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More Savings Account Rate Cuts

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It appears several online banks have decided to ease into lower rates rather than doing one major slash. With it being so easy for customers to transfer money, that's probably not a bad strategy for the banks. As a commenter mentioned in my post on OneUnited's first rate cut, that's probably why we only saw a 15-basis-point cut at OneUnited on Monday.

Here are a few of the rate cuts that banks have made to their online savings accounts in the last two days:

After yesterday's ISM report, it's beginning to look like we're in a recession. Thus, the chances of additional Fed rate cuts are growing. The next Fed meeting is on March 18th, and the fed funds futures have a 28% chance of a half-point cut and a 30% chance that there'll be an unscheduled fed meeting this month with a quarter-point cut.

  Tags: savings account

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16 Comments.
Comment #1 by Anonymous posted on
Anonymous
Yesterday, I was getting 3.5% APY on my Wachovia Bank Super Yield Money Market Account. Today I am getting 2.75% APY. Sad. I am going to take my money away from Wachovia now.

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Comment #2 by Anonymous posted on
Anonymous
I called Wachovia (Orange County, CA branch) and told them I was going to take my money out. They offered me a 90-day special High Yield checking account. 4%APY locked in for 90 days (after which rate drops back to horrible lows). I have to give them $10K of new money and open up a free checking account with $100 minimum.

After 90 days, they are telling me there will probably continue to be specials since Wachovia is trying to hold onto as much money as possible.

I don't know whether to do this with Wachovia or switch to Independence Bank of Newport Beach, which is offering 4.10%APY (not locked at all, which means rate can and will drop...they dropped from 4.3% APY to 4.1% APY this week).

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Comment #3 by Anonymous posted on
Anonymous
I have had a brokerage account with schwab for many years. When they came along with the checking account which I tie in with my brokerage it was great. Rate at that time was 4.25%. It is still a great checking account [almost no fee's] but the interest rate went to 3.01 today. For someone with a few 100 dollars there that is not bad but I was using it as my main account for moving money between different brokerage accounts and between banks. As a result at times I have several 1000 dollars there and 3.01% just does not cut it. I will keep the account but move the money to someplace else. I guess all good things come to an end. Very disappointed with schwab.

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Comment #4 by Anonymous posted on
Anonymous
Which is the best bank to use for checking and savings in NYC Metro?

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Comment #5 by Cyclone (anonymous) posted on
Cyclone
Wachovia will regularly offer HPMM promos that the condition of adding $10k of new funds. The money need not stay there if you do not want it to, but it comes in handy as the rate is guaranteed during that time. I am getting 5% guaranteed until April 1st.

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Comment #6 by Anonymous posted on
Anonymous
Yes, Cyclone. You are correct. But watch out. Come the end of the locked in rate, the rate will fall to 1% to 2%. Just awful.

I was told at Wachovia today that they might eventually change to what they will call "Retention Promotions," where one won't need to add the $10,000 to get the rate. Of course, the promotion rate will continue to fall. You luckily got 5%. I only got 4% today. Come April or May, the promotion rate might be down to 3%.

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Comment #7 by Bozo (anonymous) posted on
Bozo
I've moved almost $200,000 out of Wachovia since the World Savings take-over. Not once did the teller (or the supervisor) bat an eye, nor offer to meet a higher rate or longer term.

Folks, it's a cruel world out there, and we're on our own.

Even Patelco refuses to meet competing rates, although the CSR assured me they "try to stay competitive" (this from an e-mail today).

I guess the days of free toasters are, well, toast.

Yours,

Bozo

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Comment #8 by Thursdays Child (anonymous) posted on
Thursdays Child
CapitalOne Costco is down to 3.70% APY as of 2/6/08 -- the 4th drop this year.

Bozo - if you want a free toaster, try Banco Popular! (Although it might be crockpots now -- oh, wait, I think I saw shredders on the freebie shelf.)

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Comment #9 by Anonymous posted on
Anonymous
Bozo is right. No more free anything.

I, too, was with World Savings for years. Loved them. Always got great rates. And because they had two charters, I could get FDIC coverage up to $200,000 for solo individual.

Wachovia also has two charters and can do the same thing, but their rates just don't cut it.

My 5.46% CD (the good old days) expires April. And my other money is in Wachovia's 4% 90-day promotion. After that, I will join Bozo as one of the many who say goodbye to Wachovia.

Not many small local Savings Banks left who offer higher rates than the big boys.

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Comment #10 by Bozo (anonymous) posted on
Bozo
Banco Popular???? That's too funny. I've lost more money with Doral than I am free to admit. In my "equity" investment in their stock, of course. Puerto Rican banks, think of jumping beans.

Seriously, I have not a clue where CD savers might park their cash over the next few years. Obviously, this blog is a lifesaver to all (kudos to Banking Guy), but it appears we will have to scratch and claw for the best rates. Any return over inflation plus taxes, well, good luck. I assume preservation of capital is the buzzword in a recession, but spare me the mattress thingee.

Now, if my Mom (92) actually spent any of the interest she made on her CDs, I'd be worried. She's just cranky her net worth is flat-lining.

Yours,

Bozo

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Comment #11 by Anonymous posted on
Anonymous
e*trade's complete savings is still at 4.40% guys--not saying that won't take a drop, but it is a pretty solid rate these days if you're looking for a place to keep liquidity

1
Comment #12 by kate (anonymous) posted on
kate
emigrantdirect is down to 3.60%, about a 1% point drop. I'm closing my account. It has also given problems with ACH transfers many times.

1
Comment #13 by Anonymous posted on
Anonymous
FNBO now down to 3.85%. Just got the email.

1
Comment #14 by Scott (anonymous) posted on
Scott
Banco Fortuna is also down to 3.6%. This sucks :(

1
Comment #15 by grobe (anonymous) posted on
grobe
Gmac is going down to 3.5% tomorrow.

1
Comment #16 by Anonymous posted on
Anonymous
Flagstar dropped to 4.25%

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