Dedicated to Deposits: Deals, Data, and Discussion

Bank Deals Weekly Summary for May 10, 2008

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

There continued to be signs this week that deposit rates may be on their way up. E*TRADE increased the yield of its Complete Savings account from 3.01% to 3.15% APY, and several banks continued to increase their CD rates. As in the previous week, most increases were on longer term CDs which indicates anticipation for higher rates in the future. Inflationary pressure is one reason, but there were also signs that the economy wasn't in as bad a shape as people had feared. However, as this New York Times article describes, there are still signs that there's a lot more downside risk to the economy. That could put pressure on the Fed to cut rates again.

It may take more time before we see the full effects of the credit and housing crisis. Early in the week, I reported on concerns that Bank of America may pull out of the Countrywide deal due to worsening problems at Countrywide (see post). On Friday, we saw the third bank failure of the year (see post). Things will probably get worse before they get better, and that will likely prevent rates from rising too much.

Savings Account Rates Recap

E-LOAN came out with a promotion for its savings accounts. New accounts will earn 3.75% APY guaranteed through 7/31/08 (see post). This reminds me of the promotion that AmTrustDirect did early this year. E-LOAN's promo is a little better since they didn't create a new savings account. In AmTrustDirect's case, old customers who didn't switch became second-class customers. The old e-Money Market Account rates have dropped much more than the new e-Savings Account rates, and the e-Money Market Account rate dropped again this week to 2.15% APY for balances under $25K. This is now over one percent lower than the e-Savings Account rate of 3.25% APY.

Some of the other savings account rate cuts this week occurred at Savings Square, Century Bank Direct, Discover and Presidential Bank. Charles Schwab again cut the rate on its High Yield Investor Checking Account. The yield dropped from 2.26% to 2.01% APY. I wonder how low it would have to go for them to remove "High Yield" from the name.

The best deal for savings accounts is at the AARP Financial Savings Center. I first reported on this on May 2nd. They're offering a 4.50% APY no-minimum online savings account and a 4.75% APY money market account for balances over $50K. The only catch is that you must be an AARP member. On Monday I confirmed that they are in fact affiliated with AARP Financial. The deposits are FDIC insured, but the accounts are not handled directly with a bank which has created a lot of questions (see post).

CD Rates Recap

The 5% 5-month CD promotion at Xceed Financial Credit Union ended this week. I have a new short-term CD promotion that is on top of the 6-month CD list this week. It's a 4% APY 7-month CD at Christian Community Credit Union. Anyone can qualify for membership. One important note is that it's not NCUA insured. It only has private insurance through ASI (see post).

Both Indymac Bank and Alliant Credit Union continued to be tied with the best one-year CD rate. Both have a yield of 4.15% APY.

As I mentioned before, longer term CD yields have increased at several banks. E-LOAN again increased its long-term CD rates. Its 5-year CD is now 4.75% APY. Mutual Bank came out with a new CD promotion with a 4% APY 18-month CD and a 4.50% APY 54-month CD.

Reward Checking Recap

I added 8 more local reward checking accounts this week (see recap below). Half of these have top yields of around 6%. The 6% is holding at many banks and credit unions, but I have a feeling it's going to be increasingly difficult for them to maintain this rate. As more people switch their large savings from online savings accounts to these reward checking accounts, it will become less profitable for the banks. The debit card requirements can help pay the interest on accounts with small balances. This becomes more difficult as the balance increases. Hopefully, if banks can attract more of the average Joe's who'll maintain a relatively small balance and will make many large debit card purchases, the banks can keep paying out the high yield.

For a list of all reward checking accounts (including ones available nationwide), please see my new High Yield Checking website.

Recap for the Week - Links to This Week's Posts

Banking News

Savings and Money Market 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 May 3rd, Apr 26th, Apr 19th, Apr 12th, Apr 5th, Mar 29th, Mar 22nd, Mar 15th and Mar 8th.

Quick Links: Refer to the following links for the savings accounts and CDs that interest you: Liquid Account Rates: Savings Accounts, Reward Checking, 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 May 10, 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
3 comments.
Comment #1 by Michael (anonymous) posted on
Michael
Thanks, BG!

Loved your funny line: "How low does the rate have to drop before Schwab removes 'High Yield' from the account title?"

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Comment #2 by Anonymous posted on
Anonymous
Quick comment - you don't have Century Bank Direct's checking account listed (currently 3.35% APY). You do have their other products listed, so it must just be an oversight.

It actually looks like a great checking account - very similar to Salem Five Direct, only a higher yield.

Keep up the great work! You're the best!

1
Comment #3 by Banking Guy (anonymous) posted on
Banking Guy
Good point. The yield does make it one of the best non-reward checking accounts available, and it definitely deserves inclusion.

1