Dedicated to Deposits: Deals, Data, and Discussion

Rates Slashed Again at AARP Financial Savings Center

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AARP Financial Savings Center cut the rates today on both its High Yield Savings account and its Jumbo Secure Money Market account. The new yield is 3.50% APY for both.

The yield had been 4.05% APY for both. For those who already have accounts, the new rate may not immediately apply to you, but it probably will fairly soon. When the rates were slashed on May 24th, readers had reported being told that the old rates would apply to existing customers for probably at least 30 days. This turned out to be too optimistic. Within two weeks, the rates for existing customers were lowered to equal the new-account rates.

Here's a summary of the rate changes over the last couple of months:

Date High Yield Jumbo Secure
Savings Account Money Market Account
5/02/08 4.50% APY 4.75% APY (first reported)
5/24/08 4.05% APY 4.05% APY
6/14/08 3.50% APY 3.50% APY

I was afraid these rates would not hold. Readers found many other Waterfield/Affinity related banking centers on the web which includes the well-known UFB Direct. I reported the yields offered by all of these banking centers in this May 21st post. There were none that had yields of 4% or higher. Most had yields around 3%. So it seemed unlikely that the AARP Financial Savings Center would be any different over the long term.

Alliant Credit Union's savings account is now clearly on top with a 4% APY. This should at least hold through June.(see my Alliant review).

For more details about AARP Financial Savings Center and the the savings and money market accounts, please refer to the following past posts:

Thanks to all the readers for noting this change.

  Tags: savings account

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Comments
12 Comments.
Comment #1 by Sofa King Frustrated (anonymous) posted on
Sofa King Frustrated
Some might call this Bait & Switch, even though they state rates can change at any time.

Shame on AARP Savings for pulling all of us in with such a high rate only to lower it so much so soon.

I call on everyone to pull out their money just as fast as they put it in.

Show these online banks that they can't pull this kind of bullsh*t.

I will be writing a check to transfer my money today. I will leave the $200 minimum in my Jumbo MMA for the 180 days to avoid the penalty.

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Comment #2 by Anonymous posted on
Anonymous
I got in when the rate on the Jumbo MM was 4.75. My account is showing they are currently giving me a rate of 4.05 APY on Jumbo MM. I have noticed they drop the rate every Friday night. I would not be suprised if my rate drops next Friday night.

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Comment #3 by Anonymous posted on
Anonymous
AARP is supposed to be a none profit organization but they rake a little bit off of anything they touch. Then they use it to support the democrats to further their far left agenda. Anyone who joins helps further that agenda. I quit AARP several years ago and will not touch anything they are involved with.

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Comment #4 by Anonymous posted on
Anonymous
What a shock!
My Jumbo still shows 4.05% but I spoke to a CSR today and was told that yield would probably drop Monday.
I too, plan to withdraw all but the $200, but will wait until the interest for this period shows up on the account.
It was fun while it lasted and I will have drawn about $2K in interest from the full time AARP first mentioned the great rate.

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Comment #5 by Anonymous posted on
Anonymous
I am thinking of taking out everything except $200, then take out the dividend when it gets posted. Is there any reason to postpone taking out funds from AARP Savings until they post this month's dividend? They have the followng posted on their web site.
Can someone explain the "daily balance method"?

"Money Market Savings accounts are variable rate products and rates may change daily without prior notification. The Huntington National Bank uses the daily balance method of computing interest, which applies a periodic rate to the full collected amount of principal in the account each day."

1
Comment #6 by Top CD Rates (anonymous) posted on
Top CD Rates
And that is the joy of high yield savings accounts. I've just kept funds at Emigrant. If the fund are truly for short-term savings purposes, the yield doesn't matter too much.

If your funds are for a longer outlook look towards CDs or other investment opportunities

1
Comment #7 by Anonymous posted on
Anonymous
I recently called in to inquire on the long response time to my bank mail. CSR told me that CS is unually busy because of the unexpected thousands of new applicants. She said that for a year the account's HY was only known to a few people and then it was advertised and they weren't expected the resulting volume. So I think that this is the reason they lowered the rate.

1
Comment #8 by Anonymous posted on
Anonymous
This was a typical instance of the use of a 'teaser rate' just to draw in large sums to Huntington Bank and Waterhouse Financial Services. I'm sure it helped out AARP also. I drew out 70 percent of my funds on Friday the 13th (how ironic) and intend to draw down even more funds in anticipation of the rate going to 3.00 percent shortly, based on previous rate cuts. I did open a checking account also with them so it's easy to transfer the funds out of savings into checking on an immediate basis.

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Comment #9 by Anonymous posted on
Anonymous
I emailed AARP Savings inquiring about the "slashing" of the rates on their savings products and received this reply...

Thank You for contacting AARP Financial Savings Center.

The AARP Banking Center continues to be committed to delivering high quality and valued products to its customers. While we have been able to maintain consistent rates since July 2007, we had to respond to the market and economy and make an adjustment. We do have a finance committee that meets and uses many different criteria’s to determine the rates and it is proprietary information. This is not an introductory or promotional rate. As stated in all of our disclosures this is a variable rate product and the rate could change in the future. You can check the website or your account online at anytime for the current rate, you can also call our Customer Care Center at 866-421-5806. Additionally, your rate is published on your monthly statement. We do not send formal rate change notifications on variable rate products.

Respectfully,
H. John`ene Brown

Quite a bunch of bureaucratic mumbo-jumbo there.

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Comment #10 by Anonymous posted on
Anonymous
My AARP savings still shows 4.05%. I sent them a "bank email" letting them know that I'd be pulling my funds if my rate dropped to 3.5% and that I would not be doing business with AARP anymore.

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Comment #11 by Anonymous posted on
Anonymous
I am out of AARP .. Fortunately Golden 1 CU has a branch 10 minutes away and a 100 Day 5% APY certificate.

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Comment #12 by Anonymous posted on
Anonymous
Can someone tell me if there is a way to get the money out of the AARP high yield account without paying a transfer fee? Mine is with Huntington. I discovered that I did not return the signature card that came with the welcome packet. I am mailing that today and am hoping that I receive checks. But if I don't, what are the options for removing the money?

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