Bank Deals Weekly Summary for January 24, 2009

Comments (6)
Jan 24, 2009 - 6:28 PM by Ken Tumin

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

Savings account and CD rates continue to drop. Each week since the last FOMC meeting with the Fed's historic rate cut, banks have slashed rates. At least we don't have to worry about another Fed rate cut at next week's FOMC meeting. One bit of good news for those with large balances at banks is the new TARP bill that includes a provision to make the $250K deposit insurance limits permanent. It passed the House last week, and it's now in the Senate.

Savings Account Rates

The big news this week happened yesterday when DollarSavingsDirect cut the 4% APY on its savings account to 3.50% APY. This was the last major online bank that was still offering 4% APY. There is still the small bank Broadway Federal Bank that's offering a 4.08% APY savings account that's available nationwide (see review).

In addition to DollarSavingsDirect, several other banks cut their savings and money market account rates this week. Here's the long list.

Rate Hikes:
  1. None
Rate Drops:
  1. Union Federal Savings - 3.05% (was 3.10%)
  2. Amegy MMA - 2.75% (was 2.90%)
  3. GCF Bank Sav 3mo promo - 2.35% (was 2.75%)
  4. Discover MMA - 2.05% to 2.55% (was 2.15% to 2.66%)
  5. ETRADE Max-Rate Chk - 0.75% (was 1.50%)
  6. GMAC Sav, MMA under $500 - 2.40% (was 3%, 2.5%)
  7. DollarSavingsDirect Sav - 3.50% (was 4%)
  8. WaMu Online Savings - 1.00% (was 1.15%)
  9. ShoreBank Savings - 3.15% (was 3.50% before 1/22)
  10. Century Bank Direct - 3.26% SAV, 3.09% MMA (was 3.31%, 3.32%)
  11. Bank of Internet - 2.90% MMA, 2.60% CHK (was 3.06%, 2.80%)
  12. WTDirect - 2.81% (was 3.06%)
  13. UmbrellaBank MMA - 2.60%, 2.85% $50K+ (was 2.75%, 3.00%)
  14. ING Direct OSA - 2.40% (was 2.50% before 1/20)
  15. ING Direct EO - 2.50% $50K, 2.70% $100K (was 2.60%, 2.80%)
  16. Corus Bank MMA - 2.85% (was 3% before 1/20)
Nationwide Certificate of Deposit Rates

CD rates continue to fall, and it's getting difficult to find 3% for 1-year CDs and 4% for long-term CDs. GMAC Bank had been offering 3.50% APY on its 1-year CD, but it slashed this rate on Thursday to 3% APY. This is the first time I've seen GMAC update rates before Friday.

On Friday January 16th I reported on First Command Bank that was offering a 4% 12-month CD nationwide. There must have been so much demand that the bank took off their online CD application and stopped offering this nationwide.

If you want to lock in a decent rate in a CD, this may be the last week. Many credit unions update their rates at the start of each month, and I suspect there will be many rate cuts in February. Several credit unions are still offering short- and long-term CD rates from 3% to 5%.

Refer to the list below for a few of the best nationwide CD deals. The full list of nationwide CD rates is farther down.
  1. 3.25% 6-mo CD at America's CU (account review)
  2. 3.50% 6-mo CD at Navy FCU (account review)
  3. 4.05% 13-mo CD at Western FCU (account review)
  4. 3.95% 12-mo CD at NGFCU (account review)
  5. 3.50% 24-mo & 4% 36-mo CD at H&R Block Bank (account review)
  6. 4% 36-mo, 4.25% 48-mo, 4.50% 60-mo CD at Pentagon FCU (account review)
  7. 4.75% 60-mo CD at Mountain America CU (account review)
  8. 5.10% 84-mo CD at Navy FCU (account review)
Reward Checking Accounts

I posted on five new reward checking accounts this week with two of these five in Alaska and South Dakota, states that had lacked reward checking accounts. I reviewed the math behind reward checking accounts and their rate trends in this post. I looked at data that I received from one credit union which shows how the debit card usage requirements allow them to offer interest rates 1% to 2% higher than what they could offer without that requirement. In the last two years, reward checking rates have remained higher than online savings account rates. We'll see if that can continue this year. I'm seeing more people finding these reward checking accounts more appealing as their CDs mature and they notice the new pathetic CD rates. More people with larger balances in these reward checking accounts could make it tougher on the banks to continue the high rates.

For my full list of reward checking accounts around the nation, please refer to my High Yield Checking website. For reward checking accounts available nationally, please refer to my nationwide table.

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

Banking News

Savings/Checking 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 Jan 17th, Jan 10th, Jan 3rd, Dec 27th, Dec 20th, Dec 13th, Dec 6th, Nov 29th, Nov 22nd, Nov 15th and Nov 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 January 24, 2009

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:

Various Deposit Account Deals


High Yield Reward Checking Accounts - Open to All


Recent CD Specials at Local Credit Unions and Banks


Bank Account Alternatives


Historical Rates from the Federal Reserve (Federal funds, Treasury bills, CD's)

Post a CommentComments
In order of date posted. - Sort by votes
Anonymous

Anonymous - #1, Saturday, January 24, 2009 - 7:49 PM

I've read that the Senate is not going to take up the TARP bill (HR 384) that the House passed. Any word as to whether there will be any attempt to get the FDIC and NCUA limits permanently increased by means of separate legislation?


1
Anonymous

Anonymous - #2, Saturday, January 24, 2009 - 11:22 PM

thanks for the list...i didnt see you list Hanmi Bank for the 6 month CD at 4.2%


1
Anonymous

Anonymous - #3, Sunday, January 25, 2009 - 3:10 AM

Can you imagine if rates dropped to 0.1% for all savings accounts? That would mean if you invested half a millions dollars ($500,000) you would only get $500 interest for the entire year. Many checking accounts are paying this same rate. I wonder how many accounts with this similar amounts are in these accounts?


1
APP Funds

APP Funds (anonymous) - #4, Sunday, January 25, 2009 - 4:12 AM

I'd get rid of US dollars.


1
Trevor Plantagenent

Trevor Plantagenent (anonymous) - #5, Sunday, January 25, 2009 - 4:17 PM

The technical definition of a "Savings Account" is an account that pays interest.

If a savings account only paid 0.1% interest, there would be no advantage whatsoever to having a savings account, so savings accounts would be emptied.

Also, if the rate dropped to 0.1%, all of the online-only savings accounts would go under.

My guess is that the lowest an online-only savings account rate would drop would be 1% flat. Any lower and everyone would pull their money out.


1
O-Qua Tangin Wann

O-Qua Tangin Wann (anonymous) - #6, Sunday, January 25, 2009 - 9:22 PM

Economists are predicting the Fed Funds Rate will stay at the 0% to 0.25% level throughout all of 2009.

From the AP today:

"With the country stuck in a painful recession, the Federal Reserve is widely expected to keep its key interest rate at an all-time low this week and examine other unconventional ways to lift the economy.

"Fed Chairman Ben Bernanke and his colleagues are battling a three-headed economic monster: crises in the housing, credit and financial markets that — taken together — haven't been seen since the 1930s.

"While Bernanke has pledged to do all he can to provide relief, President Barack Obama and Congress are racing ahead to enact an $825 billion package of increased government spending and tax cuts to revive the economy.

"Against that backdrop, the Fed is all but certain to hold rates near zero and may offer greater insights into what other steps might be taken to ease the problems. The Federal Open Market Committee — the central bank's main policymaking group — opens a two-day meeting Tuesday to assess economic and financial conditions, review the effectiveness of programs already in place to deal with the trio of crises and examine new relief options going forward.

"At its previous meeting in December, the Fed took the unprecedented action of slashing its key rate from 1 percent to a new, targeted range of between zero and 0.25 percent. Economists predict the Fed will leave rates at that record-low range on Wednesday and probably through the rest of this year in a bid to help brace the economy."

~O-Qua Tangin Wann


1

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