Bank Deals Weekly Summary for June 12, 2010

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Jun 12, 2010 - 7:05 PM by Ken Tumin

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Bernanke provided a few clues in his Wednesday testimony before the House Budget Committee on what we may see in terms of future monetary policy. In his questions and answers portion of the testimony, Bernanke stated:

Right now I don't think is the time -- this very moment is not the time -- to radically reduce our spending or raise our taxes because the economy is still in recovery mode and needs that support

He did stress lawmakers needed to start planning to reduce the government's budget deficit. However, he implied now is not the time. It seems likely that he and the FOMC will follow this on monetary policy with the current record low Fed funds target rate. Bernanke also stressed how improvements in unemployment will be slow:

In all likelihood, however, a significant amount of time will be required to restore the nearly 8 and a half million jobs that were lost over 2008 and 2009.

I'm afraid the chance of a Fed rate hike this year is declining. This can also be seen in the Fed funds futures which show the implied probability of a higher Fed funds target rate by December at 31.5% which is down from last Saturday when it was 37%.

It was a quiet Friday for the FDIC with only one bank that failed, Washington First International Bank in Seattle, WA. That raised the number of 2010 bank failures to 82. There was also a credit union liquidation this week. A tiny credit union in Texas was liquidated which brings the total credit union liquidations this year to 9. For both cases, the FDIC and NCUA were able to find buyers which assumed all of the deposits.

Savings Account Rates

One bit of news for savings accounts this week was on Monday when SmartyPig announced their partnership with BBVA Compass. SmartyPig deposits have been held at West Bank, but SmartyPig outgrew West Bank. Starting August 1st, SmartyPig deposits will be held at BBVA Compass (see post for details). SmartyPig continues to offer the best non-promo savings account rate with a 2.15% APY on balances under $50K.

There were two disappointments this week. Clear Sky Accounts and New Dominion Direct cut their savings account rates from 1.50% to 1.40% APY. The number of savings accounts with rates over 1.40% continues to trend down. At least there appears to be some holding on rate cuts for savings accounts with yields around 1.30%. This includes Ally Bank, Discover Bank and Capital One which have kept rates around 1.30% for the last several months.

Rate Hikes:

  1. None

Rate Cuts:

  1. Clear Sky Accounts Savings - 1.40% (was 1.50%)
  2. New Dominion Direct Savings - 1.40% (was 1.50%)

Certificate of Deposit Rates

One hot nationwide CD that I just found out about a few hours ago is the new CD at Incredible Bank. A reader noted the CD this afternoon in the forum. The CD has an unusual feature in how the rate goes up in the middle of the term. The first six months it earns 1.75% APY, and the second six months it earns 2.25% APY. The blended APY for the year should be about 2.00%. I first reported on Incredible Bank in November 2009 when they launched their 2.02% APY internet checking account. After 7 months, the checking account still pays a very competitive 1.53% APY. It's nice to see them adding a new product that's very competitive.

Two former CD rate leaders made cuts to their CD rates this week. Broadway Federal slashed its CD rates. It had been offering a very competitive 2.53% APY 24-month internet CD. This is now way down to 1.51% APY. A long-term CD rate leader, Acacia Federal Savings Bank, cut its CD rates by 10 basis points. Its 4-year CD rate is now 2.90% APY. For terms of 18-months to 4-years, Alliant Credit Union continues to offer some of the best deals with rates ranging from 2.00% APY for the 18-month Jumbo CD to 3.00% APY for the 48-month Jumbo CD.

Ally Bank made a small rate cut on its 60-month CD. The yield is now 2.95% APY. What makes this such a good deal is that it only has a 60-day early withdrawal penalty. If rates rise during the 5-years, you can do an early closure with minimal cost. I first reviewed this deal in January when the rate was 3.15% APY. It's nice to see the rate hasn't dropped much since then. However, this feature is getting more attention with recent reviews by the New York Times blog and by other popular personal finance blogs. So that may put downward pressure on the rate. For those concerned about the possibility of the penalty being increased on an existing CD, please refer to my investigation on this issue.

Reward Checking Accounts

I only reported on one new reward checking account this week. It's one of the few which still offers 4.00% APY on balances up to $25K. It's being offered at Southwest Airlines FCU which unfortunately has a membership primarily based on select employer groups.

One reader has provided me details of his recent applications for two of the best nationwide reward checking accounts at ViewPoint Bank (4.00% APY up to $50K) and at Danversbank (4.00% APY up to $25K). As many have experienced, he had problems in his application with ViewPoint, but after much preserverance, he's nearing the end of the application process. It has been much easier at Danversbank. He described Danversbank's application process to be smooth and pretty impressive. Hopefully, both banks will be able to maintain the 4.00% yield.

One bank that had been a nationwide rate leader announced a major change for customers who are based outside its market area. A reader mentioned in the forum that Countybank announced that customers based outside its home territory of upstate South Carolina will earn only 0.75% APY on balances up to $15K. This is a huge drop from 4.01% APY which still remains for the local customers, and it shows that it's better if you can find a local bank or credit union with a reward checking account.

To find both reward checking accounts local to you and those available nationwide, 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, 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, Comments: read and discuss

As of June 12, 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

Bank Account Alternatives

Historical Rates from the Federal Reserve (Federal funds, Treasury bills, CD's)


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Anonymous

Anonymous - #1, Saturday, June 12, 2010 - 10:36 PM

You should also add Melrose CU for 24-mo, 36-mo & 48-mo as well

24-mo : 2.02% APY

36-mo : 2.52% APY (2nd highest after EBSB)

48-mo : 2.78% APY


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