At Money Aisle, Banks Bid for Your Deposits
July 2nd, 2008 by David Weliver
If you’re stashing away a few thousand dollars for a rainy day, you probably don’t give your savings account’s interest rate much thought. But if you need to save $10,000 or more in an FDIC insured account, you might feel like you deserve better than 3%. The new banking auction site Money Aisle agrees.
Money Aisle is like eBay for savers. In a simple form, you tell Money Aisle the amount of your initial savings deposit, whether you want a high yield savings account or certificate of deposit, and your home state. Hit submit, and several dozen savings banks compete for your deposit. Money Aisle returns the bank offering the highest available rate for your deposit level.
If you like and accept the offer, you will be forwarded to the bank’s website to complete the deposit. If you’re unhappy with the result, you’re under no obligation to deposit. You can try another auction, or come back another day.
How did Money Aisle perform?
We ran three different searches for high yield savings accounts (in Massachusetts) for $600, $5,000, and $15,000. The $600 search returned a 2.9% APY at Legacy Banks, with branches in Massachusetts and New York. Our $5,000 search did slightly better, catching a 3.4% APY at a New York credit union. Finally, our $15,000 search also netted a 3.4% APY, this time at Beverly National Bank.
While it was fun to watch Money Aisle work, the resulting rates were disappointing. Most of the online high yield savings accounts we watch and review here at Money Under 30 beat out the 2.9% rate for a $600 deposit, and HSBC Direct offers a 3.5% APY (with no minimum deposit requirement) that beats the rates Money Aisle returned for both $5,000 and $15,000 deposits.
Two factors may contribute to the lagging rates we received. First, the site is new, so we expect rates to improve as more banks join in on the auctions. Second, Money Aisle returned brick-and-mortar banks in our area. While the rates returned were many times the banks’ published rates, due to customer service expenses, brick-and-mortar institutions can’t compete with online-only banks like HSBC.
Bottom line? If you need the best possible savings rate at bank that may have branches in your area, give Money Aisle a try. If not, try one of these online savings accounts.
Have you tried Money Aisle? Did you find a higher savings rate than online savings banks?
