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Online Banks Quick to Cut Rates after Yesterday's Fed Rate Cut

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Several online banks are not wasting any time in cutting their rates after yesterday's Fed rate cut. EmigrantDirect cut the rate on its savings account from 3.30% to 3.00% APY. It's now equal to the rate when it was first launched at the start of January 2005. It's also equal to ING Direct's new savings account rate. As usual, ING Direct was quick to cut, but at least it only cut the savings by 10 basis points. ING Direct also cut all of its CD rates by 25 basis points. Most of ING Direct's CDs have yields of only 2.50% APY. Such a low rate reminds me of the rates that existed from 2002 to 2004.

Other online banks that have cut their rates include Savings Square and Salem Five Direct. Below is a recap of the latest cuts.

I'm afraid the rate cuts have only just begun. Brace yourself for more.
  Tags: ING DIRECT, Salem Five Direct, savings account

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Comments
27 comments.
Comment #1 by Man's Inhumanity Towards Man (anonymous) posted on
Man's Inhumanity Towards Man
Ing Direct's Electric Orange Checking Account was 4.75% when I signed up end of 3rd quarter 2007. It is now below 2%.

Shameful.

It goes without saying: I have pulled my money out of ING Direct Electric Orange and am in a Credit Union's Reward Checking. Yes, I fear my Reward Checking Rate will also decline, but I am praying it won't go below 4%. I'd live with 4%. But if they lowered my Reward account below 4%, I would be raising the white flag of surrender.

1
Comment #2 by Anonymous posted on
Anonymous
I hear what you are saying and feel your pain like I am sure most of us that visit this site do.
But where do we savers all go if we surrender?

I ,for one, will not invest in the stock market. Although that may be part of Benarke's strategy, to force us out of secure bank accounts and into the market in order to prop it up and the next thing you know, Wall Street's financial institutions will have our money too.
No thanks big Ben.

1
Comment #3 by Anonymous posted on
Anonymous
I negotiated a 1yr cd renewal with indymac today for 4.10%APY. just a bit above their advertised rate. probably won't last much longer.
:(

1
Comment #4 by singlepap@gmail.com (anonymous) posted on
singlepap@gmail.com
You can lock in 7% rate for 9 months at TDAmeritrade. Need 30k increments: 30k or 60k or 90k. If you have the liquidity to do that by tomorrow, write me. If you don't, then don't bother - the offer is dying

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Comment #5 by Anonymous posted on
Anonymous
To singlepap,

You keep touting the same deal. If it is legitament, why don't you just add the link or web address to your comments?

1
Comment #6 by Anonymous posted on
Anonymous
I sure appreciate the work that Banking Guy puts into this blog, as well as the comments the other readers share. I have really picked up some good knowledge that I would not have had otherwise.

I share the sentiments that others have expressed. It drives me crazy that moves made by the fed to make credit more available are slow to be reflected in borrower's rates, yet the moves so quickly punish people who try to save.

AMEN to the anonymous writer that talked about not getting sucked into the stock market. I have money in it now, and it makes the savings rates look like a dream come true.

As Banking Guy says, the rates seem to be trending toward 2002 levels. That time around I used a bunch of my cash toward the purchase of a bigger house for my family. Of course we know what the real estate market looks like, don't we??

What's a saver to do? I guess we just share what we know and do the best we can! Make them stay competitive if they want our deposits.

1
Comment #7 by Man's Inhumanity Towards Man (anonymous) posted on
Man's Inhumanity Towards Man
By "surrender" I mean just accepting the fact that for the time being, I will just not make any decent return on my money. I will sit back and do without the decent return until the return of the higher interest rates.

I got burned too many times playing the stock market.

I'd rather sit back and make little after taking into account inflation but knowing my money is safe in federally insured accounts than put it into a risky endeavor (no matter how small the risk) and have to worry about it.

1
Comment #8 by Bozo (anonymous) posted on
Bozo
KeyDirect's 10 year is still over 5%. They are nuts, but you might want to avail, and all that. Anything over 5% is a gift, so 5% is a "present" in these rate environments.

I have my KeyDirect at 5.75% for 10 years, so I'm OK.

Yours,

Bozo

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Comment #9 by Bozo (anonymous) posted on
Bozo
To: All those who are cashing in their stocks
Fm: Me (Bozo)

Please exit stage right with your stocks. I will buy them. Diversify, diversify, diversify.

Once you have maxxed out in your cash stuff (as I have), keep a tad in your ammo locker to buy beaten-down stuff.

You folks are a tad pessimistic.

Yours,

Bozo

1
Comment #10 by Anonymous posted on
Anonymous
Bozo, if what you do works for you, fine. To each their own.

But I think you are barking up the wrong tree. You might gain more attention on a stock trading blog site rather than this one:

Bank Deals-Best Rates and Deals.

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Comment #11 by Anonymous posted on
Anonymous
I don't think one has to ONLY put their money in banks to be interested in the best bank deals. But that's just me.

1
Comment #12 by Anonymous posted on
Anonymous
Victim of his own policy.

Report: Bernanke's own home down 260K in value

Say it isn't so: The Fed chairman, rapidly losing home equity in the housing bust?

Bloomberg News reports Fed Chairman Ben Bernanke's Capitol Hill home is slipping in value and may soon be worth less than he paid for it. An economist quoted by Bloomberg estimates Bernanke's house has lost $260,000 in value.

"Bernanke lives in Washington's Capitol Hill area in a four- bedroom, 2,600-square-foot house he bought new in May 2004 for $839,000. Almost four years later, it may not be worth any more, according to real estate records and local agents.

More: "'Even though he's the Fed chairman, he's going to get hit -- but I think lot of people will in Washington,' said William Wheaton, an economist at the Massachusetts Institute of Technology. The value of Bernanke's home 'probably went up to $1.1 million and it's probably back down to $840,000,' because prices in Washington just a couple years ago 'out of control,' Wheaton said."

1
Comment #13 by Anonymous posted on
Anonymous
Congress, Regulators Look to Expedite Housing Relief Proposals.

Congress concluded: "Dump the present dead bits and focus on speculators again"

Now that the Federal Reserve has pledged billions of dollars to rescue Wall Street bankers from possible default, lawmakers and regulators are turning their attention to helping average citizens -- from homeowners in danger of foreclosure to people who want to buy a home.

Here we go again, politicians will decide how we live and buy properties. Watch for disastrous outcome.

1
Comment #14 by Anonymous posted on
Anonymous
Isn't that the speculators destroyed the housing market by creating housing bubble?

Leave it to Congress to finish us all, how stupid they think we are.

But, I see their point, with millions of homes seating empty, if they can unload back to the speculators, the final ax will be postponed for the next administration to deal with.

1
Comment #15 by Anonymous posted on
Anonymous
Now I see the connection of Ben's rush to cut rates down to nothing.

They are fighting fire with fire.

They want to create second bubble that will be bigger than the previous bubble, thus taking credit for nullifying the previous housing bubble.

We are all doomed......

1
Comment #16 by Anonymous posted on
Anonymous
That is what happens when we elect incompetents members for Congress.

They need to listen to the people and not Ben Bernanke.

1
Comment #17 by Anonymous posted on
Anonymous
Ben and Congress and the Banks are conspiring against the people, therefore, don't expect savings rate to go up anytime soon.

Savers lost interest will be used to create profit for the Banks and finance second housing bubble.

1
Comment #18 by Anonymous posted on
Anonymous
There are over 7 (seven) trillion dollars in savings, checking, money markets and CD in all of the Banks in USA.

Cut the interest rate from 6% to 2%, and you created $280 Billions of free money for the Banks per year.

This float will be used to create the second housing bubble as Congress implied today, and finance the speculators again on expense of the Savers.

1
Comment #19 by virgquest (anonymous) posted on
virgquest
Back to the rates.... FNBO is down to 3.25%.

1
Comment #20 by Kate (anonymous) posted on
Kate
VirtualBank is down to 2.25%. YUCK! But yes, what's a saver to do, especially with shorter term emergency savings? It's annoying as well as time-consuming to open and close so many accounts and move money around to chase better yields.

1
Comment #21 by Anonymous posted on
Anonymous
To BOZO
Please go to the Post" FED CUTS 75 BASIS POINTS" and read the comment I left there for you. You can have all of the 10 year cd's at Key that you want cause I don"t want any of them. Besides SINGLEPAP can get you 7% but I guess he wants you to pay for the info since he keeps it secret.

1
Comment #22 by Kate (anonymous) posted on
Kate
And UFB Direct is down to 3.30%, 3.35% APY. Double yuck! I've been keeping most of my very short term savings there because it has the best rate of the liquid accounts I have, and now it's also crappy.

1
Comment #23 by Anonymous posted on
Anonymous
Singlepap's got no magic...all it is, is a $1000 bonus for opening an account with $30K, plus keeping your money in their money market fund for 9 months. Hardly a secret...you just have to know what to ask to get the $1000 bonus.

1
Comment #24 by Anonymous posted on
Anonymous
FNBO Direct down to 3.25%.

1
Comment #25 by ShraZZy (anonymous) posted on
ShraZZy
WAMU now is 3.55% still pretty good!
Their CDs also dropped
60M CD at 4%

GrandYield Direct 3.50%

1
Comment #26 by Anonymous posted on
Anonymous
Emigrant Direct now down to 2.75

1
Comment #27 by Anonymous posted on
Anonymous
AmTrust e-saving down to 3.25% and highest tier of e-money market to 3.00%.

1