Best Bank Account Interest Rates - Summary for March 5, 2011

This is going to be a short version of my weekly summary. I also want to let readers know that for the next two and a half weeks I'll be on a reduced posting schedule. There are some family matters that I need to take care of. Jeremy, my technical partner, is arranging for some guest posts during this time. So if these posts are different than what you have come to expect, please be patient. I'll soon be back to my usual postings.

Don't forget to review the latest forum posts, and if you come across any good bank deals or interesting financial news, please post them in the forum. This can be done by going to the appropriate topic in the discussion forum and selecting the "new thread" button.

This Week's Financial News

An unexpected drop in the unemployment rate is good news even though it's going to take a lot more improvement. If this continues, we should be seeing the Fed begin to exit this ultra low interest policy.

The Calculated Risk Blog provided a useful timeline of the steps the Fed will likely take before it raises rates. The first step is ending QE2 around June. Then they'll end reinvestments. A couple months after that, the extended period language should disappear from their statements, and then sometime perhaps in early 2012, rates will be raised.

The Fed funds futures appear to be in sync with this timeline. There continues to be diminished expectations for a rate hike before the end of 2011. The Fed funds future are showing the implied probability of a higher Fed funds rate by next December at 38.8% which is down from last Saturday when it was 40.5%

Of course this timeline assumes continued improvements in employment and economic growth. Hopefully, commodity inflation and commodity anxiety won't become major issues. The market doesn't appear too worried. Treasury yields remain low. The 10-year Treasury yield did go up this week, but not by much (from 3.41% to 3.49%). The 30-year Treasury yield went up from 4.50% to 4.60%.

This is the first week of 2011 in which the FDIC didn't take over any failed banks. There was only one failed bank last week so the pace of closures do seem to be going down. The number of failed banks remains at 23. However, credit union failures have been picking up. The NCUA announced one liquidation yesterday. The tiny credit union, Wisconsin Heights Credit Union of Ogema, was liquidated. The credit union had less than $1 million in assets and only 501 members. The NCUA arranged for CoVantage Credit Union of Antigo, Wisconsin, to assume the members, assets and liabilities. This was the fourth credit union liquidation for 2011.

Savings Account Rates

Some of the rate leaders made cuts this week. After a year with 1.30% APY, American Express Bank finally cut its savings account rate this week. The new rate is now 1.15% APY. Incredible Bank was another disappointment, but its internet checking account remains close to the leaders with a 1.21% APY.

There are now just three banks with non-promo yields over 1.30%. The top one remains The Morrill and Janes Bank which continues to offer 1.51% APY on its checking account. You have to wonder how long it'll be able to hold on. SmartyPig is now in second with a 1.35% APY on balances up to $50K. SFGI Direct is in third place with its 1.31% APY savings account.

Rate Hikes:

1. None

Rate Cuts:

1. EverBank 3mo MMA promo - 1.51% (was 2.01%)
2. EverBank MMA ongoing - 1.01% (was 1.06%)
3. Capital One/Costco InterestPlus Savings - 1.25% (was 1.30%)
4. Capital One InterestPlus Savings - 1.20% (was 1.25%)
5. Incredibe Bank Checking - 1.21% (was 1.35%)
6. American Express Savings - 1.15% (was 1.30%)

Certificate of Deposit Rates

There were a few banks and credit unions which cut rates at the start of March. PenFed was the biggest disappoinment with rate cuts of 25 basis points on its CDs. Discover Bank and Ally Bank also cut some of their CD rates. However, Ally Bank's 5-year CD rate remains at 2.40% APY and its 11-month No-Penalty CD remains at 1.20% APY. Refer to my Ally Bank CD review to see why these two CDs are such good deals.

On the positive side, we continue to see a few more rate hikes on the long-term CDs. A notable one was Navy Federal Credit Union which raised its 7-year CD rate from 2.85% to 3.05% APY for a $20K minimum deposit.

Reward Checking Accounts

I didn't find any new noteworthy reward checking accounts this week. We continue to see both rate cuts and balance cap reductions on many reward checking accounts. There was one notable exception at University of Iowa Community Credit Union which increased its top rate from 4.00% to 4.25% APY and kept the balance cap at $25K. I asked my contact at the credit union if they'll be able to continue this high rate, and he said it'll depend on how many members game the system with tiny debit card purchases and how interchange fee revenue holds up after the new Federal Reserve regulation takes effect in July.

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

• Archive of 2011 Posts

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.

Rates as of March 5, 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:

• The Morrill and Janes Bank - 1.51% Checking (min $1.5K) account review
• EverBank - 1.51% ($5K min), 3-mo promo rate up to $50K (1.01% ongoing) account review
• SmartyPig - 1.35% (min $25, max $50K) withdrawal restrictions, account review
• SFGI Direct - 1.31% (min $500 to open) account review
• Clear Sky Accounts - 1.25% account review
• Sallie Mae Bank - 1.25% (Upromise rewards) account review
• Hudson City Savings Bank - 1.25% (min $2.5K)
• Capital One/Costco - 1.25% InterestPlus Savings ($5K min) quarterly bonuses for $10K+, account review
• Incredible Bank - 1.21% Checking ($1K min) account review
• CNB Bank Direct - 1.20% account review
• Discover Bank - 1.20% Savings (min $500) account review
• Capital One - 1.20% InterestPlus Savings ($1K min) quarterly bonuses for $10K+, account review
• Alliant Credit Union - 1.15% (min $100) account review
• American Express Bank - 1.15%, account review
• Flagstar Direct - 1.11% MMA
• WTDirect - 1.11% ($10K min) account review
• 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

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)
• Virtual Bank - 0.75% (min $10K)
• Fort Knox FCU - 0.65% (min $500)
• Ally Bank - 0.60%

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)
• Colorado Federal Savings Bank - 1.05% ($5K min)
• OneWest Bank - 1.05% (min $1K)
• Ally Bank - 1.00%

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)

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
• 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
• Metropolitan National Bank - 1.35% (min $1K)
• CNB Bank Direct - 1.35% (min $25K) account review
• Salem Five - 1.35% (14-mo) (min $10K)
• State Farm Bank - 1.31% (15-mo) (min $500)
• Bank of Internet - 1.31% (min $1K) account review
• Alliant Credit Union - 1.30% (min $25K) account review
• Colorado Federal Savings Bank - 1.25% (min $5K)
• Choice Financial - 1.25% (13 mo) (min $5K) add-on feature, account review
• Ally Bank - 1.25% (min $0) account review
• Ally Bank - 1.20% (11-mo) No-Penalty CD, Ally No-Penalty CD review
• Discover Bank - 1.20% (min $2.5K) account review

18-Month Certificates of Deposit:

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

• Noteworthy Accounts Available Nationwide:

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

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
• Velocity Credit Union - 1.76% (min $5K) account review
• Fort Knox FCU - 1.75% (min $500)
• Salem Five - 1.75% (min $10K)
• 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)
• Bank of Internet - 1.55% (min $1K)
• OneWest Bank - 1.55% (min $1K)
• Ally Bank - 1.50% Raise Your Rate CD

36-Month Certificate of Deposit:

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

• Noteworthy Accounts Available Nationwide:

• Velocity Credit Union - 2.27% (min $5K) account review
• Fort Knox FCU - 2.25% (min $500)
• RTN Federal Credit Union - 2.25% (min $50K)
• Melrose CU - 2.17% (min $5K) account review
• OneWest Bank - 2.00% (min $1K)
• Metropolitan National Bank - 1.90% (min $1K)
• Alliant Credit Union - 1.90% (min $25K) account review
• Bank of Internet - 1.86% (min $1K)
• Nationwide Bank - 1.85% (min $500)
• USAA Bank - 1.75% (min $1K) (2.01% $175K min) account review
• Colorado Federal Savings Bank - 1.75% ($5K min)
• US Bank - 1.75% (37-mo) (min $1K)
• Sallie Mae Bank - 1.55% (no min) account review
• Pentagon Federal CU - 1.50% (min $1K), account review

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
• Hudson City Bank - 2.25% (min $5K) account review
• OneWest Bank - 2.25% (min $1K)
• Pentagon Federal CU - 2.00% (min $1K), account review

60-Month Certificate of Deposit:

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

• Noteworthy Accounts Available Nationwide:

• Kaiser Federal Bank - 3.00% (min $10K)
• Connexus CU - 3.00% Active checking required, account review
• 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)
• Fort Knox FCU - 2.75% (min $500)
• Salem Five - 2.75% (min $10K)
• Velocity Credit Union - 2.73% (min $1K) (2.73% IRA)
• Nationwide Bank - 2.55% (min $500)
• OneWest Bank - 2.50% (min $1K)
• US Bank - 2.50% (59-mo) (min $1K)
• Ally Bank - 2.40% (min $0) account review
• First Internet Bank - 2.40% (min $1K)
• Navy FCU - 2.40% ($20K min) (2.50% $100K+) restrictions to membership, account review
• EverBank - 2.33% ($1.5K min) account review
• USAA Bank - 2.30% (min $1K) (2.45% $175K min) account review
• Pentagon Federal CU - 2.25% (min $1K), account review
• Sallie Mae Bank - 2.15% (no min) account review

84-Month Certificate of Deposit:

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

• Navy FCU - 3.05% 7yr ($20K min) restrictions to membership, account review
• Capital One - Costco - 3.05% 10yr (min $5K)
• Apple FCU - 3.00% 7yr (min $500) (3.50% 10yr) account review
• Capital One Direct Banking - 3.00% 10-yr (min $5K)
• Pentagon Federal CU - 2.75% 7yr (min $1K), account review
• USAA Bank - 2.60% 7yr (min $1K) (2.69% $175K min) account review
• Discover Bank - 2.60% 7yr (min $2.5K) (3.00% 10yr) account review

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 - 0.13% 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)