Bank Deal Summary for May 6, 2006

The Treasury started the week off by disappointing savers when they announced the new I Bond rates on Monday. Based on inflation numbers released last month, the inflation component was expected to be only 1%. There was hope for a big bump-up in the fixed rate. The Treasury did make a bump-up in the fixed rate from 1% to 1.4%, but it wasn't enough to make I Bonds attractive. The composite rate is only 2.41%. You're better off waiting for next November. Perhaps we'll get both a higher inflation and fixed rate component.

Thanks to World Savings, the week ended on an positive note for savers. World came out with another one of their secret branch-only CD specials. The new CD APY is 5.51% and you can pick terms between 7 to 11 months.

The best online 6-month CD deal is at ETrade Bank which started offering a 5.21% APY 6-month CD. World Savings still has their very competitive 5-month internet CD with an APY of 5.16%.

A small internet bank, interState Net Bank, became the first to offer a 5% money market account with a balance requirement of $10K (see post). With the Fed meeting this Tuesday and Wednesday, we may see more 5% savings and money market rates as the Fed is widely expected to hike the funds rate to 5%.

The Fed funds rate is only one factor in determining savings rates. In this post I discuss a New Times article which provides some insights into strategies of online banks like HSBC and Citibank in deciding what rates they'll offer on their high yield savings accounts. When banks introduce a new online savings account, they will often have high rates to lure in new customers and deposits. But once they've succeeded in acquiring those deposits, they feel they can slack off on the rates. We've seen this pattern in ING Direct, Emigrant Direct and HSBC. Fortunately, new competitors will put pressure on these banks. Although Amboy is not new, they've started a new no-minimum online savings account, and they are in the phase of attracting new customers with an APY of 4.75%. Refer to this post for more info on this new savings account.

With an APY the same as GMAC Bank, AmboyDirect is a good alternative to GMAC for those who don't want GMAC's $500 minimum. But GMAC Bank's money market account has many nice attributes. For a detailed review of this account along with my personal experiences in opening this account, refer to this post.

Thanks to all who have helped by leaving comments or sending emails on rate updates. Sorry I can't include all of the best rates in this summary.

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 Apr 29th, Apr 22nd, Apr 15th, Apr 8th, Apr 1st, Mar 25th and Mar 18th.

As of May 6, 2006

Savings/Money Market Accounts:

• interState Net Bank - 5.00% MMA (min $10K for APY/$2.5K to avoid fee), my post
• Corus Bank - 4.79% MMA (min $10K to open)
• AmboyDirect - 4.75%, my post
• GMAC Bank - 4.75% MMA (min $500), my post
• Presidential - 4.75% (min $5K, only first $35K receives this rate), offers checking, my post
• BankUnited - 4.75% (min $5K), my post
• Heritage Bank Online - 4.72% (min $1K), my post
• Zions Bank - 4.71% (min $1K)
• American Partners Bank - 4.71% MMA (min $1K), my post
• UmbrellaBank.com - 4.70% MMA (min $1K), offers checking, my post
• Western Financial Bank - 4.60% MMA, offers checking, my post
• VirtualBank - 4.60% (min $100), offers checking, my post ($20 bonus)
• CapitalOne/Costco - 4.60% MMA (min $5K, Costco members only, $25 deal for exec. members)
• FirstFedDirect - 4.57% (min $1K) (closed to CA residents), my post
• CapitalOne - 4.55% (MMA has same rate, but with checks and ATM. $100 min.), my post
• MyBankingDirect - 4.55% MMA (min $5K), my post
• HSBC Direct - 4.50%, offers checking, (rate history), my post
• EmigrantDirect - 4.50%, my post, ($10 signup bonus), (rate history)
• Citibank - 4.50%, requires checking account, my post
• Transportation Alliance Bank - 4.50% MMA (min $25), my post
• UFB Direct - 4.40%, offers checking, my post
• Self-Help Credit Union - 4.37% MMA (min $500), my post
• MetLife Bank - 4.25% MMA (min $5K), my post ($50 bonus)
• ING Direct - 4.15%, my post ($25 bonus), (rate history)
• NetBank - 3.52% MMA ($500 min), requires checking, my post ($175 deal)
• ebank - 3.50% MMA ($1K min, rate for $10K-25K balance), offers checking
• ETrade Bank - 3.00% (min $1K to avoid fees/$5K for APY), my post (4.75%/$50 bonus)

6-Month Certificates of Deposit:

• World Savings - 5.51% (7 months) (min $10K), branch only, new funds only, my post
• ETrade Bank - 5.21% (min $1K), my post
• Corus Bank - 5.18% (min $10K)
• World Savings - 5.16% (5 months) (min $10K), new funds only, my post
• AmTrustDirect - 5.15% (min $1K) my post
• Meadows Credit Union - 5.12% ($1K min), new funds only, my post
• FirstFedDirect - 5.12% (min $10K), my post
• GMAC Bank - 5.10% (min $500)
• UFB Direct - 5.10% (min $8K)
• UmbrellaBank.com - 5.05% (min $1K)
• VirtualBank - 5.00% (min $10K), my post ($20 bonus)
• NetBank - 4.80% (min $1K)
• ING Direct - 4.75%, my post
• Transportation Alliance Bank - 4.65% ($1K min)
• Self-Help Credit Union - 4.63% (min $500), my post
• Western Financial Bank - 4.50% ($100 min)
• ebank - 4.50% (min $1K), 4.75% for ePremium checking customers
• MetLife Bank - 4.50% ($1K min)

12-Month Certificates of Deposit:

• World Savings - 5.51% (11 months) (min $10K), branch only, new funds only, my post
• GTE FCU - 5.38% (min $500) my post
• Mutual Bank - 5.35% (min $2.5K) my post
• Melrose CU - 5.35% (min $5K) my post
• Corus Bank - 5.33% (min $10K)
• GMAC Bank - 5.30% (min $500)
• AmTrustDirect - 5.30% (min $1K) my post
• ETrade Bank - 5.30% (min $1K), my post
• FirstFedDirect - 5.27%, (min $10K) my post
• ING Direct - 5.25%, my post
• Western Financial Bank - 5.25% ($100 min) (13-month)
• UmbrellaBank.com - 5.25% (min $1K)
• BankUnited - 5.25% (min $5K), my post
• NetBank - 5.20% (min $1K), my post ($25 bonus)
• UFB Direct - 5.20% (min $8K)
• VirtualBank - 5.20% (min $10K), my post ($20 bonus)
• Transportation Alliance Bank - 5.15% ($1K min)
• American Partners Bank - 5.07% (min $1K), my post
• MetLife Bank - 5.05% ($1K min)
• Self-Help Credit Union - 5.04% (min $500), my post
• ebank - 4.75% (min $1K), 5.00% for ePremium checking customers

18-Month Certificates of Deposit:

• Mutual Bank - 5.40% (min $5K) my post
• GMAC Bank - 5.30% (min $500)
• CapitalOne/Costco - 5.22% (min $5K, Costco members only)
• American Partners Bank - 5.18% (min $1K), my post

36-Month Certificate of Deposit:

• Pentagon Federal CU - 6.00% (min $1K), my post
• Melrose CU - 5.56% (min $5K) my post
• GMAC Bank - 5.35% (min $500)
• Transportation Alliance Bank - 5.34% ($1K min)
• Self-Help Credit Union - 5.27% (min $500), my post

48-Month Certificate of Deposit:

• USA FCU - 6.01% (min $1K) my post
• Pentagon Federal CU - 6.00% (min $1K), my post
• Melrose CU - 5.67% (min $5K) my post
• Transportation Alliance Bank - 5.36% ($1K min)
• GMAC Bank - 5.35% (min $500)
• Self-Help Credit Union - 5.31% (min $500), my post

60-Month Certificate of Deposit:

• Pentagon Federal CU - 6.00% (min $1K), my post
• Melrose CU - 5.77% (min $5K) my post
• Transportation Alliance Bank - 5.39% ($1K min)
• GMAC Bank - 5.35% (min $500)
• Self-Help Credit Union - 5.35% (min $500), my post

84-Month Certificate of Deposit:

• Pentagon Federal CU - 5.95% (min $1K), my post

High Rates with Conditions - Open to All

• 10% Savings Account for kids ($500 max)
• 5.51% 3-month intro rate on checking account
• 5.00% Money Market with $100K min
• 5.00% Money Market with $100K min

Checking and Saving Accounts at Local Credit Unions

• 5.00% no-minimum savings account (New York)
• 5.00% savings account (Pennsylvania)
• 5.00% Money Market Account (New York)
• 4.50% checking account promo (Oklahoma)

CD Specials at Local Credit Unions/Banks Over the Last Two Months

Terms of 60 Months and Over

• 6.25% 60-Month CD at a Carolina CU (Variable)
• 6.14% 60-Month CD at a Virginia CU
• 6.00% 61-Month CD at a Michigan (CU Open to All)
• 5.64% 60-Month CD at a South Carolina/Georgia CU

Terms of 24 Months to Under 60 Months

• 6.01% 48-Month CD at a California CU (Open to All)
• 6.00% 59-Month CD at a Missouri CU
• 6.00% 24-Month CD at a California CU (Variable)
• 5.87% 30-Month CD at a Wisconsin CU
• 5.75% 41-Month CD at a Missouri CU
• 5.75% 27-Month CD at a Florida CU
• 5.61% 24-Month CD at a Chicago Bank
• 5.60% 24-Month CD at a Georgia Bank
• 5.55% 24-Month CD at a Ohio CU
• 5.50% 35-Month CD at a Oklahoma Bank
• 5.50% 49-Month CD at a Georgia Bank
• 5.45% 36-Month CD at a Los Angeles CU
• 5.39% 24-Month CD at a California/Texas CU
• 5.35% 48-Month CD at a Texas CU

Terms of 12 Months to Under 24 Months

• 10.00% 12-Month CD at a Dallas Bank ($5K max)
• 8.00% 12-Month CD at a NJ/NY/PA CU ($2K max)
• 5.90% 18-Month CD at a Houston CU ($90K min)
• 5.55% 12-Month CD at a Georgia Bank
• 5.54% 13-Month CD at a California CU
• 5.50% 12-Month CD at a Virginia CU
• 5.50% 13-Month CD at a Massachusetts Bank
• 5.50% 20-Month CD at a Illinois CU (Open To All)
• 5.50% 12-Month CD at a New York/California Bank
• 5.50% 12-Month CD at a Georgia Bank
• 5.48% 18-Month CD at a Florida Bank
• 5.48% 18-Month CD at a Florida Bank
• 5.41% 13-Month CD at a Washington DC CU
• 5.40% 12-Month CD at a New York Bank
• 5.40% 12-Month CD at a Nebraska CU
• 5.40% 12-Month CD at a Chicago Bank
• 5.38% 15-Month CD at a Maine CU
• 5.38% 12-Month CD at a CU Open to All
• 5.35% 13-Month CD at a Ohio CU
• 5.35% 15-Month CD at a Florida Bank
• 5.35% 12-Month CD at a Missouri Bank
• 5.30% 13-Month CD at a Georgia Bank
• 5.30% 13-Month CD at a Pennsylvania Bank
• 5.30% 19-Month CD at a Florida CU
• 5.30% 15-Month CD at a Florida Bank
• 5.27% 15-Month CD at a Kentucky Bank
• 5.25% 18-Month CD at a Florida Bank
• 5.25% 20-Month CD at a Pennsylvania Bank
• 5.25% 13-Month CD at a Florida CU
• 5.17% 12-Month CD at a Texas CU
• 5.15% 12-Month CD at a Pennsylvania Bank

Terms of Under 12 Months

• 8.00% 8-Month CD at a California CU ($5K Max)
• 6.00% 6-Month CD at a South Carolina Bank
• 5.55% 11-Month CD at a Georgia Bank
• 5.50% 9-Month CD at a Georgia Bank
• 5.50% 10-Month CD at a California CU
• 5.45% 9-Month CD at a California Bank
• 5.38% 9-Month CD at a CU Open To All
• 5.38% 11-Month CD at a Arizona CU
• 5.35% 10-Month CD at a Tennessee CU
• 5.33% 9-Month CD at a North Dakota Bank
• 5.25% 11-Month CD at a Michigan CU
• 5.25% 10-Month CD at a Massachusetts Bank
• 5.25% 7-Month CD at a Florida CU
• 5.25% 11-Month CD at a Wisconsin CU
• 5.25% 7-Month CD at a Georgia Bank
• 5.22% 6-Month CD at a California CU
• 5.20% 10-Month CD at LaSalle Bank
• 5.20% 9-Month CD at a Nebraska CU
• 5.15% 7-Month CD at a Georgia Bank
• 5.12% 7-Month CD at a Wisconsin CU
• 5.00% 9-Month CD at a Wisconsin Bank

CD Alternatives

• Money Magazine article on risk-free investments
• FW Thread on Treasury Bills
• I Bond Rate Starting May 2006, I Bond Article, I Bonds as CD Alternatives
• SmartMoney Brokerage Survey