Best Bank Account Interest Rates - Summary for July 31, 2010

Comments (5)
Jul 31, 2010 - 6:47 PM by Ken Tumin

Best Bank Account Interest Rates - Summary for July 31, 2010

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Yesterday's GDP report wasn't good news for our future deposit rates. According to the LA Times Money & Company blog:

The economy’s 2.4% annualized real growth rate last quarter, down from a revised 3.7% rate in the first quarter, is cementing many bond investors’ expectations that the Federal Reserve won’t be raising short-term interest rates for a long time to come.

I think it's safe to say we're not going to see a Fed rate hike this year. The Fed funds futures are now showing the implied probability of a higher Fed funds target rate by December at 3.2% which is down from last Saturday when it was 5.5%. The implied probability for a higher rate by June 2011 is 52.3% which is down from last Saturday when it was 56.8%.

Savings Account Rates

We just had two banks on my top savings account list cut rates this week. With a new month next week, hopefully, we won't see more cuts. At least we know Alliant will continue offering 1.50% APY on its savings and checking accounts through August.

I reported on a good money market deal being offered by EverBank. In addition to the 2.25% 3-month intro rate, EverBank is also offering a $50 cash bonus if you open its Yield Pledge Money Market Account with at least $20K. You can also get a $25 bonus if you open its FreeNet Checking with at least $10K. The ongoing money market rate remains competitive at 1.26% APY, so it may be an account that you'll want for the long-term (see review for full details).

Starting tomorrow SmartyPig's deposits will officially be held by BBVA Compass. SmartyPig continues to offer the top savings account rate of 2.15% APY. However, this is limited to a $50K balance (rate goes down to 0.50% for entire balance if balance goes over $50K). I would guess SmartyPig is likely to keep this rate for a while since it wouldn't look good to cut rates around the time they transition deposits to BBVA Compass.

Rate Hikes:

  1. None

Rate Cuts:

  1. Clear Sky Accounts Savings - 1.30% (was 1.40%)
  2. Clear Sky Accounts Checking - 1.25% $25K+ (was 1.35%)
  3. Newtown Savings Bank Savings - 1.15% (was 1.30%)

Certificate of Deposit Rates

In this Wednesday post, I asked if CDs were better than savings accounts in this low interest rate environment. No one wants to lock into these low rates for a long period of time. The problem is no one knows how long these rates will last. So you may not want to put all of your bets that interest rates will rise in the next year.

Two credit unions with top CD yields reduced the availability of their CDs. Fort Knox FCU started to restrict access to its two CD specials (including the 2.30% APY 23-month CD) to members in KY, IN and TN. Police and Fire FCU in Philadelphia is now only allowing Pennsylvania members of the Weavers Way Cooperative Association to qualify for credit union membership. It looks like if you live outside of PA, the credit union doesn't want you.

Fortunately, there are several credit unions that continue to make it easy for anyone to join and open their CDs and IRA CDs. Alliant Credit Union and Melrose Credit Union are in this group, and they both continue to offer very competitive CD rates. Hopefully, they'll continue into August.

But in my opinion, the best CD deal is not at a credit union. It's at Ally Bank which continues to offer a 2.94% APY 5-year CD with only a 60-day early withdrawal penalty. 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

Credit unions are not the only institutions reducing availability of their accounts. ViewPoint Bank is now restricting its 4.00% APY reward checking account with a $50K balance cap account to Texas residents.

If you have decided to use reward checking accounts instead of CDs for your savings, you may want to reconsider putting all of your eggs in the reward checking basket. I'm very glad we have reward checking accounts with many paying 4% or more. I hope this lasts, but banks may be under pressure to lower rates and/or balance caps as the new regulations on overdraft fees and debit cards take full effect over the next year.

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

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 July 31, 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
tightwad

tightwad (anonymous) - #1, Saturday, July 31, 2010 - 10:26 PM

I'm worried about what's to come this week. I even pulled some RCA money and locked into long, slightly lower rate CD's Friday. I will probably wish I had converted more.


2
Anonymous

Anonymous - #2, Saturday, July 31, 2010 - 10:45 PM

Why would enybody buy money fund!

They all have some sort of management fees and your acctual return will be negarive.


1
Anonymous

Anonymous - #5, Sunday, August 1, 2010 - 11:25 AM

I am confused about the comments today that it is more difficult to get into fort knox fcu.  I went to their website.  It says you can join if you join the american consumer council for free.  It doesnt say anything about where you must live or anything about joining the "Kentucky" american consumer council.  I have joined other credit unions via the ACC without problem.  I wonder if Ken would comment on this further or anyone else who has experience or knowledge of the situation.  Thanks


1
Anonymous

Anonymous - #6, Sunday, August 1, 2010 - 11:53 AM

Ken did not say that you could not join Fort Knox FCU.  He said that Fort Knox FCU would not let you buy their special rate cds unless you lived in their area.  Learn to Read!


2
Anonymous

Anonymous - #9, Monday, August 2, 2010 - 6:44 AM

Anonymous #2 is incorrect about a negative money fund yield.  Listed yields are net and most companies are waiving fees to make sure they aren't negative.  Still a poor choice with several savings accounts above 1%.


2

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