Bank Deals Weekly Summary for August 22, 2009

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Aug 22, 2009 - 8:54 PM by Ken Tumin

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

There was another large bank failure yesterday. Guaranty Bank with branches in Texas and California was shut down. The FDIC arranged for BBVA Compass to assume all deposits including those above the FDIC limit (except for brokered deposits). This has been common for most bank failures this year. The bank that takes over the failed bank agrees to assume all regular deposits. BBVA Compass has also agreed to something that hasn't been too common. BBVA Compass announced on their website that they will honor existing CD rates and terms. This is the same thing that Chase did when it assumed WaMu deposits last year. The only downside is that CD holders may not have an option for a penalty-free early withdrawal.

In addition to Guaranty Bank's closure, three small banks failed yesterday. One of these was ebank of Georgia. Its deposits were assumed by Stearns Bank, N.A. The last Georgia internet bank to fail was NetBank which was one of the first banks to fail in this financial crisis. I've long reported on ebank's competitive CD rates. Stearns Bank hasn't decided if it'll honor existing ebank CD rates to maturity. If you have an ebank CD, please let me know what Stearn Bank decides.

Most bank failures this year have been easy on depositors. The FDIC has typically been able to find a buyer which assumes all deposits. The only issue in many cases has been the lowering of rates on existing CDs. However, the worst case scenario happened on August 14th when Community Bank of Nevada was shut down. The FDIC wasn't able to find a buyer, and thus, the bank will actually be shut down without any other bank taking over. Customers with deposits over the FDIC limit will likely lose their uninsured deposits. CD holders are having to wait to receive their money in the mail. The FDIC said it was mailing the checks last Monday for the CD principal and accrued interest up to August 14th. Two readers have reported that they are still waiting as of today to receive these checks. Conditions are better for those with Community Bank checking accounts and other liquid accounts. The FDIC converted Community Bank into a temporary bank that will operate for about 30 days to give those with liquid accounts time to find other banks. So even in the worse case scenario, depositors have access to their liquid accounts.

Savings Account Rates

There were several rate cuts this week, but on the positive side, there were fewer than in previous weeks. In addition, OneWest Bank increased the rate on the bottom tiers of its E-Money Market.

I included a new savings account in the list. It's from Solera National Bank in Colorado, and it has the very competitive rate of 3.00% APY on all balances. I first reported on this savings account in July. At that time the savings account rate wasn't listed on the bank's website. However, I just noticed today that they now have it listed. I have been including the bank's checking account. It's a tiered-rate checking account with a 2% APY on balances from $20K to $100K.

When I contacted the bank in July about the savings account, I was told that people from any state can apply without a branch visit. As I noted in the post, it's a small bank. So I wouldn't expect the bank to offer such a high rate nationwide for too long.

When a small bank offers a hot deal on a savings account, it rarely continues as a long-term competitive account. Broadway Federal Bank is an example of what has happened. In November 2008 I reported on Broadway's 5.13% savings account. In less than a week, the rate fell to 4.08% APY. Compared to other savings accounts, the rate held up reasonably well. However, Broadway stopped offering this account to new customers in May, and now the rate is only 1%. In addition to the falling rates, the account lacked many of the features of a mature internet savings account, and many readers complained of unresponsive customer service. On the plus side, existing customers are now being offered a 2.53% 18-month CD. So those who jumped on this deal did get a very high savings account rate for several months, and now they are getting a good CD deal. But the account took some work, and they'll have to look again for another savings account if they want a top rate.

Below is the list of rate changes for this week.

Rate Hikes:
  1. OneWest Bank E-Money Market - 1.85% $10K-$50K (was 1.25%)
  2. Imperial Capital iChecking - 0.88% (was 0.79%)
Rate Drops:
  1. Bank of Internet Advantage Savings - 1.85% (was 2.02%)
  2. Wilshire State Bank eLink Savings Account - 1.75% (was 2.00%)
  3. Capital One/Costco InterestPlus Savings - 1.75% (was 1.85%)
  4. WTDirect Savings - 1.66% (was 1.76%)
  5. Schwab Bank High Yield Investor Savings - 1.05% (was 1.35%)
Certificate of Deposit Rates

Some of the top CD rates fell this week, but I did see a positive trend with 12-month CD rates. A few banks increased their rates including OneWest, MetLife and UmbrellaBank. OneWest Bank (formerly IndyMac Bank) came out with a very competitive CD special: a 2.15% APY CD for terms of 10 to 18 months. USAA Bank also increased some of its CD rates since my August 4th post. Their 15-month CD is now especially competitive with a 2.36% APY for large balances. For those with large savings who want a top CD or IRA CD rate at a strong bank, USAA Bank is a good option.

USAA Bank also has some very competitive long-term CD rates, but they're not quite as high as what Citibank has been offering in some states. That special in-branch CD (not online) has a 4.00% APY and a 5-year term, and it's being offered in Florida, California, Nevada and possibly other states.

Five years is a long time in today's environment in which we may see rates rise sharply in a couple of years. However, the early withdrawal penalty should be considered. In this case, it's 6 months of interest (for NV & CA. See post for more info). So if you decide to withdraw the money after 2 years, you'll lose out on half of the second year's interest. This results in 4% for year one and 2% for year two which gives you a return of around 3% APY. That's better than most all 2-year CDs you can get now. An early withdrawal at the end of the first year cuts the first year return to about 2% which is also not a bad 1-year CD rate. If rates stay low for many years, the advantage of the long-term CD is obvious.

Best Nationwide CD Deals as of 8/22/09: Also listed are savings account promos with rate guarantee periods. The full list of nationwide CD rates is farther down.
  1. 3.01% 3-mo money market/checking promo at EverBank (account review)
  2. 2.05% 3-mo savings account promo at 1st Constitution Direct (account review)
  3. 2.00% 4-mo CD at Danvers Bank (account review)
  4. 2.15% 10-mo CD at OneWest Bank (account review)
  5. 2.36% 15-mo CD $175K min, 2.05% $1K min (account review)
  6. 2.35% 12-mo CD at Delta Community CU (account review)
  7. 2.25% 12-mo CD at United Central Bank (account review)
  8. 2.78% 25-mo CD at Crane FCU (account review)
  9. 2.75% 24-mo CD at Southeast Financial FCU (account review)
  10. 3.40% 48-mo CD & 2.20% 12-mo CD at Golf Savings Bank (account review)
  11. 4.00% 60-mo CD at Citibank in-branch in some states (account review)
  12. 3.91% 60-mo CD at Melrose CU (account review)
  13. 3.80% 60-mo CD at Apple FCU (account review)
  14. 3.50% 60-mo CD at iGObanking (account review)
Best Local CD Deals as of 8/22/09: Some of the best CD deals are from banks and credit unions that don't offer accounts nationwide. Refer to the recap section and the state index section to find all the recent local deals. Here are some of the best deals to note.
  1. 5.00% 6-mo CD ($25K max) at Tyndall CU in Panhandle FL (account review)
  2. 2.50% 6-mo CD ($25K max) at STC Capital Bank in Chicago (account review)
  3. 2.50% 7-mo CD & 2.60% 11-mo CD at Fort Knox FCU in KY (account review)
  4. 2.59% 10-mo CD at Altana FCU in MT (account review)
  5. 3.00% 15-mo CD at Bartow County Bank in GA (account review)
  6. 3.05% 12-mo CD at Self Reliance New York FCU (account review)
  7. 3.00% 12-mo & 3.25% 24-mo CD at Jefferson Financial CU in Louisiana (account review)
  8. 2.58% 12-mo CD at Fort Bragg FCU in NC (account review)
  9. 2.50% 12-mo CD at Eastman CU in Several States (account review)
  10. 2.27% 12-mo CD at American Plus Bank in Southern CA (account review)
  11. 2.65% 18-mo CD & 2.40% 11-mo CD at Island FCU in NY (account review)
  12. 3.25% 27-mo CD & 2.50% 15-mo CD at Enterprise Bank of SC (account review)
  13. 3.00% 24-mo CD at Texas Security Bank in TX (account review)
  14. 4.00% 36-mo Add-On CD & 2.75% 18-mo CD at Darby Direct in GA (account review)
  15. 3.25% 42-mo CD at Regions Bank in Several States (account review)
  16. 4.15% 60-mo CD at Neighborhood CU in TX (account review)
  17. 4.07% 60-mo CD at United Community CU in IL & MO (account review)
  18. 3.75% 60-mo CD at Fidelity Bank of Florida (account review)
Reward Checking Accounts

I reported on five new reward checking accounts this week with rates from 3.05% APY to 5.10% APY. All five are local deals.

The blogger TFB at The Finance Buff did a good analysis of reward checking accounts in his post titled Will Reward Checking Last In the Long Run?. He described data from BancVue which shows that debit card usage may not be a significant factor in allowing banks to maintain the high rates. Small banks that can't expand their loans will likely be forced to lower rates or reduce the availability. This has happened, but many older reward checking accounts have been able to keep rates 1 to 2 percent higher than the average online savings account rates. As you can see in my reward checking stats, banks that had been offering reward checking accounts in 2007 have below average rates. However, the average rate as of August 16th is 3.45% APY which is much higher than the rate of any online savings account.

To see all of the high yield reward checking accounts available throughout the nation, please refer to my High Yield Checking website.

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

Banking News

Savings Accounts - National

CD Deals - National

Checking/Savings 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 at this page. Quick Links: Refer to the following links for the savings accounts and CDs that interest you: Liquid Account Rates: Savings Accounts, Reward Checking, 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 August 22, 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)

Edit 8/23/09: Added clarification on Citibank's early withdrawal penalty.

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