Dedicated to Deposits: Deals, Data, and Discussion

Bank Deals Weekly Summary for January 20, 2007

POSTED ON BY

There's a saying with TV when a show starts going downhill that it has jumped the shark. Well, this week E-LOAN may have jumped the shark with the rate drop on its savings account. The yield dropped from 5.38% to 5.25% APY. This drop is significant because it takes them out of the top spot. The rate is still very competitive, but will it signal a trend in which E-LOAN never again challenges the rate leaders? Will E-LOAN become another ING Direct? For more info on E-LOAN and a discussion of other alternatives, please refer my new E-LOAN post.

Even though rates dropped at E-LOAN this week, there seemed to be more rate hikes on savings accounts and CDs than rate drops. Capital One increased the yield on its High Yield Money Market Account and its Costco version of this account by 20 basis points. Costco MMA is now at 5.20% APY and the HYMMA is now 5.00% APY (see my new Cap One Money Market post). Discover Bank increased the yield on its money market account from 5.05% to 5.14% APY. Corus Bank also increased the yield on its money market account from 5.05% to 5.10% APY. Since Corus Bank's MMA is indexed to the 91-day T-Bills, this is even more an indication of a changing interest rate environment.

Banks that raised their CD rates this week include UFB Direct, IndyMac, Netbank, AmTrustDirect, GMAC Bank and ETrade Bank. Many of these increases were in the longer term maturities. Netbank CD rates have been steadily climbing over the last month. All of the short-term CDs have a yield of 5.35% APY and the CDs with terms of 3 years and up have a yield of 5.30% APY. If you're not already a Netbank customer, you can obtain an effective yield over 6% on a 12-month term with a $15K deposit through Netbank's $100 bonus promotion which is still available.

Even with the CD rate increases, no one is coming close to Penfed's 6.25% CDs (at least those with national availability). These are scheduled to continue until the end of January. In the past, these high yield CDs have continued for several months into the new year. I have a feeling this might not be the case this time. The last two years, the Fed had been hiking rates so locking into a long-term CD wasn't too appealing. We may now be at the peak of this rate cycle, so locking into a long-term CD makes more sense (although many question if we've really reached the peak). In addition, these CDs are getting much more exposure with the internet. Consequently, Penfed may fill their deposit needs very quickly this year and end this promotion early. So if you want to join in on the 6.25% CD, you may want to act before the end of the month. Please refer to my 6.25% CD Penfed post for more info.

For those not convinced we're at a rate cycle peak or those who just can't tie up their money for muliple years, you can still get a 6% APY 4-month CD at Huron River Area Credit Union (see post). It's hard to find rates of 6% for CD terms between 4 months and 3 years. World Savings came out this week with a new internet CD special with a 10-month term and a yield of 5.45% APY (see my World Savings CD post). Patelco Credit Union still has its 5.64% APY CDs with terms of 12 to 23 months. Note, Patelco is privately insured by the ASI and not federally insured by the NCUA (see my Patelco CD post). An alternative to Patelco is Kinecta Federal Credit Union which is NCUA insured and is offering a promotional 5.55% APY 15-month CD. Like Patelco, this is open to all via memberhip into a non-profit organization (see post.)

One of the best local deals that I posted on this week is in the Phoenix area. AmTrust's new Ahwatukee branch is offering a 6% APY on its money market account guaranteed for 6 months with balances of at least $50K. This promotion is scheduled to last through February 3rd (see my 6% Money Market AmTrust Post).

For more local deals, please refer to the local CD list. I've reviewed many of them and removed those no longer available. However, I can't go through all of them. Please check with the bank or credit union's website to confirm availability. If you find any that are out-of-date, a comment would be appreciated.

Thanks to all who have helped by leaving comments or sending emails on rate updates. Sorry I can't post on all of your suggestions.

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. The top lists include banks and credit unions with broad availability and with minimums around $10K or less. Previous weekly summaries are available for Jan 13th, Jan 6th, Dec 30th, Dec 23rd (short version), Dec 16th, Dec 9th, Dec 2nd and Nov 25th.

As of January 20, 2007

Savings Accounts/Money Market Accounts:

3-Month Certificates of Deposit:

6-Month Certificates of Deposit:

9-Month Certificates of Deposit:

12-Month Certificates of Deposit:

14/15-Month Certificates of Deposit:

18-Month Certificates of Deposit:

36-Month Certificate of Deposit:

48-Month Certificate of Deposit:

60-Month Certificate of Deposit:

84-Month Certificate of Deposit:

High Rates with Conditions / Large Balances - Open to All

Checking and Saving Accounts at Local Banks/Credit Unions

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

Terms of 60 Months and Over

Terms of 24 Months to Under 60 Months

Terms of 12 Months to Under 24 Months

Terms of Under 12 Months

Bank Account Alternatives


Comments
Comment #1 by SVG (anonymous) posted on
SVG
It is no surprise at all that the finnancial institutes have started raising the longer-term yields.

At present the yield curve is inverted rather sharply. The result of (10 Year T. Bond Yield - 90 Day T Note Yield) is negative.

Generally such a condition is a precursor to rise in longer-term yields and/or fall in the shorter-term rates.

- SVG

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Comment #2 by PaulH (anonymous) posted on
PaulH
You forgot to include the highest bank CD rate for one year.
Alpha Bank of Georgia is offering a 1-year CD rate of 5.75% APY.

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Comment #3 by Banking Guy (anonymous) posted on
Banking Guy
It's included under the local-deals list (both for the 5.75% short-term CD and the 5.65% long-term CD). I think they no longer accept out-of-state deposits.

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Comment #4 by Anonymous posted on
Anonymous
How come you don't cover Tax Exempt deals?

1