Best Bank Account Interest Rates - Summary for July 24, 2010

Leave a comment
Jul 24, 2010 - 7:01 PM by Ken Tumin

Best Bank Account Interest Rates - Summary for July 24, 2010

Jump to section:

This week we finally saw the $250K standard deposit insurance coverage become permanent with the President's signing of the financial reform bill. Those who had been hoping for this day have waited for almost two years since the $250K coverage was passed as a temporary measure. There was hope that it would become permanent last year, but the coverage was only extended for four years. This $250K coverage applies to both banks and credit unions.

Bernanke sparked some worries in his remarks to Congress on Wednesday. In his prepared testimony he warned "that the economic outlook remains unusually uncertain." He reiterated an economic forecast that was mentioned at the last FOMC meeting:

My colleagues on the Federal Open Market Committee (FOMC) and I expect continued moderate growth, a gradual decline in the unemployment rate, and subdued inflation over the next several years.

It's yet another indication not to expect any rate hikes for some time. The Fed funds futures are now showing the implied probability of a higher Fed funds target rate by December at 5.5% which is down from last Saturday when it was 7.8%. The implied probability for a higher rate by June 2011 is 56.8%.

Savings Account Rates

This was another quiet week for savings accounts. With so many rate cuts this year, it's good news when rates don't fall, and that's especially the case for a rate leader like Alliant Credit Union. This week it was reported that Alliant Credit Union will be keeping its 1.50% APY through August for both its savings account and its High Rate Checking. This checking account is on my list of the best checking accounts (non-reward) that are available nationwide.

We also had some good news at WTDirect which raised its savings account yield from 1.16% to 1.21% APY. It's not much, and the rate is still not that high compared to other accounts. Nevertheless, it's nice to finally see a rate hike.

Rate Hikes:

  1. WTDirect Savings - 1.21% (was 1.16%)

Rate Cuts:

  1. Nationwide Bank MMA - 1.15% (was 1.20%)

Certificate of Deposit Rates

We didn't see many CD rate changes this week. There were a few rate cuts. RiverLand Credit Union cut rates on several of its CDs. EverBank cut its 5-year CD rate.

In addition to top rates on savings and checking accounts, Alliant Credit Union continues to offer top rates on its CDs, especially its Jumbo CDs which require a minimum of $25K.

Melrose Credit Union also continues to offer some top rates. It currently has a big lead for the best nationwide 5-year CD rate with a 3.29% APY.

I added a few banks to the 6-month CD list including Flagstar Direct and NewDominion Bank. Both are offering a 1.25% APY for a 6-month CD. Unfortunately, this is a top bank rate for a 6-month term. I don't see much advantage of opening a CD like this when many savings account rates are at 1.25% APY and above. Savings account rates can go down, but even if they do, it's not going to make much difference in 6 months. For example, let's say the savings account rate falls from 1.25% to 0.75% APY in 6 months for an average yield of 1.00%. The difference in amount earned between this and a 1.25% 6-month CD for a $10K investment would only be about $12.50.

In my opinion, Ally Bank's 5-year CD continues to be the best deal for CDs available nationwide even if you prefer a 6-month CD. With only a 60-day early withdrawal penalty, an early withdrawal after 6 months would reduce the annualized yield during those 6 months from 2.94% to around 1.96% (2.94% x 120/180). In this post I described what the yield would be if you make early withdrawals of the 5-year CD at 1 to 4 years.

There have been concerns that Ally Bank could change the early withdrawal penalty during the term of an existing CD. There should be no chance of this based both on the account disclosure and based on the information from Ally's public relations director (see post).

Reward Checking Accounts

I reported on one new reward checking accounts this week. River City FCU in San Antonio is offering a reward checking with a 3.75% APY for balances up to $30K. The only downside is that it requires 15 debit card purchases a month. It's another example of a higher than average debit card usage requirement. The average used to be 10, but it appears this average has been increasing in the last year.

There was some good news at two credit unions which have been offering reward checking accounts for the last few years. Nassau Educators FCU expanded its field of membership giving many more New York state residents access to its 4.00% reward checking account. Another New York credit union, Northern FCU, has added another reward checking account which allows members to earn up to 4.51% rather than 3.01%. The downside is that it requires 5 more debit card purchases per month and the purchases must be at least $5.

If you can't find a local bank or credit union which offers a high-yield reward checking account, we're fortunate to have several banks and credit unions which offer reward checking nationwide. The best one is currently at Randolph Bank & Trust Company which has a 4.75% APY on balances up to $25K. I did a quick review of this bank and four other institutions that have the best rates for reward checking accounts available nationwide.

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

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. 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 24, 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)


Post a CommentComments
In order of date posted. - Sort by votes

Be the First to Comment


Post a Comment

Featured Savings Account
Nationwide Savings Accounts
Related Posts
Best Bank Account Interest Rates - Summary for Week Ending February 11, 2012Best Bank Account Interest Rates - Summary for Week Ending February 11, 2012
Best Bank Account Interest Rates - Summary for Week Ending February 4, 2012Best Bank Account Interest Rates - Summary for Week Ending February 4, 2012
Best Bank Account Interest Rates - Summary for Week Ending January 28, 2012Best Bank Account Interest Rates - Summary for Week Ending January 28, 2012
Best Bank Account Interest Rates - Summary for Week Ending January 21, 2012Best Bank Account Interest Rates - Summary for Week Ending January 21, 2012
Best Bank Account Interest Rates - Summary for Week Ending January 14, 2012Best Bank Account Interest Rates - Summary for Week Ending January 14, 2012
Best Bank Account Interest Rates - Summary for Week Ending January 7, 2012Best Bank Account Interest Rates - Summary for Week Ending January 7, 2012
Best Bank Account Interest Rates - Summary for Week Ending December 31, 2011Best Bank Account Interest Rates - Summary for Week Ending December 31, 2011
Best Bank Account Interest Rates - Summary for Week Ending December 24, 2011Best Bank Account Interest Rates - Summary for Week Ending December 24, 2011
Useful Resources