Best Bank Account Interest Rates - Summary for Week Ending December 4, 2011
The November employment report that was released Friday had some good news as this CNNMoney article described:
The unemployment rate fell to 8.6%, the Labor Department reported Friday, the lowest rate since March 2009 and a huge drop from 9% just a month before.
However, the news wasn't as good as it might seem. The Calculated Risk Blog has a review of the report along with several insightful graphs:
This is weak employment growth.
Sure the unemployment rate fell sharply, but that was a combination of the household survey showing more jobs added, and a sharp decline in the labor force.
As you can see in this CR graph, we have a long way to go before we get back to a pre-recession level of unemployment. The best we can hope for is that the economic news is good enough so that the Fed will avoid starting QE3 or other monetary stimulus.
The employment report didn't show enough improvement to impact yields. Short-term Treasury yields fell this week and the Fed Funds futures showed the market's expectations for rate hikes in 2013 have gone down. The yield summary below shows the changes (Numbers are based on Yahoo bond rate data and the CME Group FedWatch.)
Treasury Yields:
- 6-month: 0.03% down from 0.05% last week
- 2--year: 0.25% down from 0.27% last week
- 5--year: 0.91% down from 0.93% last week
- 10-year: 2.03% up from 1.96% last week
- 30-year: 3.03% up from 2.92% last week
Fed funds futures' implied probability for a higher rate by:
- Dec 2012: 4.8% down from 7.4% last week
- Mar 2013: 8.3% down from 14.7% last week
- Jun 2013: 18.4% down from 22.2% last week
There were no bank failures last Friday. However, there was one credit union liquidation. The NCUA liquidated BCT Federal Credit Union in New York. Member accounts were assumed by Visions Federal Credit Union.
Savings & Checking Account Rates
The big savings account news this week was the Friday announcement by SmartyPig. Its savings account yield will be slashed from 1.10% to 0.70% APY. SmartyPig used to be a rate leader, but with this latest rate cut, it's clear they no longer intend to be even close to a rate leader. As I described in my review of this SmartyPig rate cut, this is the first time SmartyPig's rate will be under the rates of both ING Direct and Ally Bank.
ING Direct savings account rate may be higher than the new SmartyPig rate, but that might not last. ING Direct just cut the rates on its savings and checking account by 5 basis points. The Orange savings rate is now 0.85%. It was only October when this yield was 1.00%. Before that October rate cut, the 1.00% had held since February. So I was surprised to see this latest rate cut.
One bit of good news this week was the Flagstar's savings account promotion. The savings account has a promotional 1.25% APY that's guaranteed to last for four months from account opening. As I described in my Flagstar savings account review, the downside is that the rate will definitely plummet after the first four months.
UFB Direct's Airline Rewards Savings Account continues to hold on to the top spot with a 1.30% APY. UFB Direct is Bank of Internet USA's new internet division. I've been told this isn't a promo rate. However, there's no guarantee about how long it'll last. The rate has held since UFB Direct was launched in August.
Some readers have been concerned about FDIC insurance of UFB Direct deposits. The issue is a little complicated since UFB Direct is a division of Bank of Internet USA (now called BofI Federal Bank). As I described in this post, it can take a little effort to verify that UFB Direct deposits are FDIC insured.
Reward Checking Accounts
There continues to be no rate cuts on my short list of nationally available reward checking accounts. However, this wasn't the case for the 4-percent club. These are local deals that offer at least 4.00% APY on balances of at least $25K. The number of these has fallen from 9 to 7. Union Square Credit Union cut its reward checking rate from 4.51% to 3.51% APY. In addition, the balance cap fell from $25K to $15K (Bank still hasn't updated its website). Also, Resource Bank cut its reward checking rate from 4.09% to 3.09% APY for balances up to $25K.
With a 5.01% APY, Southern Bank used to be in the 4% club, but several months ago it fell off this list when its balance cap was reduced from $25K to $15K. However, it was still a good deal with a 5.01% APY. Even though it's not a nationwide deal, it is available to all residents of Missouri and Arkansas. That rate fell this week to 4.01% APY.
If you can find a local reward checking account with a top rate of at least 3% for balances up to $25K, you should consider yourself lucky. As you can see in my list below of the nationally available reward checking accounts, the best yield for a $25K balance cap is 2.52%. There are several local reward checking accounts with yields of 3.00%, and I reported on a new one this week. It's Nicolet National Bank, and it's offering a 3.00% APY on balances up to $25K. There's an online application that's open to anyone in Wisconsin.
To see the reward checking account rates available 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:
- Flagstar savings account promo - 1.25% for first 4 months [0.80% standard rate]
Rate Cuts:
- SmartyPig savings - 0.70% effective 12/9 [currently 1.10%]
- ING Direct EO checking - 0.95% ($100K) 0.90% ($50K) [was 1.00%/0.95%]
- ING Direct Orange savings - 0.85% [was 0.90%]
Certificate of Deposit Rates
My recap of CD rate changes and the list of CD deals will now be in my survey of the best CD rates. This recap 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- Why You Might Want to Stay With Your Bank
- Verifying Your Internet Bank Deposits are FDIC Insured
- My Experience as a Beneficiary Claiming POD Bank CDs
- SmartyPig Announces a Major Rate Cut
- Flagstar Bank's Savings Account Promotion
- Top Savings & Checking Account Rates Continue at Alliant Credit Union
- Survey of the Best CD Rates for December 3, 2011
- Top CD Rates at Bank of America & Chase Bank But With Major Downsides
- Downsides of Checking Account Bonuses - When Is It Not Worthwhile?
- $200 Checking Account Bonus at MB Financial in Parts of IL, IN & PA
- The Berkshire Bank in New York City Changes Its Reward Checking Account
- High-Yield Reward Checking Account at Nicolet National Bank in WI & MI
- Top Mid-Term CD Rates at Valley Green Bank in PA - Local Only
- Top CD Rates at John Marshall Bank in the DC Metro Area - Local Only
- Competitive CD Rates Continue at First American Credit Union in AZ & NM
- Top CD and Savings Account Rates Continue at Cross River Bank in NJ - Local Only
- Short-Term CD Special at 1st Commonwealth Bank of Virginia - Local Only
- Best CD Rates in New York City - Review of Montauk Credit Union & Other Institutions
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)
- Noteworthy Accounts Available Nationwide:
- UFB Direct (Bank of Internet) - 1.30% Savings account review
- Flagstar Bank - 1.25% savings (4-month promo) promo review
- Incredible Bank - 1.18% MMA ($2.5K min) account review
- Alliant Credit Union - 1.15% (min $100) Savings account review
- MyBankingDirect - 1.15% (min $5K) promo rate
- AmTrustDirect - 1.15% (min $10K) promo rate
- SmartyPig - 1.10% (falls to 0.70% on 12/9) (min $25, max $50K) withdrawal restrictions, account review
- Alliant Credit Union - 1.10% Checking account review
- Incredible Bank - 1.06% Checking ($1K min) account review
- Clear Sky Accounts - 1.04% (max $250K) account review
- SFGI Direct - 1.01% account review
- Sallie Mae Bank - 1.00% MMA & Savings account review
- Discover Bank - 1.00% Savings (min $500) account review
- Capital One/Costco - 1.00% InterestPlus Savings ($10K min, includes 10% quarterly bonus) 0.91% (w/o bonus) account review
- CNB Bank Direct - 1.00% account review
- airbanking.com - 0.95% Savings
- ING Direct - 0.95% ($100K) 0.90% ($50K) Electric Orange Checking
- 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
- American Express Bank - 0.90%, account review
- Hudson City Savings Bank - 0.90% (min $2.5K)
- Ally Bank - 0.89% MMA/savings account review
- Colorado Federal Savings Bank - 0.85% ($2.5K min) account review
- ING Direct - 0.85% Orange Savings
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
- 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) 0.50% ($15K+)
- Provident Credit Union - 2.26% (up to $25K) 0.31% ($25K+)
- First New England Federal Credit Union - 2.03% (up to $15K) 0.10% ($15K+) (extra 1% w/relationship)
- Community Bank of Pleasant Hill - 2.01% (up to $25K) 0.50% ($25K+)
- Community Bank of Raymore - 2.01% (up to $25K) 0.50% ($25K+)
- Atlantic Coast Bank - 2.01% (up to $15K) 0.50% ($15K+)
- Connexus Credit Union - 2.00% (up to $25K) 0.50% ($25K+)
- Heritage Bank - 1.71% (up to $25K) 0.10% ($25K+)
- Avidia Bank - 1.66% (up to $25K) 0.10% ($25K+)
- North Country Savings Bank - 1.50% (up to $50K) 0.75% ($50K+)
- West Texas National Bank - 1.26% (up to $25K) 0.25% ($25K+)
- Bank of Internet USA - 1.25% APY (all balances)
Certificates of Deposit:
- Best CD Rates (Nationwide & by State)
- Best IRA CD Rates (Nationwide & by State)
- Survey of the Best CD Rates for December 3, 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 - 0.02% 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
- Series I Savings Bonds for November 2011, I Bond Article, I Bonds as CD Alternatives
Anonymous - #1, Sunday, December 4, 2011 - 11:16 AM
If you believe in Labor Department statistics, you might as well believe in Santa Claus.
They count every unemployed, who does not file for unemployment benefit, as fully employed.
Furthermore, those newly created jobs are mostly temporary jobs and or part time jobs and at the low end of the salary scale.
Only 2000 new jobs in car manufacturing reported. And there you have it, Government is deceitful as always.
They will continue to manipulate the data to benefit the President, who is in campaign mode and not interested in helping this country in anyway.
Anonymous - #2, Sunday, December 4, 2011 - 12:59 PM
So what's new?
The manipulation of employment/unemployment, jobs, and inflation numbers has been going on for years with both major political parties equally guilty. Rome is burning or rather the U.S. Just a matter of time before all is lost.
Anonymous - #3, Sunday, December 4, 2011 - 3:31 PM
FEDs are hiding the real inflation rate and are manipulating the interest rates.
Labor Department is hiding the real unemployment data.
Treasury is hiding the real deficit numbers.
SS administration receives less in revenue (taxes) than is paying out.
Medicare is already broke and are cutting the doctors payments.
Obamacare already is $300 billions in the hole and have not officially started yet.
Shell I go on....., well you get the picture, so don’t expect better rates for the savers until this administrations is gone, together with Bernanke, Geithner and all those Czars appointed by the President.
Only the return of free market economy will make the things better for the savers, until then, there is no point to expect anything but disappointments.
Brett CPA (anonymous) - #4, Sunday, December 4, 2011 - 9:49 PM
One point which I want to make about savers. It's not just about folks over 50. I have MANY younger clients, 25-50 years old, who are trying to save for home ownership, a new car, college for their kids, etc. and the lousy interest rates are hurting them too. If you're right out of college, in your first job, newly-married, etc. and are trying to save for a major purchase, let's say a house or condo, 1% interest rates for your savings or 401k is making it harder to reach your goal. Not to mention retirement many years later. I never see this addressed or discussed. It's not just "grandma" who the Fed is hurting, it's younger savers too. Not everyone under 40 is spending everything on iPads and lattes. Many are responsible and thrifty.
Anonymous - #5, Sunday, December 4, 2011 - 9:57 PM
Brett #4: I don't think the gov wants the younger folks to "save". I think they want them to take out "loans" and buy everything on credit. I just sent emails to Obama, McConnell, and Rand Paul today on a medical issue but I like what you wrote about the young and their being unable to save. If you don't mind, I might like to put that in my own words and remind those people in Washington about how the low interest rates hurt the young as well as the old. Thanks for posting it.
Anonymous - #6, Monday, December 5, 2011 - 7:23 AM
I, too, go along with the idea that responsible 25-50 year olds are also getting very very hurt by the lack of earning interest on their deposits, both in their savings as well as their IRAs and Roth IRAs and 401Ks. In fact, I notice that over the last 5 years or so, the majority of the funds in nontaxable and taxable accounts of some I know are all "under water" --- worth less than what was put in. I was mistakenly under the assumption that with the market (both bonds including Treasuries and stocks) up for the time being they would at least be in a break-even situation, but to my dismay, not so. So I thought about it and thought about it and realized that it's only the big pension funds, hedge funds and traders that are up on the market (again bonds and stocks) . They go in and out on a daily basis (some of them with leveraged bets on borrowed money) while our children's 401Ks sit in mutual funds for the long term and take a killing while the large trading population reaps the profits.
It's time to re-examine the idea of putting your money in the market (whether it be bonds or stocks) for retirement and letting it grow. There are a bunch of thieves out there legally stealing your earnings because our government allows and encourages them to --- in my opinion of course.
They are helped along all the way by, in my opinion, by Ben Bernanke and his merry band of thieves (the FOMC), all the time devaluing the U.S. dollar and increasing the cost of things like food, home heatnig oil and gasoline.
51hh - #7, Monday, December 5, 2011 - 7:34 AM
One of the worst myths is that one needs to put 401K into equity. The stock market takes no prisoners. And it is indeed a gambling casino. Think about it, all professionals, novices, Government, banks, etc. all are into it. Why do you think, as a poorly-equipped investor, will ever come out ahead??
All these silly poeple come up with smart strategies like asset allocation, fund diversification, etc.. The bottom line is when the market is in bear mode, all funds go under the water. And vice versa.
So wake up and take full control of your hard-earned money!!!
Brett CPA (anonymous) - #8, Monday, December 5, 2011 - 8:11 AM
To Anonymous #5: Go for it. I don't mind at all.
I also agree with all that you wrote.
To Anon. #6: You are also correct. Many younger people have their 401k's in these crazy "Targeted age" funds, let's say a "2050 Year Fund" that is based on their theoretical retiremenent age/year. These funds tend to be very aggressive based on the premise that younger people have a long time to "recoup" any losses. BEWARE! Many are in negative territory and have been for years. So someone who put $20,000 in their 401k may now have $16,000. They also tend to have high managment fees. A big loser.
Anonymous - #9, Monday, December 5, 2011 - 7:29 PM
51hh - I agree with what you said. The market was essentially flat for the past decade. Since the tech bubble burst beginning in 2000, you ended up with virtually no return for the past decade. You have very little alternatives to the market with savings rates near 0%. The best returns were in precious metals for the past decade, but that means taking on even more risk.
Terrence (anonymous) - #10, Monday, December 5, 2011 - 7:58 PM
to Anonymous #9- I recommend some collectibles to my clients (I'm a Cert. Fin. Planner in Ohio). Some classifications of collectibles (rare coins, vintage metal toys, early 20th c. furniture) have appreciated by an avg. of 8-10% annually over the last 15-20 years. You would have to educate yourself on these items (not hard to do), or connect with a reputable dealer who could guide you. If you buy things correctly, there is very little downside risk and a very realistic likelihood of at least 5-6% gains per yr. going forward. Plus, you can enjoy having these items. Just a suggestion. And of course, if inflation returns and the economy improves, these items will do even better.
Anonymous - #11, Tuesday, December 6, 2011 - 1:13 AM
#10 - you may have just sunk our hopes to the absolute bottom of the investment bucket. Good luck to you and your clients. Furniture and toys! lol
Anonymous - #12, Tuesday, December 6, 2011 - 7:41 AM
#11: Don't knock #10. My great aunt buys signed prints at auction and makes 10% on her money on a very consistent basis. I'm not saying that it is for everyone (she really knows her stuff), but collectibles certainly aren't the "absolute bottom of the investment bucket," as you say. 1% CD's are much closer to the bottom IMHO.
Anonymous - #13, Tuesday, December 6, 2011 - 4:43 PM
Terrrence -
This is Anonymous #9. I bought a large number of Morgan Silver Dollars back in the early 2000s when silver was about $5 an ounce and some gold coins when gold was around $300 to $400 an ounce. So I would make a handy profit if I sold my holdings now. Should I buy even more now? The market now is a bit more risky. It all has to do with timing for precious metals. You can get easily burned if you buy at the wrong time. Peraonally, I would not place my retirement money into this sector. For me perceived value of a collectible is not something that I would bet my future retirement on.
Terrence (anonymous) - #14, Tuesday, December 6, 2011 - 5:22 PM
To Anonymous #13:
If you re-read my post, you'll see that I was talking about rare coins/collectibles, not really precious metals. I agree that gold and silver can be risky, although many now think that they are good investments. I have been seeing some good, stable returns from collectible coins not tied to gold and silver. But you have to look into that and see if it is something that you are comfortable with. There are some collectibles with very reliable values, not just "perceived values," and many have had extremely consistent upward value trends. Good luck.
Brian (anonymous) - #15, Thursday, December 8, 2011 - 10:39 PM
Ok #12, thanks much for the info, looks like your great aunt has got it all figured out...good for her. Will she also do the print thingys for IRA's on a commission basis? If so, how do we contact her?
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