Best Bank Account Interest Rates - Summary for October 2, 2010

Comments (6)
Oct 2, 2010 - 7:53 PM by Ken Tumin

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One week after the Fed's September FOMC meeting, news reports described how Fed officials are debating if and when a new round of quantitative easing (i.e. QE2) should be done. This would likely involve buying of US Treasury bonds with the intent of forcing down long-term interest rates. The theory is that this would help with the persistent high unemployment and help with bringing inflation back to a "preferred" level. As one Fed official has warned (Thomas Hoenig), forcing ultra-interest rates can have unintended consequences. This was also described in this Barrons article. So it's not just an issue of this policy being unfair to savers and retirees.

The US isn't the only country in which savers are being punished. The UK Telegraph reported on a Bank of England official who warned that savers should "stop moaning and start spending."

With QE2 appearing to be more likely, the Fed funds futures continue to show smaller implied probabilities of a higher Fed funds rate by next June. It's now 16.8% which is down from 19.8% last Saturday.

For bank failures, yesterday was a repeat of September 24th. Two banks failed with one from Florida and one from Washington State. That increases the total number of bank failures this year to 129.

Savings Account Rates

The good news this week was that there were no rate cuts for the leaders. Alliant Credit Union's savings account and checking will continue to pay 1.35% APY for October. However, there were some cuts at the banks that were in the middle of the list.

I haven't included SFGI Direct in my list for quite a while since the bank had stopped offering new accounts. The good news is that they are now accepting new applications. The bad news is that they lowered its savings account yield from 1.35% to 1.26% APY. That's better than a few other banks including Ally Bank (which did another tiny rate cut this week). So I put SFGI Direct back on my list.

The best non-promo rates continue to be AmericaNet Bank and its sister bank Evantage Bank which continue to offer 2.00% APY on balances up to $35K. The next best one is SmartyPig which offers 1.75% APY on balances up to $50K. SmartyPig has another feature that can make it even a better deal. That's the cash boost you can get when you redeem your savings for gift cards. However, the value of this feature is questionable. I reviewed this issue in a post this week. I also asked SmartyPig customers in a poll about what they thought about this cash boost. Out of 16 customers, 11 of them said they have not used this feature and had no plans to use it.

Rate Hikes:

  1. None

Rate Cuts:

  1. SFGI Direct - 1.26% (was 1.36%) Now accepting new customers
  2. Colorado Federal Savings Bank - 1.25% (was 1.30%)
  3. Ally Bank - 1.24% (was 1.25%)
  4. Peoples Bank - 1.15% (was 1.30%)

Certificate of Deposit Rates

In the last two years, a new month has rarely provided savers with good news. I'm afraid that was the case again for October. Several banks and credit unions cut their CD rates. They included Ally Bank, Sallie Mae Bank, North American Savings Bank, Delta Community Credit Union, Mountain American Credit Union and Navy Federal Credit Union.

Ally Bank's 5-year CD yield fell again this week falling from 2.69% APY to 2.64% APY. These rate cuts are eroding the hot deal of Ally Bank's mild 60-day early withdrawal penalty.

Another disappointment was at Navy Federal. Its 7-year CD for a $20K minimum was in the lead last week. The yield fell this week from 3.55% APY to 3.35% APY. Fortunately, PenFed held steady with its CD rates, and its 7-year CD now has the lead with a 3.49% APY.

Reward Checking Accounts

We lost another 4 percent nationwide reward checking account this week. First Clover Leaf Bank didn't last long. After only a couple of weeks on the list, the bank cut the yield to 3.85% APY, reduced the balance cap from $25K to $15K and changed its availability so now it's only a local deal.

As was reported a few weeks ago, Danversbank will be falling off the 4-percent list on Monday as its new 3.01% APY takes effect (down from 4.01% APY).

With these falling rates, you may be asking if it's worthwhile to open new reward checking accounts. Would a new CD make more sense? I looked into this issue in a post this week and asked in a poll which types of accounts would be receiving more of your money. Out of 35 voters, 29% said reward checking accounts. Most readers said CDs (46%).

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.

Rates as of October 2, 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
Anonymous

Anonymous - #1, Sunday, October 3, 2010 - 7:43 AM

The banker in England mentioned in the UK Telegrah is an arrrogant, and obnoxious man. Did he happen to mention his bonus and salary and how he benefits when rates are kept low??? As for the USA doing this--what an act od socialism!


1
Anonymous

Anonymous - #2, Sunday, October 3, 2010 - 10:58 AM

Why is Pen Fed's 7-year CD called a "money market CD?" "Money market" sounds like something with a variable rate of return--and I'm sure I'm also recalling the "money market funds" of a couple of years ago that lost principal in the downturn. Pen Fed says its money market CD is just like a regular CD. Can anyone reassure me?


1
Anonymous

Anonymous - #3, Sunday, October 3, 2010 - 12:08 PM

@ Anon #2, Yes Penfed CD rates are fixed, and have the odd Money Market Certificate designation. 


1
cactus

cactus - #4, Sunday, October 3, 2010 - 12:20 PM

They are standard CDs.

PenFed is a very good outfit - but they do things in quirky ways at times.

For example, your monthly statement is posted based on the day of the month when you joined. (If you joined on the 13th of the month, your statements will be posted on the 13th of every month.) Very efficient - they have no end-of-the-month crunch.


1
cactus

cactus - #5, Sunday, October 3, 2010 - 12:26 PM

Here's the link to the Telegraph article

http://www.telegraph.co.uk/finance/personalfinance/savings/8028884/Savers-told-to-stop-moaning-and-start-spending.html


1
Meskito

Meskito (anonymous) - #6, Monday, October 4, 2010 - 9:59 AM

This would likely involve buying of US Treasury bonds with the intent of forcing down long-term interest rates. The theory is that this would help with the persistent high unemployment and help with bringing inflation back to a "preferred" level.



hm... this is playing with fire we can only predict markets never 100 % know what is gonna happen in future so i think U S government should reconsider this

 

"http://verylatestinsurancenews.com"


2

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