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Spotlight on Community Banks: NerdWallet’s Top 10 Savings Accounts

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With all the recent press surrounding big banks and credit unions, it’s easy to think they’re the only two types of financial institutions to choose from. Local community banks are feeling overlooked, and we think it’s time they got their due.

What are community banks, and what can they do for you?

Generally defined as local banks with less than $1 billion in assets, community banks are largely known for being champions of small-business financing. They lend out roughly 66% of their assets to small businesses, compared with 22-27% at big banks. On the consumer side, community banks are equally notable for their personalized customer service and, in many cases, superior financial products. Savings accounts are just one excellent example.

Community bank savings accounts beat the competition

It’s hard to find high interest rates anywhere these days, but we found 10 savings accounts at community banks that beat the puny national average APY of 0.10% by leaps and bounds. In fact, many of these accounts beat the so-called “highest rates in the nation”. Read on to see our full list.

Please visit each bank’s website for a full list of branch locations. The city in parenthesis only refers to the bank’s headquarters.

Traditional Savings Accounts

These savings accounts have no frills, and require no fuss, but their interest rates will blow your big bank’s account out of the water.

Alden State Bank: Savings Account (Rapid City, MI)

Alden State Bank has been helping Kalkaska County residents earn and save money since the Great Depression. Their basic savings account earns more than four times the national average at 0.45% APY. There’s no minimum balance and no monthly service charge. If you’re looking to save for the holiday season, consider opening a Christmas Club Account. This offers the same interest rate, but your account matures just in time for shopping season.

Reliant Bank: Student Savings Account (Brentwood, TN)

Reliant Bank has been serving the mid-Tennessee community since 2006. Although their regular savings account offers a higher-than-average 0.20% APY, we were especially impressed with their Student Savings Account for youth ages 10 – 20, which earns 2.00% APY. There’s no minimum balance or monthly service charge. Plus, once your balance reaches $250, you’ll get a $25 gift card as a thank you for your diligent saving habits. Kids 9 and under are eligible for a similar account with the same great rate through Reliant’s Super Savers program.

KeySource Community Bank: Blue Savings Account
(Durham, NC)

If you’re affiliated with Duke University or the University of North Carolina, you’re eligible for KeySource’s Blue Savings Account with a 1% yield. As an added bonus, they’ll donate to the charity of your choice, UNC Children’s Hospital or Duke Children’s Hospital, when you open an account. You’ll need $100 to do so in person, or $5,000 if you’d prefer to open it online. There’s no monthly fee if you can maintain a $300 minimum daily balance.

Savings and Checking Combos

A savings and checking combo is exactly what it sounds like: you have to sign up for a rewards checking account to qualify for its matching savings account. We think you’ll be glad to do so, because these checking accounts have incredible interest rates as is. Linked checking accounts can earn 3% APY or more! For most accounts, you’ll have to meet a few minimum requirements to qualify for the highest interest rate, such as online banking, direct deposit, or a minimum number of debit card purchases each month. However, even if you can’t meet the requirements, you won’t be assessed a monthly fee.

Bank2: Great Rate Savings (Oklahoma City, OK)

Bank2 is owned by the Chickasaw Nation, which is the 13th largest federally recognized Native American tribe in the United States. The Great Rate Checking Account earns 3.01% APY on any balance up to $15,000, while the Great Rate Savings Account gives you 1.01% APY on your savings balance up to $35,000. Interest from both accounts is deposited into your savings account. You’ll need at least $200 up front to open both accounts ($100 for each).

Westfield Bank: Dream Big Savings (Westfield Center, OH)

Westfield Bank has been serving consumer and banking clients in Northeast Ohio since 2001. Consumers who open a Dream Big Checking Account, which earns 2.01% APY on any balance, are also eligible for the Dream Big Savings Account, which earns 1% APY. Your earnings from both accounts go straight into your savings account, and neither account requires a minimum balance or monthly fee.

The East Carolina Bank: Real Saver (Engelhard, NC)

East Carolina Bank is a larger community bank, with 25 offices in eastern North Carolina. Their Real Saver Account earns 1.01% APY on any balance up to $50,000, and 0.50% on any amount over that. You must maintain a $200 minimum balance to waive the $3 monthly service fee. This account is linked to the Reward Checking Account, which earns 3.01% APY, and that interest is automatically deposited into your savings account. There’s no minimum balance required to earn rewards, although there is a $100 minimum opening deposit.

Bank of the Sierra: Reward Savings (Porterville, CA)

Bank of the Sierra serves Central California with offices in Tulare, Kern, Kings and Fresno counties. Their Sierra Reward Checking Account earns 2.09% APY on balances up to $25,000. Open a Reward Savings Account along with it to earn 1.09% APY on your savings up to $25,000. There’s no minimum balance and no monthly service fee, and all your interest is deposited into your savings account automatically.

Internet Accounts

You’ve probably heard of major Internet banks like ING Direct and Ally, but did you know that community banks offer online, high-yield savings accounts too? These savings accounts support local investments near each bank’s headquarters, but anyone in the nation can open and manage an account online.

Newton Savings Bank: eSavings High-Yield Savings Account (Bethel, CT)

Newton Savings Bank serves all of Connecticut, and they’ve been in business since 1855. However, you don’t need to be a Connecticut resident to sign up for their online-only, high-yield savings account. This account has no monthly maintenance fee, and it only requires a $25 minimum opening deposit. You’ll get the full interest amount, 0.85% APY, as long as your balance is $10 or higher.

SFGI Direct: Savings Account (Moorefield, WV)

SFGI Direct is a division of Summit Community Bank, which has 9 branches in West Virginia and 6 in Virginia. Their online savings account, however, is open to everyone, and offers 0.91% APY. There’s no monthly service charge. The minimum balance to open an account is $500, but you only need to keep $1 in there to earn interest.

Urban Partnership Bank: Online Savings (IL, OH, MI)

Urban Partnership Bank was created in August 2010. They’re slightly larger than a community bank with $1.4 billion in assets, but they make our list for having a unique community focus. They’re a certified community development financial institution, committed to spurring economic growth in Chicago, Cleveland and Detroit by offering affordable financial services to local residents. Their online savings account has no monthly fees, and you’ll earn 0.70% APY for a daily balance of $1 or more. If you can afford to invest more than  $100,000, you’ll earn 0.75% APY.

Looking for a savings account that’s closer to home?

Check out the NerdWallet rates tool to search for a local, high-yield savings account by zip code.

  • http://twitter.com/sunkcosts slug

    You need to look at SECU of NC as well. 1% on money market accounts there with no requirements.

    Also, the details of East Carolina Bank do not look good.

    “Notice of Tier and Rate Change for Real Saver Savings Effective March 1, 2012:
    In response to the current rate environment, effective March 1, 2012, East Carolina Bank will be making the following changes to Real Saver Savings.
    • 1.01% APY* on qualifying balances up to $25,000.00
    • 0.50% APY* on qualifying balances over $25,000.00
    • 0.05% APY* on all balances when qualifications are not met
    East Carolina Bank remains committed to paying competitive interest rates. This account will remain a free checking account and it still includes nationwide ATM fee refunds**, free online banking, free eStatements, no monthly fees, and no minimum balance requirements. Be sure to check out our Real Savers savings account designed to help you save a little more each month.”

    • Laura Edgar

      Thanks for the tip. We’ve updated the East Carolina Bank’s rates to reflect the upcoming changes. 1.01% APY is still a pretty good deal.

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  • Swapon Mr.

    Awesome information.