Dedicated to Deposits: Deals, Data, and Discussion

Bank Deals Weekly Summary for February 2, 2008

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Quick Link for Rates, Recap of this week's posts

After a 50 basis-point rate cut by the Fed, this was another week of large cuts in savings account and CD rates. The target federal funds rate has fallen 125 basis points to 3.00% in less than two weeks, and the banks didn't delay in cutting their rates.

Future Bank Rates?

There has been some interesting opinion articles at BestCashCow about future CD rates. One article describes how the credit crisis is going to force banks to attract more deposits. Banks aren't going to be able to sell their loans off in the form of securitized investments. Instead they're going to have to keep loans on their balance sheets. This will force banks to increase their deposits to support those loans. The author sees CD rates (especially for longer terms) being forced higher because of this.

Another article at BestCashCow also sees future opportunities in CD rates, but warns against going too long (over one year) due to inflation risks.

Few CDs With Yields Near 5%

Unfortunately, there are no more nationwide 5% short term CD deals that I'm aware of. However, there are some that are close. Countrywide Bank was one of the very few banks that actually raised rates. For their internet CD, the 3-month and 6-month terms have a yield of 4.90% APY. Even though Alliant Credit Union ended its 5.40% APY jumbo CDs, you still can get 4.90% APY for 12 to 17 month terms with a $25K minimum deposit. The nearest 12-month CD yield from a bank is 4.40% APY from Flagstar. So although it doesn't sound hot, if you compare what's available, it's actually still a hot deal (see post).

Another bank offering 4.90% APY is Sunshine Savings Bank in Florida. It's a special CD with a term of 13 months. When I last contacted this bank, I was told they do accept out-of-state deposits by mail. It's a small bank. So if the bank gets a lot of demand, this could change (see post).

If you want a 5% APY CD, the only ones available nationwide is at Pentagon Federal Credit Union. KeyDirect also has a 5% APY CD in some states for terms of 7 years and longer (5.05% APY for $50K+ balances). The only problem with these long term CDs is that there's a one-year early withdrawal penalty. As the BestCashCow article warns, this could be costly if inflation forces rates to jump in the next few years.

5-Percent-Plus Savings Accounts

There's now just one non-promo savings account that's 5% or higher. OneUnited Bank is the sole bank that has kept its online savings account yield unchanged since the first Fed rate cut last September. It remains at 5.30% APY for balances over $1,000. The account has several downsides such as interest being paid quarterly, a slow account opening process and ACH transfer restrictions (see post). But if there were no downsides, everybody would be jumping on this deal, and OneUnited would certainly have to lower the rate.

The problem with savings accounts is that their rates could change at any time. Few things are more frustrating than opening an account right before a major rate cut. That's one nice thing about promotions like what EverBank runs which guarantees a high intro rate for 3 months. Unfortunately, those promos are disappearing. EverBank still has its promo, but the intro rate fell again this week. It's now 4.51% APY. AmTrustDirect ended its 3-month promo for its e-Savings Account. The standard yield is 4.60% APY.

I did find a bank this week that still is offering a 5-percent-plus 3-month intro rate. It's GCF Bank, and it's offering 5.09% APY on its CyberSaver Account for 3 months. Like OneUnited, it has some downsides like quarterly posting of interest. But even with these issues, it's still a better deal than any nationally available 3-month CD.

Reward Checking Accounts

The reward checking accounts are still holding their yields better than the online savings accounts. However, banks have also been lowering these rates. First Arkansas Bank & Trust will be cutting the rate on its nationally available reward checking account from 6.06% to 4.44% APY starting next week. It will also be placing a cap of $50K that can earn the top yield (see post). There are still several banks and credit unions offering 6.01% APY on their reward checking accounts. Most have caps of $25K. I've updated my high reward checking account list below with accounts that have nationwide availability. Two still have a 6.01% APY.

Local CD Deals

You might notice that my local CD list below is much shorter than in the past. Seems like 80% of the posts I did this week were out-of-date as of today. Many banks and credit unions posted new rates for February that followed the big Fed rate cuts. I went through all of the posts since December and removed those that had dropped their rates. I only kept the banks and credit unions on the list which are still listing the high rates on their websites. Hopefully, their websites are up-to-date. Be sure to call to verify the rates before driving to the bank.

Savings and CD rates are dropping fast. So please check with the bank or credit union to make sure the deals that I've posted are still available. If they're not, please leave a comment.

Recap for the Week

Banking News

Savings Accounts - National

CD Deals - National

Checking/Savings Account Bonuses

Reward Checking Accounts

CD and Money Market Deals - Local

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 26th, Jan 19th, Jan 12th, Jan 5th, Dec 29th, Dec 22nd, Dec 15th, Dec 8th and Dec 1st.

Quick Links: Refer to the following links for the savings accounts and CDs that interest you: Liquid Account Rates: Savings Accounts, Special rates, Local checking/savings, Bank alternatives CD Rates: 3 Mo CDs, 6 Mo CDs, 9 Mo CDs, 12 Mo CDs, 18 Mo CDs, 24 Mo CDs, 36 Mo CDs, 48 Mo CDs, 60 Mo CDs, 84 Mo CDs, CDs by state Comments: read and discuss

As of February 2, 2008

Checking/Savings/Money Market Accounts:


3-Month Certificates of Deposit:

6-Month Certificates of Deposit:

9-Month Certificates of Deposit:

12-Month Certificates of Deposit:

18-Month Certificates of Deposit:

24-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 Yield Reward Checking Accounts - Open to All

Checking and Saving Accounts at Local Banks/Credit Unions

CD Specials at Local Credit Unions/Banks Over the Last Month


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


Historical Rates from the Federal Reserve (Federal funds, Treasury bills, CD's)

Related Posts

Comments
Comment #1 by Anonymous posted on
Anonymous
Thank you, Banking Guy. It's true returns are really down right now. I'm wondering if anyone here who participated in the Money One FCU deal, ten days (give or take) ago, has gone back to the well and successfully made the add-on deposit they promised we would be permitted to make. That's a 5.25% rate and looks very high from our vantage point today. Just wondering if they are honoring their promise to allow add-on deposits, especially large ones. Anybody had any luck?

1