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How Depressed are Interest Rates?

Some people love rate-chasing (even though it’s not worth it), but these days, even looking is depressing. With interest rates at record lows and more people looking to save their money, banks have little to gain by providing high interest rates. While small banks can gain customers by offering higher rates, large banks with giant customer bases have little incentive to offer high rates.

Here’s a rundown of some popular banks along with their savings account interest rates (Annual Percentage Yield):

  • SmartyPig: 1.35%
  • Ally Bank: 1.00%
  • ING Direct: 1.00%
  • HSBC: 0.80%
  • BB&T: 0.25%
  • Chase: 0.10%
  • Citi: 0.10%
  • TD Bank: 0.10%
  • PNC: 0.10%
  • SunTrust: 0.05%
  • Bank of America: 0.05%
  • Wells Fargo: 0.05%

As you can see, the smaller banks are at the top offering the best rates, while the national banks who have been around for a long time have the lowest APYs.

To put 0.05% interest in perspective, for every $100 you have in an account, at the end of the year you’ll earn a total of 5 cents. 5 freaking cents! So for $1,000, you make 50 cents over the course of a year!

To me, these interest rates are a little upsetting. How can we save money for future goals if we’re losing money (compared to inflation)?

Readers, do low interest rates make you angry? I wasn’t around when they were high (4 or 5%). Is it depressing seeing how far they’ve fallen?



  1. The same low interest rates give us the ability to buy cars, homes, etc. at rates we haven’t seen in decades. In many ways, that penalizes savers, but at least we get SOME benefit from this dip. :)

    • @Wojo, True, mortgage rates are low and people will be appreciating their low rates for the next 30 years, while savings rates are fairly temporary.

  2. I’m a little grumpy about the rates, but not really at the banks. Instead I’m a bit miffed that the Fed has kept interest rates so low which subsidizes spending instead of saving. Sure this may stimulate our economy but I’d like to earn more than 1% on my deposits. My big spend in the coming year or two is my MBA and Federal student loan rates haven’t really dropped. They’re at 6.8 and 7.9% for grad students. So the difference between 1% and 6.8% really bugs me, but I’m hoping to avoid loans altogether.

  3. Savings rates do not bother me as much as loan rates. With interest rates so low, why are loan rates comparably high? I am referring to high for good borrowers!

  4. WOW! You are right, that is a very small percentage of interest to accure over a year. Sometimes its also worth looking into online-only banks and local credit unions for competitive rates. Thanks for sharing!

  5. There would definitely a higher incentive to save if the rates were better. Our emergency / home repair fund is with HSBC. The 0.8% rate is not great, and even negative after taxes and inflation, but that’s the price of liquidity and convenience.

  6. Super Kudos on this recap of rates…I had been wondering about it, but hadn’t had the time to venture out and figure it out.

  7. Yeah…. savings account rates are gonna be low for a while. I think rather than just chasing the best rates, people can have a higher ROI with freelancing for extra cash or working some overtime!

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