Bank Deal Summary for Feb 4, 2006

Feb 4, 2006 - 5:54 PM by Ken Tumin

Looks like we have a battle of the banks going on. HSBC Direct came out with their Fat Savings Bonus which beats ING Direct's Winter Save Up Sale by 0.05% (4.80% APY vs. 4.75% APY). Unlike ING's promo, HSBC's 4.80% APY applies to all deposits, not just new deposits. I placed HSBC on top of the savings account list. There's never a guarantee with savings account rates. The only thing different between HSBC's rate and other rates is that HSBC has put an expectation that the rate is likely to fall after April 30th. I didn't put ING's 4.75% on top last week since it applied only to new money.

Now the question is how will the other online banks respond? Is EmigrantDirect hearing a giant sucking sound from people transfering money to ING or HSBC? I can understand some EmigrantDirect customers not wanting to transfer their money to ING since after the promo, ING's rates will almost surely be much less than what Emigrant will be offering. However, HSBC is another story. HSBC's yield has averaged higher than EmgirantDirect for the last several months. After Emigrant's disappointing 0.25% increase last month and their disappointing cash back credit card launch, HSBC may be looking very appealing. Another thing that makes HSBC appealing is that you can link your EmigrantDirect's savings account to your HSBC's savings account. This is not possible with ING Direct. The only problem with HSBC is their slow transfer system in which transfered money loses 2 to 4 days of interest during the transfer.

In addition to HSBC, several banks increased rates after the Fed fund rate increase. Corus Bank's money market APY went from 4.38% to 4.47%. Presidential Savings Account increased by 0.25% to 4.37% APY, and MyBankingDirect's money market APY increased from 4.10% to 4.30%. The Self-Help Credit Union's money market account also increased this week from 3.96% to 4.15% APY.

In addition to savings accounts, CD rates increased at many banks. GMAC Bank's 1-year CD now equals VirtualBank's 4.90% APY. ETrade's 6-month CD APY increased from 4.62% to 4.75% APY to match VirtualBank. ING Direct just made some small increases to its CDs today. Penfed didn't increase its CD rates, but it did keep the rates the same which should last through February. Their long-term CDs continue to be great deals.

The rates listed below are based on Annual Percentage Yield (APY). No minimum balances are required unless noted. MMA next to the rates indicate a money market account. Most MMAs have check writing and ATM cards. Online savings accounts usually lack both of these. Previous weekly summaries are available for Jan 28th, Jan 21st, Jan 14th, Jan 8th, Dec 31st and Dec 17th.

As of February 4, 2006

Savings/Money Market Accounts:

HSBC - 4.80%, offers checking, (rate history), my post ($25 bonus)
Corus Bank - 4.47% MMA (min $10K to open)
UmbrellaBank.com - 4.40% MMA (min $1K), offers checking, my post
Presidential - 4.37% (min $5K, only first $35K receives this rate), offers checking, my post
GMAC Bank - 4.30% MMA (min $500), offers checking, my post
CapitalOne/Costco - 4.30% MMA (min $5K, Costco members only, $50 deal for exec. members)
MyBankingDirect - 4.30% MMA (min $5K), my post
EmigrantDirect - 4.25%, my post, ($10 signup bonus), (rate history)
Western Financial Bank - 4.25% MMA, offers checking, my post
FirstFedDirect - 4.25% (closed to CA residents), my post
Self-Help Credit Union - 4.15% MMA (min $500), my post
CapitalOne - 4.00% (MMA has same rate, but with checks and ATM. $100 min.)
UFB Direct - 4.00% MMA, offers checking, my post
MetLife Bank - 4.00% MMA (min $5K), my post
ING Direct - 3.80%, my post (4.75% promo and $25 bonus), (rate history)
VirtualBank - 3.55% (min $100), offers checking, my post ($20 bonus)
NetBank - 3.52% MMA ($500 min), requires checking, my post ($175 deal)
ebank - 3.30% MMA ($1K min, rate for $10K-25K balance), offers checking