Dedicated to Deposits: Deals, Data, and Discussion

The Ten Best Bank Deals for Savers in 2007

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I thought it would be fun to make my own best-of-2007 list. Looking back at the best bank deals of 2007 may also be somewhat useful. Most of these deals have long ended, but banks often repeat similar deals in the future. Also, for those who participated in these deals, we can share what we learned to see if the deals really were worthwhile. Sometimes the extra work or hassles they required negated much of the benefits.

I'm sure some of you might have different opinions on what you considered as the best. I've probably forgotten some of them. Feel free to comment on your opinions. You can find a full list of my 2007 posts here. Some of my criteria for the best deals included: 1) very high interest rate or large bonus, 2) nationwide availability, 3) easy application process, 4) little or no hoops to jump through. Those with large savings would probably have different opinions than those with smaller balances. If you only have $5K to put into an account, you'll probably like a $250 bonus more than a 7% yield.

1) Pentagon Federal Credit Union's 6.25% CDs - PenFed started 2007 with these very high rates on certificates with terms from 3 to 7 years. Some thought the 3 years were too long a term to lock in your money. But with today's rate environment, 3 years doesn't seem too bad. I considered this deal as #1 not only because of the high yield but also because of the easy membership and the easy online account opening process. It looks like we won't be seeing similar deals at PenFed in 2008. The highest yield CD now is only 5.25% APY for a 7-year term.

2) FNBO Direct's 6% online savings account promotion - FNBO Direct launched this promo on May 1st and kept it going as they advertised until the end of September. Their online savings account remains one of the most competitive no-minimum savings accounts. I know many people had problems with their intrusive email requests and the account had some issues like slow ACH transfers. But their high yield (during and after the promo) combined with decent online savings account features earned them this #2 spot (post).

3) State Bank of Toledo's 6.01% reward checking account - High yield reward checking accounts took off in 2007, and State Bank of Toledo offered the best deal for this type of account. It had a very high yield, no balance cap and it was offered nationwide. The rate has recently been lowered to 5.01% and a cap of $70K has been added, but considering the rate environment, these changes were reasonable and the 6.01% APY did last for over 6 months. It's still not known if these reward checking accounts can maintain rates above the best online savings accounts. Banks continue to launch new reward checking accounts. I just reported on a new one with no balance cap and nationwide availability at this post.

4) Agriculture Federal Credit Union's 6% 10-month CD - This CD special only lasted 5 days, but the high rate, easy eligibility and the easy online application made this a top deal. They also had some good CD deals in 2006 so maybe we'll see more in 2008.

5) Justice Federal Credit Union's 6.25% 2-year CD - The main reason I listed this CD special below PenFed and AFCU is that qualifying for membership and applying for the CD weren't as easy.

6) UmbrellaBank's 5.50% money market promotion - The 5.50% promo was started in late April and was guaranteed to last through 2007. After 2 days, the terms changed and it was only guaranteed to last through July. For those who applied before the change, they were able to get the long rate lock. UmbrellaBank's money market standard rate remains competitive with a 5% APY. They also had a 6% 3-month promotion on its Green Day Savings Account. The current rate of this promo is 5.50% APY.

7) EverBank's 6.01% 3-month promotion on its checking and money market accounts - The shorter term and the $100K/$50K balance caps made this deal less desirable than the above savings account promotions. Also, EverBank has several other issues. The new promo rate is 5.51% APY (see post).

8) HSBC Direct's 6% online savings account promotion - This promo started at the end of January and lasted until the end of April. The shorter term and the new-money requirement made this less of a deal than FNBO Direct's promo. I put this under EverBank's deal since for most people it was less than 3 months. HSBC Direct was much better for those with large savings.

9) Bank of America's rewards credit card $250 bonus - This promo was one of the best credit card bonuses of the year. Like many of these bonuses, some people have had trouble receiving the bonus, but as this SD thread indicates, many have been successful.

10) Citibank's $200 checking account bonus - This one appears to be still available. There are some hoops to jump through and Citibank accounts have issues. Plus, several readers have had problems with Citibank bonuses. But I've received my $200 from an older promotion (after some emails) and others have had success.

Honorable Mention:

SECU Credit Union's 9%+ 7-month CD promotion - Most of the time you see a bank or credit union advertising a very high yield for a CD, there's almost always a low deposit cap. A 10% CD may sound great, but if you can only put in $1K, you won't earn much especially if it has a short term. This SECU CD had a very high $200K cap. It actually was a 5% CD with an immediate 2.50% bonus. Qualifying for membership wasn't easy for those outside of Maryland so I didn't include it in the top ten. Also, it ended very quickly since the deal was so good. Some other similar 2007 local CD deals that allowed large balances included an 8% 108 day CD at an Idaho CU (see post) and a 7.79% 5-month CD at an Oregon CU (see post).

Important News of 2007

The subprime mess and the credit crunch caused problems at many financial institutions in 2007. Countrywide made headlines in August with its problems. It was good news for depositors. Since August, Countrywide Bank has offered very high yields on its savings account and short term CDs (see post).

NetBank became the first major bank to go under from the subprime mess (see post). We may see many more banks go under in 2008. We also saw several credit unions be placed into conservatorship under the NCUA. Huron River Area Credit Union (which had offered 6% CDs and provided easy membership) was placed into conservatorship in February. The conservatorship was an attempt to save the credit union, but it failed. The credit union was liquidated in November (see post).

With the mortgage and credit problems threatening the health of the economy, the fed lowered rates three times in the last 4 months of 2007 lowering the target federal funds rate from 5.25% to 4.25%.

We're ending the year seeing the effects of these fed rate cuts with lower CD and savings account rates. So I'm afraid we'll see far fewer 6-percent-plus savings account and CD deals in 2008. But I'm confident we'll see more good deals.

Happy New Year!


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Comments
9 Comments.
Comment #1 by Anonymous posted on
Anonymous
Banking Guy

Love the list and agree with you.

Thanks for all you do and for bringing us all the great info day after day. I log in everyday to see what you have found. I love your site.

Happy New Year Everyone!!!

1
Comment #2 by ThursdaysChild (anonymous) posted on
ThursdaysChild
Happy New Year, and thank you for all your hard work.

1
Comment #3 by Anonymous posted on
Anonymous
Great list. As a regular reader, I'm happy to have taken advantage of many of the deals listed. Thanks, Banking Guy, keep up the good work, and Happy New Year!!

1
Comment #4 by uRL (anonymous) posted on
uRL
It was an exciting year for savers and there was a long list of financial institutions where you could put your money. In the last year I had accounts with Emigrant, HSBC, GMAC, SavingsSquare, ING, and E-Trade. After the dust settled and with the help of Banking Guy and his excellent blog I have three banks that I have savings with now. I decided to keep E-Trade, ING and SavingsSquare. I closed all the others.

Thank You Banking Guy

Happy New Year!

1
Comment #5 by Anonymous posted on
Anonymous
Happy New Year Banking Guy and thanks for your great work! Most of my top picks were on your list, but not in the same order. Great stuff!

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Comment #6 by Anonymous posted on
Anonymous
Happy New Year Banking Guy!

Thanks for all your help this year and hopefully the next will be another productive one.

Any personal finance resolutions for the next year? haha

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Comment #7 by glxpass (anonymous) posted on
glxpass
Moved the below comment from a less appropriate entry to this one:

Not a deal, but a thank-you for all your great posts. I've reported a number of them over on FatWallet Finance, crediting your blog, of course.

Thanks for the great service you perform here, and best wishes for a Happy New Year.

- glxpass

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Comment #8 by Anonymous posted on
Anonymous
Remember Banking Guy Has A TIP JAR

Click it

1
Comment #9 by unimax (anonymous) posted on
unimax
Man... you are doing a great job. Wish you a great new year ahead.

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