ETrade advertised heavily in yesterday's Super Bowl. They came out with more of those talking baby commercials. Did you notice that they didn't mention ETrade Bank? As you can probably tell just by looking at ETrade Bank rates, all the focus is on their brokerage and not the bank. ETrade has mentioned this in their quarterly results. Here's what MarketWatch reported after ETrade released its latest quarterly results:
E-Trade built a banking business too and this part of the company has suffered as the housing crisis left it with big mortgage-related losses. E-Trade is now trying to shrink its banking business to focus on its main brokerage unit.
Based on ETrade Bank's deposit rates, they should be doing a good job at shrinking their banking business. Their 3-month CD is currently paying an extremely low 0.01%. That's one-hundredth of a percent! Even their 5-year CD rate is very low at 1.10%. I hope no one is letting their CDs automatically renew.
ETrade Bank's Complete Savings Account used to be a very competitive online savings account, but that changed in 2009. By May 2009 the rate had fallen to below 1%, and by October the rate had fallen to its current level of 0.50%. As a comparison, ING Direct's Orange Savings Account (which has never been a rate leader) is currently 1.20% APY.
What's disappointing is that ETrade Bank has lots of nice internet banking features such as its ACH bank-to-bank transfer service which it calls Quick Transfer. The transfers are fast, they don't place small limits on the amount that can be transfered and it's easy manage links to the external accounts (although there is an issue with a lifetime limit on the links). So I'm sorry to see ETrade give up in keeping competitive rates.
I was glad yesterday's Super Bowl wasn't a blow-out. I remember many past Super Bowls when the game was won by the third quarter, and for the rest of game the teams basically gave up competing. Watching ETrade Bank reminds me of watching the last quarters of those past Super Bowls.
Edit: fixed some typos