Best Bank Account Interest Rates - Summary for February 26, 2011

How much will inflation rise this year? The Fed hasn't been worried about the higher commodity prices. Their primary concern is core inflation which excludes food and energy. I thought this Christian Science Monitor blog post had an interesting description of this policy:

Let them eat microchips! The Fed is sending a message: Stop eating. Stop driving. Start buying more electronics.

Another statistic the Fed tracks is inflation expectation. As described in this WSJ article, the long-term outlook supposedly shows "inflation expectations remain well anchored." That and high unemployment are two important factors that are keeping the Fed from changing their monetary policy.

In the past few months, inflation expectations have helped drive Treasury yields higher. However, yields have recently been falling. As described in this CNNMoney article, political unrest in North Africa and the Middle East are driving investors to the safety of Treasuries. In addition, surging gas prices could slow the economy, and a slowing economy also pushes yields down on Treasuries. This week the 10-year Treasury yield fell from 3.58% to 3.41%.

Worries about economic growth seemed to have lowered the market's expectations for Fed rate hikes. The Fed funds future are showing the implied probability of a higher Fed funds rate by next December at 40.5% which is down from last Saturday when it was 47.5%.

Savings Account Rates

Two of the big internet banks cut their savings account rates this week. ING Direct cut its Orange Savings account yield from 1.10% to 1.00% APY. It also cut the top rates on its Electric Orange account by 10 basis points. Ally Bank cut the yield on its savings and money market accounts from 1.09% to 1.05% APY.

Before this recent rate cut, I had thought ING Direct's rates had reached a bottom. The Orange Savings account yield had held at 1.10% since March 2010. It's worrisome when ING Direct cuts rates since they're the largest pure internet bank. This could encourage other internet banks to make a similar cut.

The three rate leaders (excluding promo rates) are now the internet checking accounts at The Morrill and Janes Bank and Incredible Bank and the SmartyPig savings account. It's interesting to see SmartyPig back near the top. In the last few years they often have made large rate cuts, but once they cut, they have tended to maintain the rate for a while. As time goes on and others make multiple small cuts, SmartyPig's ranking improves. Of course, it's easier now for SmartyPig to stay a leader since only the first $50K qualifies for the top rate.

Rate Hikes:

1. None

Rate Cuts:

1. ING Direct Electric Orange - 1.15% $100K+ (was 1.25%)
2. Ally Bank Savings/MMA - 1.05% (was 1.09%)
3. ING Direct Orange Savings - 1.00% (was 1.10%)
4. Flagstar Chk 4-mo promo - 1.00% (was 1.50%)
5. Newtown Savings eSavings - 1.00% (was 1.15%)

Certificate of Deposit Rates

The best short-term nationwide deal this week continues to be at Justice Federal Credit Union which is offering a 2.00% APY on a 1-year CD (2.10% APY on a 1-year Jumbo CD). It's nationwide because anyone can join through an association. However, the credit union and associations don't make it easy as I and several readers described in my Justice FCU CD post. Since credit unions often adjust rates at the start of each month, these 1-year CD rates may not last. So if you're not already a member, you might want to look at banks where you can quickly open CDs such as Incredible Bank which continues to have a top 1-year CD rate of 1.45% APY.

If you want a CD with a maturity less than a year, Ally Bank continues to have one of the best deals with its 1.20% APY 11-month No-Penalty CD. As I described in my Ally CD review, there's no reason to get any 3-month, 6-month or 9-month CD that has a lower rate than this 11-month CD. The no-penalty feature allows you to make any term you want from 6 days to 11 months.

For long-term CD rates, the best deal continues to be at Kaiser Federal Bank which is offering a special 3.00% APY 5-year CD with a 180-day early withdrawal penalty. This is now the only nationally available 5-year CD with a 3.00% APY that doesn't require an active checking account. Sovereign Bank had been offering a 3.00% 5-year CD special, but the rate has recently fallen to 2.80% APY.

The rate may be much less than 3.00%, but Ally Bank's 5-year CD continues to be a good deal due to its small 60-day early withdrawal penalty.

Reward Checking Accounts

It's getting harder to find new reward checking accounts, especially those with rates worth mentioning. Thanks to a reader's comment this week, I found out about Greater Alliance Credit Union that's offering a New Jersey reward checking account with a 4.01% APY for balances up to $25K. And thanks to the forum posting of another reader, I learned about the California reward checking account at Pasadena Service Federal Credit Union. It's paying 3.01% APY on balances up to $25K.

Rates on some of these reward checking accounts have held up fairly well over the last two years. However, that trend has started to change this year. We're seeing more and more rates fall below 3.00%. The latest example is the reward checking account that I reported on this week at NARFE Premier Federal Credit Union (it's open to all active and retired federal employees). The account had been paying 4.01% APY on balances up to $25K since March of 2010. However, this is coming to an end. A reader just reported that there's a new note on the credit union's website informing customers that the rate is scheduled to drop to 2.02% APY effective March 1st.

To find reward checking accounts available nationwide or to find those that are only available in your state, please refer to the reward checking section of DepositAccounts.com.

Recap for the Week - Links to This Week's Posts

Banking News/Resources

• Financial Accounts for Minors
• Regulators Close One Bank and One Credit Union
• FDIC's Winter 2011 Consumer News: Unlimited FDIC Insurance, Financial Records, College Savings
• FDIC's Fourth Quarter Report - Number of Problem Banks Increased to 884
• Do I Have to Pay Taxes on Deposit Account Earnings?

Savings/Checking Accounts - Nationwide

• Best Rates for Business Checking, Savings and Money Market Accounts

CD Deals - National

• State Farm Bank Update: Special CD Rates & Online Check Deposits
• Review of Some Useful Features of Ally Bank CDs
• EverBank's MarketSafe Diversified Commodities CD - Is It a Good Deal?

Checking/Savings Bonuses

• FirstBank Checking Promotion: iPod Touch, Kindle or Garmin Gift - CO, AZ & Part of CA Only
• $100 Checking Account Bonus at Huntington Bank in Some States

Reward Checking Accounts

• High-Yield Reward Checking at Greater Alliance Federal Credit Union in Northern New Jersey - Local Only
• Many May Be Eligible for This Top High-Yield Reward Checking Account

CD and Money Market Deals - Local

• Update on the BankOn Online Savings Account and Bonus - CO, KS, MO, NE & WY Only
• Competitive 3-Year CD Rates at Coast Central Credit Union in California - Local Only
• Top CD Rates at HAPO Community Credit Union - Washington State Only
• Top 5-Year CD Rate at First Community Credit Union of Houston - Local Only
• Special 3-Year CD Rate at United SA Federal Credit Union in San Antonio - Local Only
• Special 33-Month CD at Via Credit Union in Indiana - Local Only
• Competitive Short-Term CD Rates at Central Bank in Florida - Local Only
• Top Long-Term CD and IRA CD Rates at Aventa Credit Union in Colorado
• Special 2-Year CD at North Jersey Community Bank - Local Only

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, 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.

Rates as of February 26, 2011

Checking/Savings/Money Market Accounts:

• Best Reward Checking Account Rates (Nationwide & by State)
• Best Savings Account Rates (Nationwide & by State)
• Best Money Market Rates (Nationwide & by State)
• Best Checking Account Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• EverBank - 2.01% ($5K min), 3-mo promo rate up to $50K (1.06% ongoing) account review
• The Morrill and Janes Bank - 1.51% Checking (min $1.5K) account review
• SmartyPig - 1.35% (min $25, max $50K) withdrawal restrictions, account review
• Incredible Bank - 1.35% Checking ($1K min) account review
• SFGI Direct - 1.31% (min $500 to open) account review
• Capital One/Costco - 1.30% InterestPlus Savings ($5K min) quarterly bonuses for $10K+, account review
• American Express Bank - 1.30%, account review
• Hudson City Savings Bank - 1.25% (min $2.5K)
• Sallie Mae Bank - 1.25% (Upromise rewards) account review
• Capital One - 1.25% InterestPlus Savings ($1K min) quarterly bonuses for $10K+, account review
• Clear Sky Accounts - 1.25% account review
• Discover Bank - 1.20% Savings (min $500) account review
• CNB Bank Direct - 1.20% account review
• Alliant Credit Union - 1.15% (min $100) account review
• WTDirect - 1.11% ($10K min) account review
• Flagstar Direct - 1.11% MMA
• Colorado Federal Savings Bank - 1.10% ($2.5K min) account review
• Zions Bank - 1.06% ($1K min)
• Ally Bank - 1.05% MMA account review
• ING Direct - 1.00% Orange Savings

• Noteworthy Accounts - Local Only

• Chartway FCU - 2.25% (min $100K+) in parts of VA, FL, RI & TX
• Mid America Bank & Trust Company - 1.44% (min $10K) in MO
• Affinity Bank (formerly Atlanta Business) - 1.40% MMA (min $100K) in GA
• Solera National Bank - 1.25% (min $100) in CO

3-Month Certificates of Deposit:

• Best 3-Month CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Ally Bank - 1.20% (11-mo) No-Penalty CD can be closed at 3 mo, Ally No-Penalty CD review
• Self-Help CU - 1.01% (min $500) account review
• TotalBank - 0.85% e-CD (min $1K)
• Fort Knox FCU - 0.75% (min $500)
• Virtual Bank - 0.75% (min $10K)
• Ally Bank - 0.64%

• Noteworthy Accounts - Local Only

• Self Reliance New York FCU - 1.45% (min $500) in NYC
• Bank of Georgetown - 1.40% (4-mo w/relationship) (min $1K) in Washington DC metro

6-Month Certificates of Deposit:

• Best 6-Month CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Connexus CU - 1.50% (min $10K) Active checking required, account review
• Ally Bank - 1.20% (11-mo) No-Penalty CD can be closed at 6 mo, Ally No-Penalty CD review
• Metropolitan National Bank - 1.15% (min $1K)
• Aurora Bank FSB - 1.09% (min $1K)
• Virtual Bank - 1.06% (min $10K)
• OneWest Bank - 1.05% (min $1K)
• Ally Bank - 1.05%
• Colorado Federal Savings Bank - 1.05% ($5K min)

• Noteworthy Accounts - Local Only

• Massena Savings and Loan - 2.56% IRA-only (min $2.5K) in NY
• Self Reliance New York FCU - 1.65% (min $500) in NYC
• First Peoples Community Credit Union - 1.50% (min $5K) in MD, PA & WV
• Industrial Credit Union - 1.40% (min $1K) in MA
• Central Bank in Florida - 1.35% (7-mo) liquid features in Tampa
• F&A Federal Credit Union - 1.30% (min $1K) in CA
• Fayetteville Bank - 1.26% (min $500) (1.41% $100K+) in TX

9-Month Certificates of Deposit:

• Dime Savings Bank - 1.65% (10-mo) (min $500) req active chk account review
• Ally Bank - 1.20% (11-mo) No-Penalty CD can be closed at 9 mo, Ally No-Penalty CD review
• TotalBank - 1.15% e-CD (min $1K)
• Virtual Bank - 1.11% (min $10K)
• OneWest Bank - 1.10% (min $1K)
• Discover Bank - 1.00% (min $2.5K)

• Noteworthy Accounts - Local Only

• Miami Postal Service CU - 1.76% (min $5K) in Miami, FL
• Self Reliance New York FCU - 1.70% (min $500) in NYC
• NavyArmy FCU - 1.20% (min $100K) in South TX

12-Month Certificates of Deposit:

• Best One-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Dime Savings Bank - 2.50% 15-mo IRA-only (min $500) account review
• Justice FCU - 2.00% (min $500) (2.10% $100K+) account review
• Connexus CU - 1.75% (min $10K) Active checking required, account review
• RTN Federal Credit Union - 1.55% (min $50K)
• Incredible Bank - 1.45% (min $10K)
• Melrose CU - 1.41% (min $5K) account review
• Salem Five - 1.35% (14-mo) (min $10K)
• CNB Bank Direct - 1.35% (min $25K) account review
• Metropolitan National Bank - 1.35% (min $1K)
• Bank of Internet - 1.31% (min $1K) account review
• State Farm Bank - 1.31% (15-mo) (min $500)
• Alliant Credit Union - 1.30% (min $25K) account review
• Ally Bank - 1.29% (min $0) account review
• Discover Bank - 1.25% (min $2.5K) account review
• Choice Financial - 1.25% (13 mo) (min $5K) add-on feature, account review
• Colorado Federal Savings Bank - 1.25% (min $5K)
• Ally Bank - 1.20% (11-mo) No-Penalty CD, Ally No-Penalty CD review

• Noteworthy Accounts - Local Only

• Self Reliance New York FCU - 2.00% (min $500) in NYC
• University of Iowa Community CU - 1.95% (15-mo) (min $100K) in Iowa
• First Peoples Community Credit Union - 1.75% (min $5K) in MD, PA & WV
• Barksdale Federal Credit Union - 1.61% (min $1K) in Louisiana
• Industrial Credit Union - 1.60% (min $1K) in MA
• NavyArmy FCU - 1.60% (min $100K) in South TX
• Progressive Credit Union - 1.51% in NYC
• MINT National Bank - 1.50% (min $2.5K) in TX

18-Month Certificates of Deposit:

• Best 18-Month CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Alliant Credit Union - 1.55% (min $25K) account review
• Incredible Bank - 1.55% (min $10K)
• Franklin Synergy Bank - 1.51% (min $1K)
• Fort Knox FCU - 1.50% (min $500)
• CNB Bank Direct - 1.50% (min $25K) account review
• Velocity Credit Union - 1.46% over end-of-day Monday 2/28 (min $10K)
• Metropolitan National Bank - 1.45% (min $1K)
• Nationwide Bank - 1.40% (min $500)
• Aurora Bank FSB - 1.39% (min $1K)
• Ally Bank - 1.37% (no min)
• USAA Bank - 1.35% (min $1K) (1.65% $175K min) account review
• Colorado Federal Savings Bank - 1.35% ($5K min)
• Discover Bank - 1.30% (min $2.5K), account review
• First Savings Bank Northwest - 1.23% unlimited add-on (min $500) account review

• Noteworthy Accounts - Local Only

• Massena Savings and Loan - 2.82% IRA-only (min $200) in NY
• Self Reliance New York FCU - 2.10% (min $500) in NYC
• Security Service FCU - 1.75% (min $100K) in TX & CO
• Flushing Bank - 1.70% (min $5K) in NYC

24-Month Certificates of Deposit:

• Best Two-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Self-Help CU - 1.77% (min $500) account review
• Salem Five - 1.75% (min $10K)
• Fort Knox FCU - 1.75% (min $500)
• Alliant Credit Union - 1.70% (min $25K) account review
• Melrose CU - 1.66% (min $5K) account review
• CNB Bank Direct - 1.65% (min $25K) account review
• Metropolitan National Bank - 1.60% (min $1K)
• OneWest Bank - 1.55% (min $1K)
• Bank of Internet - 1.55% (min $1K)
• Ally Bank - 1.50% Raise Your Rate CD

• Noteworthy Accounts - Local Only

• Self Reliance New York FCU - 2.35% (min $500) in NYC
• North Jersey Community Bank - 2.25% w/chk (2.00% w/o chk) (min $500) in NJ
• Barksdale Federal Credit Union - 2.12% (min $1K) in Louisiana
• University of Iowa Community CU - 2.10% (25-mo) (min $100K) in Iowa
• NavyArmy FCU - 2.00% (min $100K) in South TX

36-Month Certificate of Deposit:

• Best 3-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• RTN Federal Credit Union - 2.25% (min $50K)
• Fort Knox FCU - 2.25% (min $500)
• Melrose CU - 2.17% (min $5K) account review
• OneWest Bank - 2.00% (min $1K)
• Nationwide Bank - 1.95% (min $500)
• Alliant Credit Union - 1.90% (min $25K) account review
• Metropolitan National Bank - 1.90% (min $1K)
• Bank of Internet - 1.86% (min $1K)
• US Bank - 1.75% (37-mo) (min $1K)
• Sallie Mae Bank - 1.75% (no min) account review
• Pentagon Federal CU - 1.75% (min $1K), account review
• Colorado Federal Savings Bank - 1.75% ($5K min)
• USAA Bank - 1.75% (min $1K) (2.01% $175K min) account review

• Noteworthy Accounts - Local Only

• Sea Comm Federal Credit Union - 2.63% (min $1K) in Northern NY
• Massena Savings and Loan - 2.56% (min $1K) in NY
• First Peoples Community Credit Union - 2.50% (39-mo) (min $5K) in MD, PA & WV
• Barksdale Federal Credit Union - 2.43% (min $1K) in Louisiana
• Redding Bank in Commerce - 2.27% (min $100K) in Northern CA
• EBSB Direct - 2.25% (min $1K) in New England & NY
• Montauk Credit Union - 2.25% in NYC
• Fort Bragg Federal Credit Union - 2.23% (min $25K) in NC
• Security Service FCU - 2.20% (min $100K) in TX & CO

48-Month Certificate of Deposit:

• Best 4-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Fort Knox FCU - 2.55% (min $500)
• Melrose CU - 2.42% (min $5K) account review
• SunTrust Bank - 2.40% (min $2K in 39mo & min $2K in 63mo) account review
• Alliant Credit Union - 2.30% (min $25K) account review
• Self-Help CU - 2.28% (min $500) account review
• OneWest Bank - 2.25% (min $1K)
• Hudson City Bank - 2.25% (min $5K) account review
• Pentagon Federal CU - 2.25% (min $1K), account review

• Noteworthy Accounts - Local Only

• Barksdale Federal Credit Union - 2.89% (min $1K) in Louisiana
• Sea Comm Federal Credit Union - 2.75% (min $1K) in Northern NY
• LOMTO FCU - 2.60% in NYC
• The Napoleon State Bank - 2.58% (min $50K) in IN
• Police & Fire Credit Union - 2.50% (min $500) in PA

60-Month Certificate of Deposit:

• Best 5-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Connexus CU - 3.00% Active checking required, account review
• Kaiser Federal Bank - 3.00% (min $10K)
• Melrose CU - 2.93% (min $5K) account review
• Sovereign Bank - 2.80% (min $500) account review
• Digital Credit Union - 2.76% (min $25K) (3.00% w/relationship)
• Salem Five - 2.75% (min $10K)
• Fort Knox FCU - 2.75% (min $500)
• Velocity Credit Union - 2.73% (min $1K) (2.73% IRA)
• Nationwide Bank - 2.55% (min $500)
• US Bank - 2.50% (59-mo) (min $1K)
• OneWest Bank - 2.50% (min $1K)
• Pentagon Federal CU - 2.50% (min $1K), account review
• Navy FCU - 2.40% ($20K min) (2.50% $100K+) restrictions to membership, account review
• First Internet Bank - 2.40% (min $1K)
• Ally Bank - 2.40% (min $0) account review
• Sallie Mae Bank - 2.35% (no min) account review
• EverBank - 2.33% ($1.5K min) account review
• USAA Bank - 2.30% (min $1K) (2.45% $175K min) account review

• Noteworthy Accounts - Local Only

• PEF Federal Credit Union - 3.29% (min $500)
• Barksdale Federal Credit Union - 3.04% (min $1K) in Louisiana
• Bridgewater Credit Union - 3.00% (min $1K) in MA
• Security Service FCU - 3.00% (min $100K) in TX & CO
• Police & Fire Credit Union - 3.00% (min $500) in PA
• Sea Comm Federal Credit Union - 2.99% (min $1K) in Northern NY
• LOMTO FCU - 2.95% in NYC
• John Marshall Bank - 2.94% (min $500) in DC Metro
• First Choice Bank - 2.90% (min $1K) in NJ
• Randolph-Brooks Credit Union - 2.84% (min $75K) in Central TX
• First Peoples Community Credit Union - 2.80% (min $5K) in MD, PA & WV
• F&A Federal Credit Union - 2.70% (min $50K) in CA

84-Month Certificate of Deposit:

• Best 6+-Year CD Rates (Nationwide & by State)

• Capital One - Costco - 3.05% 10yr (min $5K)
• Capital One Direct Banking - 3.00% 10-yr (min $5K)
• Pentagon Federal CU - 3.00% 7yr (min $1K), account review
• Apple FCU - 3.00% 7yr (min $500) (3.50% 10yr) account review
• Navy FCU - 2.85% 7yr ($20K min) restrictions to membership, account review
• Discover Bank - 2.60% 7yr (min $2.5K) (3.00% 10yr) account review
• USAA Bank - 2.60% 7yr (min $1K) (2.69% $175K min) account review

• Noteworthy Accounts - Local Only

• First Federal Savings Bank - 3.67% 10-yr (min $500) in KY & IN
• Security Service FCU - 3.50% 7yr (min $100K) in TX & CO
• Randolph-Brooks Credit Union - 3.45% 7yr (min $75K) in Central TX
• Anchor Mutual Savings Bank - 3.00% 8yr (min $500) in WA
• Montauk Credit Union - 3.00% 7yr in NYC
• Cardinal Bank - 2.91% 6yr (min $1K) in VA, DC & MD
• Access National Bank - 2.85% 7yr (min $10K) in VA, DC & MD

Various Deposit Account Deals

• Bank Deals Forum
• Checking/Savings Account Bonuses
• Best IRA CD rates, local and nationwide deals
• Latest CD and Savings Account Deals with No Major Deposit Limitiations

Bank Account Alternatives

• Ford Interest Advantage - 1.55% rate for $50k+, Ford Interest Advantage review
• GE Interest Plus - 1.45% rate for $50k+
• Vanguard Tax-Exempt Money Market Fund - 0.14% 7-day yield
• Paypal Money Market Fund - 0.10% 7-day yield
• Vanguard Prime Money Market Fund - 0.07% 7-day yield
• Fidelity Money Market Fund - 0.01% 7-day yield (reviews on Fatwallet)
• Fidelity Municipal Money Market Fund - 0.01% 7-day yield
• TIAA-CREF Money Market Fund - 0.00% 7-day yield
• FW Thread on Treasury Bills
• I & EE Savings Bonds for 2010, I Bond Article, I Bonds as CD Alternatives

Historical Rates from the Federal Reserve (Federal funds, Treasury bills, CD's)