Bank Deals Weekly Summary for May 22, 2010

Comments (3)
May 22, 2010 - 7:39 PM by Ken Tumin

The government released the consumer price index data for April this week. According to the government, the CPI-U declined 0.1% in April on a seasonally adjusted basis. This was the first drop in more than a year, and most economists were predicting a 0.1% increase. I'm afraid this gives the Fed more leeway to delay hiking rates.

Another factor that could cause rate hikes to be delayed is the debt crisis in Greece. Worries about Europe will keep the dollar stronger and increase the demand for Treasuries. The 10-year Treasury yields are about 50 to 75 basis points lower than they were in April.

Based on the Fed funds futures the implied probability that the Fed will hike rates by November is down from 43% to 25%. For December the implied probability is 42%.

Deposit yields may be low, but at least we know our federally insured deposits are safe. That can't be said for stocks. We were reminded of that in the last few weeks. The Dow lost 4% just this week. The experts say a well-diversified stock portfolio will perform the best over the long term. After the last 10 years, I'm having doubts.

The FDIC released its first quarter report on the banking industry on Thursday. The number of problem banks rose to 775, up from 702 at the end of 2009.

Only one bank failed on Friday. It was a small bank in Minnesota. There was also a tiny credit union failure this week in New York.

Savings Account Rates

The big savings account news this week was at WTDirect which launched a very attractive new-account promo. They're offering a $500 bonus for keeping $50K in the WTDirect savings account from 6/15 to 9/15. That's 1% in 3 months which effectively adds 4% to their standard annualized yield (which is currently 1.16% APY). The 1% bonus also applies to lower balances in intervals of $10K. So for a $10K balance, the bonus will be $100. Please refer to my WTDirect savings account and bonus review for more details. Update 5/24/10: WTDirect's promotion has expired.

This was the week that SmartyPig's new rate and balance cap took effect. Remember that if the total balance of all your goals is above $50K, you'll only earn 0.50% APY on your entire balance. At or below $50K, the rate is 2.15% APY. This rate structure is very rare in the banking industry, and it's the opposite of the typical rate tier in which a larger balance is rewarded with a higher rate on the entire balance. I don't want any SmartyPig customers being hurt by this change.

This was another week of only a few rate cuts. On the downside, a former rate leader had its second rate cut in only one week. The savings account rate at Ready Saver fell from 1.75% to 1.50% APY. I hope this doesn't continue. Another disappointment was at Danversbank which cut the rate on its online savings account from 1.35% to 1.00% APY.

Rate Hikes:

  1. WTDirect Promo - 1.16% + up to $500 bonus
  2. SmartyPig Savings Account - 2.15% for up to $50K (was 2.01% all balances)

Rate Cuts:

  1. Ready Saver Savings Account - 1.50% (was 1.75%)
  2. Danversbank Savings Account - 1.00% (was 1.35%)

Certificate of Deposit Rates

I'm afraid CD rates overall continue to trend down. There weren't a lot of rate cuts, but unfortunately, most of the rate cuts came from former rate leaders. The largest cut was at iGObanking.com which slashed its 60-month CD rate from 3.25% to 1.00% APY. The 48-month CD rate was also slashed from 2.92% to 1.00% APY. It should be noted that iGObanking has a history of making large rate changes. So this cut shouldn't be attributed to the interest rate environment. It does show the importance of not letting your CDs automatically renew.

Other notable CD rate cuts were at EverBank, Fort Knox FCU and Northwest FCU.

Two good CD deals that continue for at least today are the 1.95% APY 14-month CD special at North American Savings Bank and the 2.53% APY 24-month CD special at Broadway Federal Bank.

In addition to the 2.53% APY 2-year CD which is an internet CD, Broadway Federal offers some competitive longer term CDs. One is a 2.79% APY 3-year CD and a 3.56% APY 6-year CD. I learned this week that these longer term CDs are available nationwide. They can't be opened online, but I was told by a Broadway Federal CSR that they can be opened by mail from any state.

Reward Checking Accounts

I reported on four new reward checking accounts this week with yields ranging from 3.50% to 4.25%. The reward checking account with a 3.50% APY was recently launched by Westfield Bank in Ohio, and they are currently offering this nationwide. It has a standard balance cap of $25K. I'm happy to see another bank offering a nationwide reward 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 22, 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)


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no stocks 4 me

no stocks 4 me (anonymous) - #1, Sunday, May 23, 2010 - 9:06 AM

Yeah but remember this CPI stuff ONLY uses certain items, not the stuff most people actually buy, need, or pay for.

 Also the “down” figure of 0.1 isn’t all that believable coming from the CPI number jugglers, but I’m sure Uncle Ben is happy, and can continue saying “for an extended period”.


0
no stocks 4 me either

no stocks 4 me either (anonymous) - #3, Sunday, May 23, 2010 - 4:19 PM

"The experts say a well-diversified stock portfolio will perform the best over the long term. After the last 10 years, I'm having doubts."

That's good, because the Ponzi scheme that is the stock market has long since run out of suckers. Stocks are not futures contracts that have some real, physical value based on a real world deliverable that people need. The only "value" they have is what people decide that they have, much like the crap that MLM companies sell. The ever-increasing price behavior we've seen over the past 70 years or so (until 2000) was the behavior of a pyramid scheme, as more and more people, at first individuals, and then pension funds and the like, slowly trickled into the market. By now, nearly everyone who has the potential to be invested in the market already is, whether through individual stocks, mutual funds, or their retirement accounts. The pool of new chumps to lure in with promises of certain, sustained profit has run dry. This doesn't mean that one can't make money in the market, just that the buy-and-hold "strategy" is now a fool's errand. Anyone who thinks that the coming years will look anything like pre-2000 is completely kidding themselves.


2
Sandra

Sandra (anonymous) - #4, Sunday, May 23, 2010 - 7:07 PM

The CPI-U for April is 218.009. For March, it was 217.631 . That is a .17% increase, not a decrease. I don't get it.  Check it out for yourself  at ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt

For the year April 09 to April 10, inflation was 2.24%.


2

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