bank rates

Top Rates Usually Come From Small Banks

Sometimes you know something. And sometimes you really know it, with numbers.

Having ranked the country’s top CDs, savings and money market accounts for years, we’ve observed that the highest yields almost never come from the biggest banks.

Take one scan of any of our rankings of the best nationally available rates, and you’ll find no Chase, no Bank of America and no Wells Fargo anywhere among the top returns.

In fact, of the nation’s 10 largest banks, only one offers any rates worth a Bankaholic mention, leaving the rankings populated mostly by mid- to smaller-sized banks that you may not have heard of except in this space.

But exactly how many big, medium and small banks are in our savings account, money market account and CD rankings?

Using the most common way of ranking banks by their assets – primarily the value of their interest-generating loans and bonds – we sharpened our pencils to find out.

Note that the banks represented above offer nationally available savings accounts, MMAs or certificates of deposit available to anyone without restrictions, either online or through the mail.

In addition, we’ve defined “top-paying banks” for savings and money market accounts to be those occupying a spot on our Savings and MMA Leaderboards.

For CDs, top-paying banks are those that offer a return within a quarter of a percentage point (0.25%) of the top nationally available yield in each of the six terms we track on our CD Rates Leaderboard.

As you can see in the chart, of the 15 banks offering top-paying savings or money market accounts, only one is a Top 50 bank, Synchrony.

Even looking to the next tier, only six of the top savings account and MMA rates are held by Top 100 banks, with a lion’s share of 60% offered by smaller institutions like Incredible Bank, Citizens State Bank and iGObanking.

For CDs, mid-sized to small banks are even more dominant. Just 13 of the 38 top-ranked banks in various CD terms are sized in the Top 100, meaning about two-thirds of the country’s best CD yields (66%) are paid by smaller banks.

Top contenders here include California First National Bank, MySavingsDirect, Colorado Federal Savings Bank and American Bank.

To be fair, there are two titans in the CD rankings.

Ally Bank, the nation’s 22nd-largest bank, has consistently earned spots in our rankings.

Ninth-ranked Capital One recently made dramatic increases to its CD rates to become competitive in our rankings.

Taking the data a step further, you can see how smaller versus large banks compare across the full spectrum of deposit accounts we track.

Here you can see how dominant the smaller banks are in the shortest-term CDs, as well as in MMAs. Only in one ranking – 60-month CDs –do we see Top 100 banks outnumbering the smaller banks.

So now we know quantitatively what we’ve observed all along: Bigger does not mean better, and the little guy is often the hero for savvy savers.

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