This is a great time to be a consumer looking for a high yield savings account or looking to open a high interest Certificate of Deposit (CD). In our current economic climate, many banks are scrambling to line up new deposits, and you can take advantage of this by letting banks bid for your money. MoneyAisle is an online application that allows you to do just that.
How MoneyAisle Works
1. Pick Your Product (either CD or high yield savings account). When you choose your product, you will input the amount of money you wish to invest, geographic location, and duration for the CD (if applicable).
2. Banks bid for your money. Banks bid through a “live auction process” (it’s really a computer script based on certain criteria, but it’s fun to watch).
3. Choose your rate. Once you have the bids, you select the bank and rates that are most favorable for you. The auction result page will take you directly to an online application form or offer to send your information directly to the bank.
Test Driving MoneyAilse
I decided to give MoneyAisle a test run to see how it compared to my current banks and whether or not I could find better results elsewhere. To run my tests I chose a minimum deposit of $1,000 and another at $25,000, the latter because many banks offer higher rates for larger deposits.
You need to register to see the winning bidder. You can receive the amount of the highest auction without registering, but you won’t be able to see the financial institution’s name unless you register. Registering takes less than a minute and they won’t use your information for anything, so I went ahead and registered.
MoneyAisle Auction winners. It is quite possible you will not have heard of the bank that wins the auction. But that’s OK. All banks in the MoneyAisle system are pre-screened using independent VERIBANC® ratings and are FDIC insured. You will also have access to information about the winning bank, including the winning bank’s name, address, website, year founded, FDIC number, total assets, number of branches, and the customer service number.
Differences between CD rates and high yield savings account rates. You should also keep in mind that once you sign up for a CD, you lock in that rate for the duration of the CD. But high yield savings accounts can change at a moment’s notice due to economic conditions, so the auction rate you sign up for may change after you sign up.
Searching for high yield savings accounts with MoneyAisle
The first test I did was for a $1,000 deposit in a high yield savings account. My test was to see if I could do better than the banks I currently use, or those found on our list of the highest savings accounts rates.
The winning bid through MoneyAisle was Legacy Banks, which came in at 3.25%. Legacy Banks is a full-service bank with 16 branch offices in Massachusetts and New York. Since their high yield savings account matches FNBO Direct, I won’t sign up. The $25,000 test yielded a much higher interest rate – 4.01% from GCF Bank, a community bank located in New Jersey. I don’t have $25,000 to deposit, but their interest rate is high enough that I would consider it if I had $25k lying around.
Searching for CD Rates with MoneyAisle
I recently set up a 5 year CD Ladder, so I don’t need to set up a new account anywhere – but it’s fun to check anyway! Due to certain state laws, CD’s are not available through MoneyAisle’s auction system in the following locations: Georgia, Hawaii, Idaho, Maine, Mississippi, North Carolina, Ohio, Vermont, West Virginia, Wyoming, or Washington DC. I couldn’t check my home state, so I used my wife’s state instead. For a $1,000, 12 month CD, the winning rate was 3.17%. A $25,000 12, month CD was 3.85%. To compare, a 12 month CD rate through ING Direct is currently 3.75%. I wouldn’t change banks for 0.10% difference over 12 months.
I also looked at 5 year CDs – again with $1,000 and $25,000 deposits. The rates were 4.28% and 4.60% respectively. To compare, ING Direct’s 5 year CD is currently 3.50%. There is a pretty large difference here, and I would consider getting a new bank for that large of a difference in interest rates.
Is MoneyAisle worth using?
Yes, I think it’s a good place to start your research, but it pays to look at other places as well, as you may be able to find a few other CD rates which beat those you find at MoneyAisle. But since you should always do your research anytime you are looking for a new account, why not start with an auction system and let banks bid for you?