Bank Deals Weekly Summary for July 10, 2010

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Jul 10, 2010 - 7:39 PM by Ken Tumin

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There was speculation this week that the Fed may be considering ways to provide more support for economic activity. That could be bad news for us savers who are hoping to see higher interest rates at some point in the not-so-distant future. This Washington Post article discussed some possible Fed strategies. Here's one involving the Fed funds rate:

One pro-growth strategy would be to strengthen language in Fed policy statements that the central bank's interest rate target is likely to remain "exceptionally low" for an "extended period."

I guess we can be thankful that they can't reduce the rate below zero. This speculation appeared to have an effect to the Fed Funds futures. The Fed funds futures are now showing the implied probability of a higher Fed funds target rate by December at 8.1% which is down from last Saturday when it was 12.9%.

It's bad enough that our deposit rates are so low. We don't need banking fees on top of that. With the recent regulations, banks are planning new fees. The Consumer Reports Money blog described what a bank consulting firm is recommending:

A consulting firm that recommends banks "fire" unprofitable customers has advice for the industry: Dump free checking, add fees, and say "bye-bye" to those customers who don't keep big balances in their checking accounts or don't want to pay those fees.

We'll have to be on the lookout for account changes that could lead to more fees. Wells Fargo recently announced how they're replacing free checking with "Value" checking which has a $5/month fee.

The FDIC is back to its active Fridays after the holiday break. Four small banks failed yesterday (two in Maryland, one in New York and one in Oklahoma). The FDIC wasn't able to find a buyer for one of the four banks, so there may be some depositors who will lose uninsured deposits. In my bank failure review, a reader pointed out this FDIC tool that depositors of failed banks can use to determine if they might have any uninsured deposits. For depositors who would like to have this assurance for their active banks, the closest thing we have is the FDIC Electronic Deposit Insurance Estimator (EDIE). It won't guarantee that you are fully insured since there are gotchas that could affect your coverage such as how the banks title your accounts.

Discussion Forum and the Sweepstakes

On June 16th, we at DepositAccounts.com began a sweepstakes to encourage more participation in our new discussion forum. You can win up to $250 by just posting reviews in our Bank and Credit Union Reviews forum. July 15th is the last day to enter. Please refer to the announcement post for the full details.

If the discussion forum is too complicated for you, just bookmark this forum page. This shows the post titles of the latest updated posts in a format similar to a blog. I am able to publish more forum posts than blog posts since the forum makes it easier and quicker to post. Also, readers can contribute. I'll continue to publish the best bank deals and the most important bank news in the blog, but if you want to be up-to-date on all the deals and news, make sure you keep an eye on the forum.

Savings Account Rates

This was a quiet week for savings accounts. There were no rate changes for any of the top savings accounts. For balances under $50K, the best deal continues to be SmartyPig with a 2.15% APY. With Compass BBVA soon becoming SmartyPig's bank which holds the deposits, it's my guess that they will want to hold this rate for a while. How can SmartyPig offer this rate, and why do they have the $50K cap? I discussed the issue in this forum thread that reviewed a recent New York Times article.

Rate Hikes:

  1. None

Rate Cuts:

    None

Certificate of Deposit Rates

This was also a quiet week for CD rates with few rate changes.

Last Saturday I thought we had a new nationwide credit union with hot CD rates including a 4.00% 5-year CD. Before the Fourth of July weekend, readers reported being able to join Police and Fire Federal Credit Union (PFFCU) via an easy-to-join association. Unfortunately, this didn't last long. As I reported this week, PFFCU added another requirement. Members of that association must also be residents of either PA, NJ or DE.

This week I reported on a new add-on CD that's available nationwide. As I described in this post, add-on CD rates have not held up well in the last year. Even with the low rates, you may still want to consider them. For example, the 2-year add-on CD at Northwest FCU has a 1.46% APY with a $500 minimum and no limits on add-on deposits. With regular 2-year CDs with 2% yields, this add-on CD may not look appealing. As one reader mentioned, you can think of this like an insurance policy for $500. It provides some protection if rates continue to drop. If rates go up, you are just losing a little bit of interest with $500 in this CD.

Reward Checking Accounts

I only reported on one new reward checking account this week. The reward checking account is available at Freestar Bank in Illinois, and it pays 4.00% APY on balances up to $25K. This account has some unique monthly requirements that I haven't seen before. The main downside with these reward checking accounts is the monthly requirements, and if you're not careful in learning the rules, there may be months in which you'll earn very little interest. One reader described how his large deposit at ViewPoint Bank earned practically no interest in June due to not meeting requirements in May.

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/Resources

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 July 10, 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, Sunday, July 11, 2010 - 7:11 PM

I really appreciate all the effort which goes into this site. However, the stark reality is that we are a nation run by and for the banking industry. The banks were essentially the entities which wrecked this economy, by taking ridiculous risks on bad loans. So we the people had to bail them out, and now they are mostly doing very well, investing our money in the stock market, buying assets, etc. The Fed reduced the fed funds rate to about 0%, where it has stayed for almost two years, and shows no sign of going up. Banks are making a fortune on being able to obtain almost free money and lending it out or investing it. We the consumers/would-be savers, can't save anything on CD rates. Now the banks are going to find ways to take even more money from us in the form of tricky and often hidden fees and costs.

It seems to me that the banks should start charging people 2% or so a year on their accounts. That way, before too long, the banks will have all of our money, rather than having it trickle more slowly to them. Or eveyone could take their money out of the banks, which would of course risk having it stolen by robbers and thieves, but the stealilng would at least be out in the open, and sometimes the robbers and thieves would get caught and punished.


1
theteach

theteach - #2, Sunday, July 11, 2010 - 7:48 PM

Whether it's by design or not, the government and private banks are looking to reward those who will put their capital at risk in the market. In their minds, they need our savings, not in a bank, but in the market to help throw money at the problem. Unfortunately, us savers are getting killed in this market. Traders are making a killing, as this is truly a trader's market with the volatility of all the down and upswings.

 

Lou


1

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