Best Bank Account Interest Rates - Summary for Week Ending October 1, 2011

I hope the fourth quarter turns out better for savers than the third quarter which just ended. With signs of the economy heading back into recession, the Fed took action to further reduce interest rates. The first action was its pledge to keep the fed funds rate near zero until at least mid-2013. Then in its September meeting, it started Operation Twist. Many have doubts about these actions providing any help to the economy. It's not helping savers any as deposit rates continue to fall.

Treasury yields finally rose this week, but the increases were small, and the yields remain near record low levels. The summary below shows how the yields have changed in the last week (Numbers are based on Yahoo bond rate data and the CME Group FedWatch.)

Treasury Yields:

• 6-month: 0.04% up from 0.01% last week
• 2--year: 0.24% up from 0.21% last week
• 5--year: 0.95% up from 0.86% last week
• 10-year: 1.92% up from 1.83% last week
• 30-year: 2.91% up from 2.90% last week

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

• New data is not available

The start of October marks the effective date of the debit card interchange fee regulation. Large banks will no longer be able to make big profits when their customers make debit card purchases. The fees that banks get are now capped. Some large banks are planning new monthly fees when debit cards are used. The latest example of this is at Bank of America which announced it will be rolling out a $5 monthly fee when customers make debit card purchases.

Savings & Checking Account Rates

There was only one rate cut this week on my short list of top nationally available savings accounts. We may see a few more next week as banks and credit unions come out with new rates for October.

There continues to be only four banks offering nationally available savings or money market rates above 1.15% APY. Bank of Internet's new division, UFB Direct, continues to offer 1.30% APY on all balances, and Incredible Bank continues to offer a money market account with a 1.25% APY on balances up to $250K. The two internet divisions of New York Community Bank continue to offer the 1.25% APY promotion for balances up to $150K.

One interesting thing to note is that the fifth highest rate on the list is ING Direct's Electric Orange account which continues to offer 1.15% APY for a balance of at least $100K. This rate has held since last February.

Reward Checking Accounts

On my short list of nationally available reward checking accounts, there were two rate cuts. The first was Consumers Credit Union which had announced the rate cuts a month before they became effective. Its top yield remains at 4.09%, but the rates fell on the second and third tiers. The second reward checking rate cut was at Lake Michigan Credit Union which cut its top yield from 4.00% to 3.00%. This only applies to the first $15K of the balance. These remain on the top of the list, but if you have a $25K balance, the other reward checking accounts that pay between 2% and 3% for balances up to $25K would allow you to earn more.

Out of all reward checking accounts including those that are just local deals, there are 11 that offer yields of at least 4.00% for balances up to at least $25K (the 4 percent club). One of the institutions that's in this 4 percent club is Communications Federal Credit Union. Its reward checking account pays 4.00% APY on balances up to $30K. I learned this week that anyone in Oklahoma or Kansas can join this credit union.

To find the best rates and balance caps in your state, please refer to the reward checking rate table. If you're new to these tables, my rate table guide should be useful, and if you're new to reward checking, my blog post, 10 Common Traits of High-Yield Reward Checking, should also be useful.

Rate Hikes:

1. None

Rate Cuts:

1. Consumers CU Reward Checking - 4.09% (up to $10K) 0.56% ($10K-$25K) 0.35% ($25K+) [was 4.09% (up to $10K) 1.59% ($10K-$25K) 0.76% ($25K+)]
2. Lake Michigan CU Reward Checking - 3.00% up to $15K (was 4.00% up to $15K)
3. Sallie Mae Bank MMA - 1.00% (was 1.10%)

Certificate of Deposit Rates

I reported yesterday that the NCUA has ruled in favor of Fort Knox Federal Credit Union increasing the early withdrawal penalty on existing CDs. I have the full details in my blog post. My recap of CD rate changes and the list of CD deals will now be in my Friday survey of the best CD rates. My Saturday recaps will now focus on banking news of the week and liquid accounts.

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

Banking News/Resources

• One Small Texas Bank is Closed by Regulators
• Bank of America Adding Debit Card Fees - Future for Debit Cards?
• ESI - Little Known Deposit Insurance for Credit Unions
• How To Keep Your Checking Accounts Free
• Where is the Economy Headed? These Indicators Might Give You a Clue

Savings/Checking Accounts - Nationwide

• No new posts

CD Deals - National

• Survey of the Best CD Rates for September 30, 2011
• Beware of Certificate of Deposit Gotchas
• Top Long-Term CD Rates at US Senate Federal Credit Union - Easy Membership

Checking/Savings/CC Bonuses

• $100 Checking Account Bonus at NVE Savings Bank in New Jersey - Local Only
• $150 Checking & Money Market Bonus at CoreFirst Bank & Trust in Kansas City - Local Only

Reward Checking Accounts

• Top Reward Checking Account at Communications FCU - Open to All in OK & KS

CD and Money Market Deals - Local

• Top Money Market Account Rate at Huntington Bank in Some States
• Top CD & Savings Account Rates at American Plus Bank in CA - Local Only
• Top Long-Term CD Rates at Floridian Community Bank in South FL - Local Only
• Competitive CD Rates at Dept of Commerce FCU in DC - Local Only
• Top CD Rates at Commerce National Bank & Trust in Central Florida - Local Only

Posts from Previous Weeks

• 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.

Rates as of October 1, 2011

Checking/Savings/Money Market Accounts:

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

• How to View Rates for Your State

• Noteworthy Accounts Available Nationwide:

• UFB Direct (Bank of Internet) - 1.30% Savings account review
• Incredible Bank - 1.25% MMA ($2.5K min) account review
• AmTrustDirect - 1.25% (min $10K, max $150K) promo rate
• MyBankingDirect - 1.25% (min $5K) promo rate
• Alliant Credit Union - 1.15% (min $100) account review
• ING Direct - 1.15% ($100K) 1.10% ($50K) Electric Orange Checking
• SFGI Direct - 1.11% (not accepting new accounts) account review
• Incredible Bank - 1.11% Checking ($1K min) account review
• SmartyPig - 1.10% (min $25, max $50K) withdrawal restrictions, account review
• CNB Bank Direct - 1.05% account review
• Clear Sky Accounts - 1.04% (max $250K) account review
• Capital One/Costco - 1.00% InterestPlus Savings ($10K min, includes 10% quarterly bonus) 0.91% (w/o bonus) account review
• Discover Bank - 1.00% Savings (min $500) account review
• ING Direct - 1.00% Orange Savings
• American Express Bank - 1.00%, account review
• Sallie Mae Bank - 1.00% MMA account review
• Ally Bank - 0.99% MMA account review
• Colorado Federal Savings Bank - 0.95% ($2.5K min) account review
• airbanking.com - 0.95% Savings
• Capital One - 0.93% InterestPlus Savings ($10K min, includes 10% quarterly bonus) 0.85% (w/o bonus) account review
• Capital One - 0.91% Checking (rate guaranteed for 1 yr) account review
• Hudson City Savings Bank - 0.90% (min $2.5K)

Reward Checking Accounts:

• Best Reward Checking Account Rates for a $10,000 Balance - Nationally Available
• Best Reward Checking Account Rates for a $25,000 Balance - Nationally Available

• How to View Rates for Your State

• Noteworthy Accounts Available Nationwide:

• Consumers Credit Union - 4.09% (up to $10K) 0.56% ($10K-$25K) 0.35% ($25K+)
• Lake Michigan Credit Union - 3.00% (up to $15K) 0.00% ($15K+)
• ABCO Federal Credit Union - 2.52% (up to $25K) 0.50% ($25K+)
• Pacific Resource Credit Union - 2.27% (up to $15K) 0.61% ($15K+)
• Provident Credit Union - 2.26% (up to $25K) 0.31% ($25K+)
• First New England Federal Credit Union - 2.03% (up to $15K) 0.25% ($15K+) (extra 1% w/relationship)
• Avidia Bank - 2.01% (up to $25K) 0.15% ($25K+)
• Atlantic Coast Bank - 2.01% (up to $15K) 0.50% ($15K+)
• Community Bank of Raymore - 2.01% (up to $25K) 0.50% ($25K+)
• Community Bank of Pleasant Hill - 2.01% (up to $25K) 0.50% ($25K+)
• Connexus Credit Union - 2.00% (up to $25K) 0.50% ($25K+)

Certificates of Deposit:

• Best CD Rates (Nationwide & by State)
• Best IRA CD Rates (Nationwide & by State)

• How to View Rates for Your State

• Survey of the Best CD Rates for September 30, 2011 (Nationwide & Local)

Various Deposit Account Deals

• Bank Promotions
• 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 - 1.25% rate for $50k+, Ford Interest Advantage review
• GE Interest Plus - 1.20% rate for $50k+
• Vanguard Prime Money Market Fund - 0.03% 7-day yield
• Vanguard Tax-Exempt Money Market Fund - 0.03% 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
• PayPal Money Market Fund has ended effective 7/29/11
• FW Thread on Treasury Bills
• I Savings Bonds for 2011, I Bond Article, I Bonds as CD Alternatives

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