’ll keep my options open. I’m going to wait a little bit while all the banks catch up and lower rates and then see who has the best rate.