Bank Deals Weekly Summary for March 27, 2010

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Mar 27, 2010 - 5:59 PM by Ken Tumin

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

When will interest rates rise? As I mentioned last week after the March Fed meeting, the Fed continues to say the same thing about future rates "exceptionally low levels of the federal funds rate for an extended period." This OC Register article provided the opinions from experts on this question. Bond fund manager, Bill Gross, thinks it could be December if job growth continues:

Typically the Fed raises rates 6 months after the year-over-year growth in jobs crosses into positive territory . If the next 3 months show job growth of 150,000 jobs on average, then June would be that point - and December would be the first hike

Others quoted in the article think we'll soon see a slow rise in long-term interest rates due to the Fed halting their purchases of mortgage and Treasury bonds. As this Seeking Alpha article described, this may already be happening as low demand for the 10-year Treasury was causing yields to rise.

Four small banks failed on Friday which puts the total bank failures for the year at 41. That should be the total for the first quarter as March ends next week. It's a sizable rise compared to the first quarter of last year when 21 banks failed.

Friday's bank failures were typical with the FDIC finding buyers for all four closed banks. We saw 3 banks fail in March in which the FDIC wasn't able to find buyers. That was a bit higher than it has been in the last couple of years. We'll see if this trend continues.

Savings Account Rates

The big rate cut this week actually hasn't happened yet. Several readers have been told by Alliant Credit Union reps that the savings account rate will be cut from 2.00% to 1.50% APY effective April 1st. Rate information for the next month typically leaks out after Alliant's board meets and approves next month's rates. This will end a streak of 9 months in which Alliant has kept its savings account rate at 2.00% APY. I'm sorry to see this rate cut, but keep in mind that 1.50% APY is competitive these days (unfortunately). On the plus side, Alliant is now easier to join as I described on Tuesday.

One bit of good news came from 1st Constitution Direct which started offering 1.50% APY on its savings account for new accounts only. Previously, it was offering a 1.25% APY guaranteed for 3 months. I no longer see this 3-month guarantee mentioned on its web page.

It's hard to get excited about a 1.50% APY. I still have a few banks and credit unions on my list below that are offering savings and non-reward checking accounts above 1.50% APY, and three banks continue to offer non-promo 2% savings account rates.

Rate Hikes:

  1. 1st Constitution Direct Savings - 1.50% for new customers (was 1.25%)

Rate Cuts:

  1. Alliant CU Savings - 1.50% starting Apr 1st (now 2.00%)
  2. Bank of Internet Savings - 1.40% (was 1.50%)
  3. Bank of Internet MMA - 1.35% (was 1.45%)
  4. Wings Financial CU MMA - 1.31% $5K (was 1.41%)
  5. Bank of Internet Advantage Savings - 1.30% (was 1.40%)
  6. Intervest MMA - 0.99% $2.5K (was 1.01%)
  7. Charles Schwab Savings - 0.50% (was 0.75%)

Certificate of Deposit Rates

There was also some bad news from Alliant Credit Union in regards to CD rates. Alliant Credit Union slashed its 1-year CD rate by 35 basis points. The new 1-year Jumbo CD yield is now 1.75% APY. Rates fell by 10 basis points for most of the longer terms. However, there was one exception. The 2-year CD rate actually went up. The Jumbo yield is now 2.25% APY which is 15 basis points higher than before.

One of the best deals for long-term CDs continues to be at Pentagon Federal Credit Union. Note that PenFed often changes rates at the start of new months, so these rates may not continue into April.

Another good long-term CD deal continues at Ally Bank. The 5-year CD rate is much lower than what PenFed offers, but Ally's early withdrawal penalty of only 60 days of interest is much lower than PenFed's 6-month penalty. This can help reduce the risk of being stuck in a low yielding CD if rates shoot up in the next couple of years. There have been many conflicting reports about the possibility that Ally could increase this penalty on existing CDs. I've been reassured once more from Ally's Director of Public Relations that this would not happen. You should be able to get confirmation on this from Ally CSRs (see post).

Below are some of the best nationwide and local CD deals that are still active.

Best Nationwide CD Deals as of 3/27/10: Also listed are savings account promos with rate guarantee periods. The full list of nationwide CD rates is farther down.

  1. 2.25% 3-mo money market/checking promo at EverBank (account review)
  2. 2.07% 12-mo CD at Melrose Credit Union (account review)
  3. 2.00% 12-mo CD at Southeast Financial FCU (account review)
  4. 2.50% 15-mo IRA-only CD at Dime Savings Bank (account review)
  5. 1.95% 15-mo CD at Franklin Synergy Bank (account review)
  6. 2.25% 24-mo CD at Alliant CU (account review)
  7. 3.00% 36-mo CD at Pentagon FCU (may change in April) account review)
  8. 3.00% 26/49-mo CD Package at SunTrust Bank (account review)
  9. 3.60% 60-mo CD at Apple FCU (account review)
  10. 3.55% 60-mo CD at Melrose CU (account review)
  11. 3.50% 60-mo CD at Pentagon FCU (may change in April) (account review)
  12. 3.09% 60-mo Small-Penalty CD at Ally Bank (account review)
  13. 4.25% 84-mo IRA CD/4.00% CD at Navy FCU - Limited Membership (account review)
  14. 4.06% 84-mo CD (min $175K) at USAA Bank (account review)

Best Local CD Deals as of 3/27/10: 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. 2.30% Money Market Account (min $100K) at Georgia Primary Bank in Atlanta (account review)
  2. 2.02% Money Market Account at South Florida FCU (account review)
  3. 2.02% 11-mo CD at First Citizens Bank in South FL (account review)
  4. 2.00% 11-mo CD at First Citizens Bank in SoCal (account review)
  5. 2.06% 12-mo CD w/chk at Chartway FCU in VA, GA, RI, NC, TX, FL & NJ (account review)
  6. 2.01% 13-mo CD at Prudential Savings Bank in PA (account review)
  7. 2.50% 22-mo & 2.00% 13-mo CD at Fort Knox FCU in KY (account review)
  8. 3.20% 44-mo CD at Crescent Bank & Trust in Louisiana (account review)
  9. 4.00% 60-mo CD at PFFCU in Philadelphia (account review)
  10. 3.50% 60-mo CD at City National Bank in NY, NJ & PA (account review)
  11. 3.56% 72-mo CD at Broadway Federal Bank in Los Angeles (account review)
  12. 4.25% 10-year Flex-CD at First Choice CU in Florida (account review)

Reward Checking Accounts

This was a slow week for new reward checking accounts. I only reported on one new one. The bank is in Tennessee, and it offers a rate of 3.51% APY on balances up to $30K. I reviewed the issue of meeting the debit card usage requirements with small purchases on Monday. As I mentioned on Monday, if customers don't make enough big purchases, the banks won't get much revenue from merchant fees, and it'll make it harder for the banks to keep the rates high. However, as I mentioned on Thursday, the average household spent over $37K last year on non-mortgage/rent expenses. If reward checking accounts can attract people who spend like this and who switch completely from credit card to the debit card, this will be good news for us savers who know the tricks and take the time to maximize the rewards in reward checking.

To see all of the high yield reward checking accounts available throughout the nation, please refer to the reward checking section of DepositAccounts.com.

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

Banking News

CD Deals - National

Savings/Checking Accounts - Nationwide

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 under $100,000. 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 March 27, 2010

Checking/Savings/Money Market Accounts:

  • Noteworthy Accounts Available Nationwide:

3-Month Certificates of Deposit:

  • Noteworthy Accounts Available Nationwide:

6-Month Certificates of Deposit:

  • Noteworthy Accounts Available Nationwide:

9-Month Certificates of Deposit:

12-Month Certificates of Deposit:

  • Noteworthy Accounts Available Nationwide:

18-Month Certificates of Deposit:

  • Noteworthy Accounts Available Nationwide:



24-Month Certificates of Deposit:

  • Noteworthy Accounts Available Nationwide:

36-Month Certificate of Deposit:

  • Noteworthy Accounts Available Nationwide:

48-Month Certificate of Deposit:

  • Noteworthy Accounts Available Nationwide:

60-Month Certificate of Deposit:

  • Noteworthy Accounts Available Nationwide:

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)


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