Best Bank Account Interest Rates - Summary for Week Ending February 18, 2012

The economy continued to show improvements this week with positive reports in manufacturing and unemployment. January's CPI numbers were released Friday. The core CPI which excludes food and energy increased by 0.2% in January and 2.3% over the last 12 months. According to the BLS report, that's the "largest 12-month increase since September 2008," and according to Calculated Risk, "these measures show inflation is still above the Fed's 2% target." With signs of economic growth and higher inflation, this may reduce the chance the Fed will start QE3 later this year. However, the FOMC minutes that were released on Wednesday reveal QE3 is being considered. According to the minutes:

A few members observed that, in their judgment, current and prospective economic conditions--including elevated unemployment and inflation at or below the Committee's objective--could warrant the initiation of additional securities purchases before long.

Let's hope the economy continues to improve and the few inflation hawks on the Fed are willing to fight against QE3 and other efforts to further drive down interest rates.

The strong economic reports did appear to have an effect on Treasury yields and the Fed fund futures. Most yields did go up. The summary of the yields is shown below (Numbers are based on Yahoo bond rate data and the CME Group FedWatch.)

Treasury Yields:

• 6-month: 0.10% down from 0.11% last week
• 2--year: 0.29% up from 0.27% last week
• 5--year: 0.86% up from 0.82% last week
• 10-year: 2.00% up from 1.98% last week
• 30-year: 3.14% unchanged from last week

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

• Dec 2013: 49.0% up from 39.1% last week
• Sep 2014: 79.4% down from 80.5% last week

The big internet banking news this was the Fed's approval of Capital One's acquisition of ING Direct. Just three days after the approval, Capital One completed the acquisition. The transition of ING Direct into Capital One will likely take some time. According to Capital One, ING Direct customers will "experience no changes to account services and functionality." One small and immediate benefit for ING Direct customers is that they can now use Capital One ATMs in addition to Allpoint ATMs to make free cash withdrawals.

This was another week without any bank failures. The total number of bank failures for the year remains at 9.

Savings & Checking Account Rates

There were more savings and checking account rate cuts than usual this week. On my list of top savings and money market accounts, four banks cut their rates.

UFB Direct had yet another rate cut. With several rate cuts in the last month, the UFB Direct savings account yield has fallen from 1.30% to 0.90%.

Another disappointment occurred on Friday. Incredible Bank reduced its money market yield from 1.10% to 1.05% for balances up to $250K. It's starting to look like a 1.00%+ savings or money market account yield is becoming an endangered species.

The current rate leaders continue to be Flagstar Bank and the two internet banks of New York Community Bank (AmTrustDirect and MyBankingDirect). All three continue to offer 1.15% APY on their savings and money market accounts. However, Flagstar Bank's 1.15% APY is only an intro rate that will fall after four months. So if you want a chance at a rate that will stay competitive, AmTrustDirect and MyBankingDirect would be a better choice. I reviewed AmTrustDirect's Premium e-Money Market Account earlier this month.

Reward Checking Accounts

Three banks on my short list of nationally available reward checking accounts reduced their rates this week. Bank of Blue Valley was one. The top rate of its Ultimate Checking Account fell from 3.00% to 2.00% APY for balances up to $25K. To qualify for this top rate, customers must make a total of at least $1,000 in debit card purchases. That tough requirement was hard to justify even before this rate cut.

On the plus side, I added a new reward checking account to the nationwide list. First Security Bank & Trust has opened up its reward checking account to people in all states. Applications can be done online. Its top rate is 2.30% APY for balances up to $15K.

The two remaining members of the 4-percent club, Coppermark Bank and Southwest Airlines FCU, held steady this week. These are the only reward checking accounts in the nation that pay 4.00% APY on balances of $25K. Neither are available nationwide. Coppermark Bank is local to parts of Oklahoma and Texas. Southwest Airlines FCU is primarily limited to Southwest Airlines employees and a few other employee groups.

To find the highest reward checking rates in your area, please refer to our reward checking rate table. This can be used to find accounts available nationwide and accounts with higher rates in your state. If you're new to these tables, my new 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.

Additions:

1. First Security Bank & Trust reward checking - 2.30% up to $15K

Rate Hikes:

1. None

Rate Cuts:

1. Bank of Blue Valley reward checking - 2.00% up to $25K [was 3.00%]
2. Atlantic Coast Bank reward checking - 1.50% up to $15K [was 2.01%]
3. State Bank of Toledo reward checking - 1.31% up to $25K [was 1.51%]
4. Incredible Bank MMA - 1.05% up to $250K [was 1.10%]
5. UFB Direct Savings - 0.90% [was 0.95%]
6. Nationwide Bank MMA - 0.85% [was 0.90%]
7. CNB Bank Direct Savings - 0.80% [was 0.85%]

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

• Fed Approves Capital One's Acquisition Of ING Direct
• More Publicity on CEFCU's CD Early Withdrawal Penalty Change

Savings/Checking Accounts - Nationwide

• No new posts this week

CD Deals/Resources - National

• Survey of the Best CD Rates for February 17, 2012
• Top CD & IRA CD Rates at Northwest Federal Credit Union - Easy Membership

Checking/Savings/CC Bonuses

• Top Checking Bonus & CD Rates at American Heritage FCU in Philly

Reward Checking Accounts

• Another Nationally Available Reward Checking Account
• Can Reward Checking Remain a Good Alternative to Internet Banks?

CD and Money Market Deals - Local

• Competitive CD Rates at Texas Brand Bank in Dallas Metro - Local Only
• Competitive 5-Year CD & IRA CD Rates at Actors FCU - Limited Membership
• Top CD Rates at Charleston Area Credit Union - Local Only
• Top 2-Year IRA CD Rate in New York City at Atlas Bank - Local Only
• Competitive CD Rates at Clinton Savings Bank - MA Only
• Top CD Rates at Afena Federal Credit Union in Indiana - Local Only
• Presidents' Day CD Special at Capitol Federal Savings Bank - KS Only
• CD & Money Market Specials at American Bank of Missouri - Local Only
• Special 5-Year CD with a Top Rate But with a Catch at Belmont Savings Bank - MA Only

Posts from Previous Weeks

• Archive of 2012 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 February 18, 2012

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:

• AmTrustDirect - 1.15% (min $5K) promo rate
• MyBankingDirect - 1.15% (min $5K) promo rate
• Flagstar Bank - 1.15% savings (4-month promo) promo review
• Incredible Bank - 1.05% MMA ($2.5K min) account review
• Incredible Bank - 1.01% Checking ($1K min) account review
• Salem Five Direct - 1.00% savings (guaranteed thru Aug statement cycle for new customers)
• Alliant Credit Union - 1.00% (min $100) Savings account review
• Clear Sky Accounts - 0.95% (max $250K) account review
• One United Bank - 0.95% ($100K) 0.85% ($1K) E-Money Market
• Alliant Credit Union - 0.95% Checking (req's elec. dep & e-stmts) account review
• SFGI Direct - 0.91% account review
• Discover Bank - 0.90% Savings (min $500) account review
• American Express Bank - 0.90%, account review
• ING Direct - 0.90% ($100K) 0.85% ($50K) Electric Orange Checking
• Sallie Mae Bank - 0.90% MMA account review
• Capital One/Costco - 0.90% InterestPlus Savings ($10K min, includes 10% quarterly bonus) 0.82% (w/o bonus) account review
• UFB Direct (Bank of Internet) - 0.90% Savings account review
• Colorado Federal Savings Bank - 0.85% ($2.5K min) account review
• Sallie Mae Bank - 0.85% Savings account review
• Nationwide Bank - 0.85% MMA (min $1K)
• Ally Bank - 0.84% MMA/savings account review
• HSBC Advance - 0.80% Savings
• ING Direct - 0.80% Orange Savings
• CNB Bank Direct - 0.80% account review
• Capital One - 0.71% InterestPlus Savings ($10K min, includes 10% quarterly bonus) 0.65% (w/o bonus) account review
• Capital One - 0.60% Checking (rate guaranteed for 1 yr) account review

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+)
• INOVA Federal Credit Union - 3.00% (up to $20K) 0.30% ($20K+)
• Lake Michigan Credit Union - 3.00% (up to $15K) 0.00% ($15K+)
• ABCO Federal Credit Union - 2.52% (up to $25K) 0.50% ($25K+)
• First Security Bank & Trust - 2.30% (up to $15K) 0.60% ($15K+)
• Pacific Resource Credit Union - 2.27% (up to $15K) 0.50% ($15K+)
• Provident Credit Union - 2.26% (up to $25K) 0.31% ($25K+)
• 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+)
• Bank of Blue Valley - 2.00% (up to $25K) 0.35% ($25K+), $1K/month debit card req (account review)
• Heritage Bank - 1.71% (up to $25K) 0.10% ($25K+)
• Avidia Bank - 1.66% (up to $25K) 0.10% ($25K+)
• First New England Federal Credit Union - 1.52% (up to $15K) 0.10% ($15K+) (extra 1% w/relationship)
• North Country Savings Bank - 1.50% (up to $50K) 0.75% ($50K+)
• Atlantic Coast Bank - 1.50% (up to $15K) 0.50% ($15K+)
• State Bank of Toledo - 1.31% (up to $25K) 0.20% ($25K+)
• West Texas National Bank - 1.26% (up to $25K) 0.25% ($25K+)
• Bank of Internet USA - 1.25% (all balances)

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 February 17, 2012 (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 - 0.04% 7-day yield
• Vanguard Tax-Exempt Money Market Fund - 0.04% 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

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