Bank Deals Weekly Summary for May 15, 2010

Comments (1)
May 15, 2010 - 7:18 PM by Ken Tumin

With Europe's debt problems continuing, the odds that we'll see a Fed Funds rate hike this year are diminishing. This was suggested by Chicago Federal Reserve Bank President Charles Evans on Friday according to this Reuters article. These European problems are strengthening the dollar against the Euro and can hurt US exports. Both give the Fed more leeway to keep rates low. The reduced chance of a rate hike is also seen in the Fed Funds futures. It's showing the chance of a rate hike in the November FOMC meeting at 31.3% which is down from 43% when I reported on this last Saturday. For December's FOMC meeting, the Fed Funds futures indicate a probability of 41.6% for a rate hike.

Low interest rates are not the only concern for savers. The Senate passed an amendment to the financial reform bill that could make it harder for banks to offer high-yield reward checking accounts.

There's not much savers can do about interest rates, but there are a few things the government could do that can help savers at least a little without too much cost. As I mentioned in this February post, the U.S. could follow Canada's example with the Tax Free Savings Account. This is like the Roth IRA except that you can use the savings for anything at anytime. I'm happy to see this get a little publicity with this Mint.com article.

Savings Account Rates

On a positive note, this was another week without too many savings account rate cuts. The big disappointment was at Bank of Internet USA which did another 20 bps rate cut on its savings and money market accounts. These accounts had remained very competitive during the last year, but the top savings account rate is now only 0.90%.

Another disappointment were rate cuts on two nationwide reward checking accounts. I have more info on these in the reward checking section below.

For those with SmartyPig accounts, don't forget that next week (May 19th), SmartyPig will be adding a harsh rate tier. If the total of your goals is over $50K, the yield will fall from 2.15% to 0.50% on your entire balance (not just on the balance above $50K).

Rate Hikes:

  1. None

Rate Cuts:

  1. The Bank of Fayetteville Reward Checking - 2.75% (was 3.20%)
  2. City National Bank Reward Checking - 1.35% (was 1.68%)
  3. Dollar Savings Direct Savings - 1.20% (was 1.30%)
  4. Bank of Internet Savings - 0.90% (was 1.10%)

Certificate of Deposit Rates

CD rates continue to trend down. I no longer have a 2% 12-month CD or a 3.50% 60-month CD on my nationwide CD lists. RiverLand FCU had been offering a 3.50% 5-year CD, but they had major cuts this week.

A reader reported being told by a SunTrust branch manager that the special 3 percent CD was going to end on Friday. I'm happy to report that it's still listed on the SunTrust website as of today. I confirmed this today with a SunTrust CSR. However, he couldn't give me any clues about when it may end. Hopefully, it will continue to be listed into next week. It's an unusual CD that requires you to open a 26-month CD and a 49-month CD with equal deposits. Both CDs have a 3.00% APY. A 3.00% APY for a 26-month term is a hot deal. It's not a hot deal for the 49-month CD, but it is competitive. I did a new post on this CD today with details on the CD's early withdrawal penalty.

Another good deal continues at Broadway Federal which still has a 2-year internet CD with a 2.53% APY.

Reward Checking Accounts

I reported on two new reward checking accounts this week with yields of 3.50% for up to $10K and 4.25% for up to $25K. Unfortunately, the $10K balance cap is becoming more common. Banks that are keeping large balance caps have been cutting rates. There were two examples of this from banks that offer their reward checking accounts nationwide. The Bank of Fayettville which has a $50K cap lowered its rate this week from 3.20% to 2.75% APY. City National Bank in Texas applies its bonus rate on all balances without any cap. Unfortunately, this bonus rate is no longer any better than rates at several online savings accounts. The yield was cut this week from 1.68% to 1.35% APY.

Another way banks can make it harder on savers is to drop customers who don't spend enough on their debit cards. An example of this happened this week at Hyperion Bank in Philadelphia. A reader who was spending between $10 and $20 a month had her account converted to a free checking account.

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

Savings/Checking Accounts - Nationwide

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. 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 May 15, 2010

Checking/Savings/Money Market Accounts:

  • Noteworthy Accounts Available Nationwide:
  • Noteworthy Accounts - Local Only

3-Month Certificates of Deposit:

  • Noteworthy Accounts Available Nationwide:
  • Noteworthy Accounts - Local Only

6-Month Certificates of Deposit:

  • Noteworthy Accounts Available Nationwide:
  • Noteworthy Accounts - Local Only

9-Month Certificates of Deposit:

  • Noteworthy Accounts - Local Only

12-Month Certificates of Deposit:

  • Noteworthy Accounts Available Nationwide:
  • Noteworthy Accounts - Local Only

18-Month Certificates of Deposit:

  • Noteworthy Accounts Available Nationwide:
  • Noteworthy Accounts - Local Only



24-Month Certificates of Deposit:

  • Noteworthy Accounts Available Nationwide:
  • Noteworthy Accounts - Local Only

36-Month Certificate of Deposit:

  • Noteworthy Accounts Available Nationwide:
  • Noteworthy Accounts - Local Only

48-Month Certificate of Deposit:

  • Noteworthy Accounts Available Nationwide:
  • Noteworthy Accounts - Local Only

60-Month Certificate of Deposit:

  • Noteworthy Accounts Available Nationwide:
  • Noteworthy Accounts - Local Only

84-Month Certificate of Deposit:

  • Noteworthy Accounts - Local Only

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 5/17/2010: Updated USAA CD rates. The previous rates were based on an orphaned USAA Bank rates page.


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Dan

Dan (anonymous) - #1, Wednesday, May 19, 2010 - 8:37 AM

Danvers bank has cut to 1.00%


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