March 29, 2013

Best and Worst States for Savings Accounts

Surprisingly, states with high unemployment and dire fiscal situations fared well

Good economic news for Rhode Island? Is it possible?

After suffering a credit union collapse in the early 1990s, the “biggest little state in the Union” takes the top spot for savings account interest rates in the nation, according to the interest rate information in the GoBankingRates database. Little Rhodey has an average annual percentage yield of 0.32%. Runners-up include North Carolina and Vermont, both with averages of 0.30% APY.

The study, released on Friday, finds that savers’ ability to find high-yield savings rates can depend on where they live.

“Hearing their state is 'good' or 'bad' for saving money may not mean much to depositors, but seeing the hard numbers laid out on a U.S. map really puts things in perspective,” GoBankingRates managing editor Casey Bond said in a statement. “Savers can use this graphic to guide where and how they save their money in the future.”

GoBankingRates surveyed its database of 4,000 local banks and credit unions to find the average savings account interest rate in each state and in Washington, D.C. The states were then ranked according to the average interest rate on savings, to find which states offered the best (and worst) dividends in the nation.

While Rhode Island is No. 1, on the other end of the spectrum falls Montana, with an average 0.11% APY on savings. Arizona offers the second-worst rates with a 0.12% APY average, and Connecticut has the third-worst average of 0.13% APY.

According to GoBankingRates, the savings and CD rates used in this study are current as of Feb. 28, 2013, based on institutions' online published rates and a deposit amount of $10,000.

See where your state ranks on GoBankingRates.

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