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More Rate Cuts - Savings, Checking and Reward Checking Accounts

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April has started with more cuts to savings and checking rates. ETRADE made a large cut of 44 basis points to its Complete Savings Account rate. Its new rate is 3.01% APY. Schwab Bank High Yield Investor Checking had its rate slashed from 3.01% to 2.26% APY. If a bank can't keep a rate above 3%, it shouldn't call it a high yield account in my opinion.

Reward checking accounts are also seeing rate cuts. Both Provident Credit Union and Connexus Credit Union slashed the rate of their reward checking from 5.01% to 4.01% APY. These two are in my nationwide reward checking account list since both have easy membership qualifications. Both have a $25K cap, so even reward checking accounts with small caps aren't immune to large rate cuts. Another thing to note about these accounts is that they've been around for much of last year. This might be a sign that these reward checking accounts aren't as profitable as the banks had hoped. But with most online savings account rates dropping to 3% and below, 4.01% isn't bad if it can last.

The next Fed meeting is at the end of April. Bernanke testified before Congress today (see article), and he painted a gloomy economic picture for 2008. Regarding another rate cut: "Economists at Bear Stearns noted Bernanke 'downplayed risks [of] inflation,' which they interpreted as 'leaving the door open to a further rate cut on Apr. 30.' They speculated that it would be only a quarter-percentage-point cut, however." So maybe we're nearing a bottom for rates.

Below is a summary of the recent bank rate cuts since my weekly rate recap on Saturday:

  Tags: Citibank, Charles Schwab Bank, E*TRADE Bank, Connexus Credit Union, Provident Credit Union (CA), Zions Bank, savings account

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Comments
9 comments.
Comment #1 by Anonymous posted on
Anonymous
Today (Wednesday) is Flagstar's "change day". For now they appear to be holding their Express MM Promo rate at 3.6%. Hope this continues.

1
Comment #2 by Clyde (anonymous) posted on
Clyde
I wholeheartedly agree that these Rewards Accounts are proving to be not as profitable as Bancvue said they would.

I also agree that the Fed will cut the rate by .25% at the next meeting. The rate futures traders are also betting on this heavily.

Hopefully the bottom will truly be 2%. The question is, with a 2% Fed Funds Rate, will we still be able to get over 3% interest? (It's not looking good.)

1
Comment #3 by Anonymous posted on
Anonymous
Have you noticed that Etrade Max rate gas better yield than Complete savings?

1
Comment #4 by Anonymous posted on
Anonymous
I am very disapointed with Schwab. You are correct in saying under 3% should not be called high yield. I love this account because of the speed and ease of use but 2.26% just does not cut the mustard for me. It was over 4% when I opened it and I was happy and when they droped it to 3% I was still content with it but now its time to move money out. Will keep the account open with minimum there for possible future use. I feel like the dog chasing his own tail with these rates but I refuse to let the banks use my money for less than 3%. I bought a new bed a few months ago and kept the old mattress in the garage. Looks like I will have use for it soon.

1
Comment #5 by Anonymous posted on
Anonymous
Does anyone have any comment about the SmartyPig (http://www.smartypig.com/)? They are at 4.30% APY

2
Comment #6 by Anonymous posted on
Anonymous
Hadn't heard of smarty pig, but just read through their website, and it sounds like to withdraw funds you have to do so by check and pay a $25 processing fee.

1
Comment #7 by Shirl (anonymous) posted on
Shirl
Choosing between SmartPig and Alliant Credit Union (both paying approx. 4.3%), I would choose Alliant's Savings Account.

The problem is the rate on both won't stay 4.3%.

1
Comment #8 by ShraZZy (anonymous) posted on
ShraZZy
Amtrust E-Money Market is now a joke for lower tiers. CD raised a lil

1
Comment #9 by Anonymous posted on
Anonymous
One united unity gold e savings rate lowered to 3.60%. I guessed this would happen so I transfered most of my money out after the end of the quarter on april 1st. Trying to decide now if I should just close the account or keep it open for possible future use.

1