Best Bank Account Interest Rates - Summary for Week Ending June 25, 2011

Comments (3)
Jun 25, 2011 - 7:09 PM by Ken Tumin

The Fed meeting and Bernanke's press conference went as expected this week. The Fed believes that most of the factors that have recently slowed the economic recovery are temporary. Consequently, QE2 will end as scheduled, and there are no current plans for QE3 to further drive down interest rates. However, the Fed also believes the trending up of inflation is temporary. So there continues to be no movement toward higher interest rates. In short, the Fed is on hold. I'm afraid it could be a long time before we see rate hikes. I described the likely timeline for higher rates in my FOMC statement review.

The Greek debt crisis contributed to more declines in Treasury yields. The 10-year Treasury yield is now at a 2011 low of 2.86%. The expectations of future Fed fund rate hikes also went down from last week. Details can be seen in the following summary which is based on bond rate data and the CME Group FedWatch.

Treasury Yields:

  • 5--year: 1.37% down from 1.52% last week
  • 10-year: 2.86% down from 2.94% last week
  • 30-year: 4.19% down from 4.21% last week

Fed funds futures' implied probability for a higher rate by:

  • Dec 2011: 11.7% up from 11.5% last week
  • Jan 2012: 18.7% down from 19.2% last week
  • Mar 2012: 21.9% down from 25.2% last week
  • Apr 2012: 27.2% down from 34.3% last week
  • Jun 2012: 29.8%

There was still a lot of discussion about Capital One's planned acquisition of ING Direct. News of this first came out on Thursday June 16th, and I reviewed it the following Friday. There are growing concerns that Capital One will change ING Direct for the worse with more fees. The transition is going to take a while, so there's no reason to be too concerned about it now.

Ally Bank had some good news to announce this week. It launched four new products including the long-anticipated IRAs.

Both the FDIC and the NCUA were in action on Friday with one bank and one credit union closure. Both were small institutions. That brings the total number of bank failures for this year to 48 and the total number of credit union liquidations to 10.

Savings Account Rates

SFGI Direct was the only institution on my list which cut rates this week. Its online savings account yield fell from 1.21% to 1.16%.

They are no longer on my list since they are not available to new customers, but the Huckabay banks (AmericaNet, Evantage and Redneck Banks) posted that their Mega Money Market account rate will be cut from 1.50% to 1.25% APY effective July 21st. I was hoping that since this rate applied only to the first $35K of balance, they would be able to maintain the higher rates.

On a positive note, I added MyBankingDirect's money market account to the list with its 1.25% APY for balances over $5K. As I mentioned in the MyBankingDirect review, this is only a promotional rate and there's no guarantee of how long this will last.

I also added ING Direct's Electric Orange checking to my list. Its top rate of 1.15% APY is now looking pretty good. This does require a minimum $100K balance. Balances of $50K to under $100K only earn 1.10% APY. This is only a decent deal for balances of at least $50K. Smaller balances earn only 0.25%. Hopefully, these upper-tier yields will last.

Rate Hikes:

  1. MyBankingDirect MMA - 1.25% (added to list)

Rate Cuts:

  1. SFGI Direct Savings - 1.16% (was 1.21%)
  2. AmericaNet/Evantage/Redneck Banks MMA - 1.25% eff July 21 (currently 1.50%)

Certificate of Deposit Rates

The 3.05% APY 5-year CD didn't last long at Fort Knox Federal Credit Union. The rate just went down to 2.93% APY. The 3.05% APY only lasted 9 days. Connexus Credit Union remains as the only institution offering a nationally available 5-year CD with at least a 3.00% APY. However, it has an active checking account requirement. This probably prevents too much money from flowing into it.

Even on longer terms, it's getting hard to find rates over 3.00%. Dime Bank reduced its 7-year CD rate this week from 3.10% to 3.00% APY. The only two nationally available 7-year CDs with at least 3.00% continue to be Dime and Navy Federal, but Navy Federal has limited membership.

There was one positive change this week. The small Pennsylvania bank Quaint Oak increased its long-term CD rates by 10 basis points. This puts them near the top for 3-year, 4-year and 5-year CD rates. When I last checked with them on June 16th they were still accepting out-of-state deposits by mail.

The CD news with Ally Bank was mixed this week. On the down side, the 5-year CD rate fell from 2.37% to 2.34% APY and the 11-month no-penalty CD rate fell from 1.14% to 1.13% APY. On the positive side, one of this week's changes was the conversion of their 4-year CD into a Raise Your Rate 4-year CD with two options to bump-up the rate. I reviewed this new Raise Your Rate CD and compared it to the 5-year CD.

Reward Checking Accounts

With the legislation failing to pass to delay the debit card regulation, the Federal Reserve is moving forward. Next week it will be holding a public meeting to discuss the final rules on debit cards. We shall see how this regulation affects small banks and credit unions which are the main institutions that offer high-interest reward checking accounts.

There are only a few large banks (defined as over $10 billion in assets) which offer reward checking accounts. One is MB Financial which has most of its branches in the Chicago area. I did an updated review of its 4.00% reward checking account. That 4.00% is the only thing good about the account. It only applies to balances up to $10K, and it now requires that your monthly debit card purchases total $200. It also raised the monthly fee to $11.95 if the customer doesn't maintain a balance of at least $2,000. MB Financial has assets just above $10 billion so it will be interesting to see how this account changes when the new regulation takes effect.

If you're new to reward checking, my recent post, 10 Common Traits of High-Yield Reward Checking, should come in handy.

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. Be sure to use the "Filter Accounts" button above the table to compare accounts in your state.

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

Posts from Previous Weeks

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 June 25, 2011

Checking/Savings/Money Market Accounts:

  • Noteworthy Accounts Available Nationwide:

3-Month Certificates of Deposit:

  • Noteworthy Accounts Available Nationwide:

6-Month Certificates of Deposit:

  • Noteworthy Accounts Available Nationwide:

9-Month Certificates of Deposit:

  • Noteworthy Accounts Available Nationwide:

12-Month Certificates of Deposit:

  • Noteworthy Accounts Available Nationwide:

18-Month Certificates of Deposit:

  • Noteworthy Accounts Available Nationwide:

24-Month Certificates of Deposit:

  • Noteworthy Accounts Available Nationwide:

36-Month Certificate of Deposit:

  • Noteworthy Accounts Available Nationwide:

48-Month Certificate of Deposit:

  • Noteworthy Accounts Available Nationwide:

60-Month Certificate of Deposit:

  • Noteworthy Accounts Available Nationwide:

84-Month Certificate of Deposit:

Various Deposit Account Deals

Bank Account Alternatives

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


Post a CommentComments
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Anonymous

Anonymous - #1, Sunday, June 26, 2011 - 12:58 AM

As usual, thanks for the weekly update, Ken.

Savers, i.e., conservative investors, we continue to be the bottom rung of the planet earth and without a single mention of our situation be any of our elected or appointed officials. Accordingly, we are being forced to either live off of our hard earned and hard to come by principal, until its gone, or purchase risky investmenta to try to compensate for our lack of earnings, or load up on the dog food while we still have the resources to do so. After that, who knows?  Maybe its all worth it so long as we can continue to support the foreign aid and redistribution programs?  






 


10
Anonymous

Anonymous - #3, Sunday, June 26, 2011 - 8:37 AM

Union County Savings bank in NJ has a 2 year CD at 2%. No strings attached. Have to go into a branch to open. No web site just an old line bank with the highest 2 year CD in NJ. 4 and 5 star rated.


5
KenBDG

KenBDG - #4, Sunday, June 26, 2011 - 10:12 AM

Thanks for the info on Union County Savings Bank. I've updated the forum post on this CD. We have more information on this bank including the locations in our hub page for Union County Savings Bank.


4

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