Dedicated to Deposits: Deals, Data, and Discussion

Rates are Falling - ING Direct, E-LOAN... Where to Lock in a High Rate?


ING Direct responded quickly to yesterday's rate cut by the Feds. The Orange Savings Account yield dropped from 4.50% to 4.30% APY, the low tier rate of the Electric Orange Checking dropped from 4.00% to 3.50% APY, and all of the Orange CD rates fell below 5% APY. When the Fed was hiking rates from 2004 to 2006, ING Direct was never this fast to respond.

Emigrant Direct's savings account rate is holding at 5.05% APY, but their My Way CD rates have fallen from 5.10% to 4.55% APY. Like ED, E-LOAN's savings account rate hasn't changed (still at 5.25% APY), but their CD rates have fallen. The 3-month CD yield fell from 5.55% to 5.35% APY. The 5-year yield fell from 5.55% to 5.30% APY. The yields on CD terms from 2 to 4 years fell from 5.41% to 5.20% APY.

There are still some opportunities to lock in a high rate. Even though Indymac's 5.75% APY 4-month internet CD special is now only listed at 5.00% APY, Indymac is still listing 5.70% APY on its Internet Custom Term CDs with terms of 5 and 6 months (see my latest Indymac CD post). Countrywide Bank still has its national offer of 5.65% APY for a 12-month CD and 5.75% APY for those in California (see my latest Countrywide CD post). Please see my latest weekly summary for more CD options, and please make sure to check the bank's website for the latest rates since rates are changing fast.


Comment #1 by Anonymous posted on
I'm somewhat irked at ING for dropping their rates, especially this fast. They've been one of the lowest-paying online savings accounts on the 'net over the past year, yet they still lowered their rates! They do have good customer service (which is why I've stayed with them), but still... c'mon ING, good service is only worth so much. I was really hoping they would have left it at 4.5%.

Comment #2 by Metroplexual (anonymous) posted on
I am starting to thing a US savings account may be the wrong place to keep my money. Where can I open a british or japanese account to get out of dollars and that will convert my dollars cheaply?

Comment #3 by pfuckup (anonymous) posted on
It look slike WAMU's online savings held at 5%.

Comment #4 by Anonymous posted on
Bank of Internet USA still has high CD rates that are unchanged as of this writing, (and these rates were high even before the fed cut.) GMAC still has a 5.15% one year CD that is still available. By tomorrow, these may be gone. Don't wait!!!

Comment #5 by Viv (anonymous) posted on
HSBC savings online still has a rate of 5.05$%. ING CDs have dropped to 4.90%. The Texas Equity Bank in Dallas has 5.35% 7m cd minimum opening deposit of 1k. Down from 5.60%. I waited too long before submitting in my application. /Groan.

Comment #6 by djc314 (anonymous) posted on
Metroplexual said...
I am starting to think a US savings account may be the wrong place to keep my money. Where can I open a british or japanese account to get out of dollars and that will convert my dollars cheaply?

I am not making a recomendation but if you are looking for rates outside of usa try Ever Bank in usa, of course no outside of usa banks are insured by fdic...also if you have never used them they do offer 2 USA 6% accounts (savings and checking) that they will pay for 3 months and then drops to the 5% range.

Comment #7 by SVG (anonymous) posted on

>>Where can I open a british or japanese account to get out of dollars and that will convert my dollars cheaply?<<

It is not necessary to have a Brit or Japanese account to buy Pounds or Yens.

Trading of Pounds / Yens can be done using a regular brokerage account in US and trading CurrencyShares. Check FXB an FXY for Pounds and Yens respectively.

Personally I prefer trading FMX (Mexican Peso).


Comment #8 by Pat (anonymous) posted on
You said, "When the Fed was hiking rates from 2004 to 2006, ING Direct was never this fast to respond". That really annoyed me, moved everything out of there to my Fidelity money market. Don't know why I didn't move before but that's the last straw with them.

Comment #9 by Anonymous posted on
Metroplexual, currency speculation is quite risky so be careful. It's just about the opposite end of the spectrum from FDIC insure money market safety. And you are "starting to think" that it is time to do this, but in reality the smart money left dollars back in 2002, so it may be too late now, that horse has left the barn.

Comment #10 by Anonymous posted on
It will be interesting to see what FNBO does after their 6% savings ends on September 28th. I think there's a chance they will still keep it higher than anyone else - in part to make amends and return customers - after their big email fiasco.

Comment #11 by Anonymous posted on
I was also rather annoyed this morning with ING. It looks like they couldn't wait to drop their rate. Leaves a rather bitter taste.

At what point is ease of use erased by a less-than-competitive rate?

As for FNBO, I wouldn't count on them factoring a need for amends into their new rate. My bet would be no more than 5%.

Comment #12 by Banking Guy (anonymous) posted on
Banking Guy
About FNBO Direct, they were at 5.25% before the promo which was very competitive so hopefully they will realize that it's extra important for them to remain competitive if they want to keep the remaining customers who've decided to stick with them after the employment history and email issues.

About foreign currency accounts, you might want to consider EverBank's accounts. Please see my EverBank post for more info.

Comment #13 by Anonymous posted on
I'm also a little ticked off at ING. I think Apple Bank's Grand Yield Direct held their rates. I might switch everything over.

Comment #14 by Dalosony (anonymous) posted on
Their special Internet 4 Month CD yield went back up to 5.75% APY from 5.00% APY.

Comment #15 by Cyclone (anonymous) posted on
I lot of the people I know have been taking advantage of Wachovia's 5.25 12-mo, World's 5.41 5-mo, and BoA's 5.35-5.45 4-mo. Wachovia's and World's being especially busy (I stopped by both offices today and they were packed) b/c they will issue them right away. BoA can do them right away in the branch, but the 3 locations I frequent always make me wait more than an hour to do something like that (I once waited an hour and a half just to send a wire). These and the other high ones like IndyMac's must be very, very popular these days.

Comment #16 by Anonymous posted on
E-Loan lowered their rate to 5%

Comment #17 by Harsh (anonymous) posted on
You can lock in a rate of 5.25 APY for 6 months at Flushing Savings Bank . Bank branches are located througout New York. I have taken advantage of this offer before, and there is a 6 month account life requirement.
It's a great rate, along with 4% checking account.

Comment #18 by uglyowl (anonymous) posted on
It is only a matter of time (probably within the next week or two) that Emigrant and everyone starts dropping quite a bit.

Most banks (except ING I guess) don't want to be the first (having people jump ship) so they will eat a loss for a very short period of time. That being said I would think most at ING are not that rate sensitive since they have been below market for awhile, so what's another 20 basis points.

And yes banks have less of a lag (if at all) for rate drops, but a large lag for increases. All about the bottom line.

Comment #19 by Anonymous posted on
I watched the CEO of ING on Nightline the other night. He seemed like the kind of guy I could respect and like. He talked about the importance of savings and how more Americans need to save more and spend less. The next day, he is the first to cut rates and short change his depositors while improving his bottom line. I guess we know what was really important...

Comment #20 by Anonymous posted on
AmTrust Direct lowered their e-Money Market rate to 5.21% from 5.31% overnight. Also, Apple Bank lowered the rate on their Grand Yield Direct account yesterday from 5.27% to 5.15%.

Comment #21 by Anonymous posted on
GMAC Bank lowered their rate from 5.3% to 4.9%

Comment #22 by FormerlyOrange (anonymous) posted on
Did ING lose everyone's email address? When they were raising rates, they were very quick to send out an email saying so. I haven't yet received my "We just lowered your rate so you'll be earning less" email yet, and others I've talked haven't seen anything either. Perhaps ING's email system is temporarily down and their technicians have been too busy resetting rates to fix it?