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Mid-Size Banks Offer Best Yields

Savers may want to take the Goldilocks approach to shopping for a bank savings account.

Medium-sized banks, those with between $5 billion and $25 billion in deposits—offered better interest rates in the first quarter than their smaller and larger counterparts, according to a survey by Savings rates in those institutions averaged 0.26%, compared to 0.20% for banks overall. Money market rates at medium sized banks averaged 0.28%, compared to 0.24% overall. Regional banks tend to offer better rates in order to compete with bigger banks that have name recognition, says Greg McBride, senior financial analyst for

As lending picks up in parts of the country, mid-sized regional banks could be working to build up deposits in order to issue more loans, says McBride. In contrast, larger banks, which have reported increases in lending this earnings season, are already swimming in new deposits and have little need to attract more cash, he says.  Medium-size banks are also better positioned than the smallest community ones to, says Richard Barrington, senior financial analyst for

To be sure, even better rates can be found elsewhere. Online banks, for example, offered an average 0.59% on savings accounts and 0.69% on money market accounts, according to Indeed, the highest paying savings accounts were offered by Discover Bank, which had a 0.89% annual percentage yield and Sallie Mae Bank, with 0.87%.

And while mid-sized banks are offering the best deals, they usually aren’t accessible to all savers across the country. “Consumers need to do some specific comparison shopping in order to get the best deal,” says Barrington. 


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