Internet savings accounts in the USA, have gained a lot of popularity in the banking industry. Many online banks started to offer interest rates around or above 4 percent during early 2000. ING Direct started this market in USA, by creating an Orange account. Many banks followed by providing internet savings accounts with Bank of New York and HSBC leading. Banks in USA found internet savings accounts to be a product with low cost and got large deposits nationwide.
Recently with the financial crunch hitting USA the interest rates provided for opening internet savings accounts have taken a downward path. They are still various online banks which provide you with higher interest rate than most. SmartyPig provides you with the best deal currently in the USA, which is FDIC insured. It offers a rate of 2.15% and only requires you to state a savings target. Other banks currently operating in the USA which offer better deals include EverBank, Zions Bank, Discover Bank, WTDirect, ING Direct, HSBC Advance and Bank of Internet.
In the future with more interest rate cuts, more online banks providing internet savings accounts in USA will fall. With the further rate cuts recently, only two institutions that are currently offering 1.5% interest rates with no limits on the balance. For Knox Federal Credit Union and Palladian PrivateBank offer 1.60% and 1.50% respectively. Other institutions which offer higher interest rates on internet savings accounts in USA are only initial rates and also have a limit on the balance.
