Best Bank Account Interest Rates - Summary for September 4, 2010

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Sep 4, 2010 - 8:03 PM by Ken - Bank Deals Guy

Best Bank Account Interest Rates - Summary for September 4, 2010

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Yesterday's job report numbers were weak, but they were better than expected. The growth in private payrolls exceeded estimates which reduced fears of a double-dip recession and increased optimism for a sustained economic recovery. Optimism actually started to return to the markets as September started. In the first three days of the month, the 10-year Treasury yields increased 22 basis points.

The optimism for economic recovery didn't carry over into the Fed funds futures. The implied probability of a higher Fed funds rate by December remains at zero percent which is the same as it was last Saturday. The probability of a higher Fed funds rate by next June went down from 36.6% to 31.7%.

Yesterday was the second Friday in a row without a bank failure. However, this week wasn't free of failures. The NCUA announced the liquidation of First American Credit Union in Wisconsin. Unlike several credit unions that have failed this year, it was a sizable credit union with $137 million in assets. First Community FCU assumed all of the First American's assets and liabilities. That's the 14th liquidated credit union for 2010. The number of bank failures remain at 118.

The FDIC released its second quarter report on the banking industry on Tuesday. The FDIC's number of problem banks increased from 775 to 829. In addition to the report, the FDIC updated its database with the Q2 financial data from the banks. We've grabbed this data from the FDIC, and updated our health scores and Texas Ratios. We also added a new Bank Health Ratings page to make it easy to find the health info for your bank or credit union.

Savings Account Rates

There were a few rate leaders that cut rates this week. As readers had reported the previous week, Alliant Credit Union reduced its savings account and High Rate Checking yield from 1.50% to 1.35% APY at the start of September. With this rate cut, Alliant's rate is now below a few internet banks such as Incredible Bank and Sallie Mae Bank.

SmartyPig announced on its blog that it will be reducing its savings account yield effective September 7th from 2.15% APY to 1.75% APY. This is the yield for balances under $50K. I'm sorry to see this cut, but I appreciate that SmartyPig gave us the heads up on its blog. Many banks secretly cut rates, and you only find out about them when your reviewing their rate tables or on your monthly statement. Unfortunately, 1.75% APY is in fact competitive for savings accounts these days. SmartyPig has more than two years of history as a rate leader, and I will be surprised if that doesn't continue.

Rate Hikes:

  1. None

Rate Cuts:

  1. SmartyPig Savings Account - 1.75% effective 9/7 (currently 2.15%)
  2. Fort Knox FCU - 1.50% $50K+ (was 1.60%)
  3. Alliant Credit Union Savings & Chk - 1.35% (was 1.50%)
  4. Ally Bank OSA & MMA - 1.25% (was 1.29%)

Certificate of Deposit Rates

Many credit unions reduced their CD rates with the start of September. Pentagon Federal Credit Union was one of them with rate cuts of around 25 basis points on their long-term CDs. Navy Federal now has the lead on PenFed, but that may not last long. I received info from Navy Federal's service rep that the rates may fall on Sunday.

Many are staying away from long-term CDs since they don't want to be stuck in a low-rate CD if interest rates shoot up in the next couple of years. However, it's becoming more well known that thanks to relatively mild early withdrawal penalties, long-term CDs can be better deals than short-term CDs even if you withdraw the money before maturity. On Thursday I reviewed a blog post at CBS MoneyWatch which shows the long-term CD deals at Ally, USAA, Discover and PenFed.

Reward Checking Accounts

Danversbank continues to offer the best nationwide reward checking yield of 4.01% APY for balances up to $25K. Most 4-percent-plus reward checking accounts are only available within a state or within a local market. I reported on one this week at Coastal Commerce Bank which has a 4.01% APY for balances up to $20K. This is available online for Louisiana residents. Bank of Weston's reward checking account is a bit lower at 3.51% APY for up to $25K, but in these days, that's still a good deal. The bank has an online application that's available for residents of MO, IA and KS.

Please note that banks often change the availability of these reward checking accounts. We have seen many examples of accounts that used to be available nationwide become only available to residents of a certain state or in the bank's local market area. Be sure to always check with the bank for their latest eligibility policy.

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.

Yields as of September 4, 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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