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Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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Best Bank Account Interest Rates - Summary for Week Ending June 23, 2012

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There was another Fed FOMC meeting this week with another disappointment for savers waiting for a glimmer of light of higher rates. The FOMC decided to continue Operation Twist through the end of the year which is intended to reduce longer-term interest rates. With long-term interest rates already at record lows, I don't know why the FOMC thinks this will provide any extra boost to the economy. Unfortunately, it seems the only tools the FOMC has in its attempts to help the economy are actions that pushes interest rates down, and based on the FOMC's economic projections, the economy needs help. According to Calculated Risk blog:

The bigger story was the sharp downward revision in the FOMC projections – mostly below the levels of the January projections when it appeared the FOMC was moving towards QE3 (before the stronger payroll reports for January and February). The FOMC projections show the unemployment rate well above the Fed’s target for years, and the inflation rate below the Fed’s target rate.

Even with the downward revisions in the FOMC projections, most Treasury yields rose slightly this week. The summary of Treasury yields and the expectation of future Fed funds rates are shown below. Numbers are based on Yahoo bond rate data and the CME Group FedWatch.

Treasury Yields:

  • 6-month: 0.13% same as last week
  • 2--year: 0.30% up from 0.27% last week
  • 5--year: 0.75% up from 0.67% last week
  • 10-year: 1.68% up from 1.57% last week
  • 30-year: 2.76% up from 2.68% last week

Fed funds futures' probability of rate hike by:

  • Jul 2014: 46% up from 41% last week

The FDIC had a quiet week with no bank failures. This year's total number of bank failures remains at 31.

Savings & Checking Account Rates

The big savings account news this week was the large rate hike at SmartyPig. Its savings account yield increased from 0.70% to 1.00% APY for balances up to $50K. After its rate plummeted in December to 0.70%, I didn't think we would see a rate hike this year.

Another internet bank had a rate hike this week. CNB Bank Direct raised its online savings account rate from 0.70% to 0.80%. This isn't a big enough rate hike to get excited about, but any rate hikes in today's awful interest rate environment is good news.

EverBank's 6-month intro rate of 1.25% continues to be tied with TIAA Direct as the top savings/money market account rate. TIAA Direct has been offering 1.25% APY (without a rate guarantee) on its savings and money market accounts for 18 weeks. Hopefully, the competition of EverBank will encourage TIAA Direct to hold steady. Please refer to this blog post to read my TIAA Direct review and the comments of readers' experiences.

Reward Checking Accounts

Two reward checking accounts on my nationwide list lowered their rates this week.

The first cut was at Bank of Blue Valley which lowered its top yield from 2.00% to 1.50% APY for balances up to $25K. This also has the very unusal requirement of monthly debit card purchases that total at least $1,000 to qualify for this rate. Even before this rate cut, this account wasn't appealing due to this requirement.

The second cut was at Avidia Bank which lowered its top yield from 1.51% to 1.36% for balances up to $25K.

Some of these reward checking account rates are dropping so low that they are losing their appeal as a replacement for internet savings accounts. With TIAA Direct continuing to offer 1.25% APY on all balances without any monthly requirements, it's hard to justify a reward checking account with rates under 2.00%.

To find the highest reward checking rates and balance caps 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.

New Additions:

  1. SmartyPig Savings - 1.00% ($50K max) [was 0.70%]

Removals:

  1. HSBC Online Savings - 0.50% (too low) [was 0.80%]

Rate Hikes:

  1. CNB Bank Direct - 0.80% [was 0.70%]

Rate Cuts:

  1. Bank of Blue Valley Reward Checking - 1.50% (up to $25K) [was 2.00%]
  2. Avidia Bank Reward Checking - 1.36% (up to $25K) [was 1.51%]

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 Savings/MMA - National CD Deals/Resources - National Checking/Savings/CC Bonuses
  • No new posts
Reward Checking Accounts
  • No new posts
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.

Rates as of June 23, 2012

Checking/Savings/Money Market Accounts:

  • Noteworthy Accounts Available Nationwide:

Reward Checking Accounts:

  • Noteworthy Accounts Available Nationwide:

Certificates of Deposit:

Various Deposit Account Deals

Bank Account Alternatives - NOT FDIC Insured

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


Related Posts

Comments
10 Comments.
Comment #1 by Anonymous posted on
Anonymous
What do other saves do in this situation?  I have 200K in a credit union that was paying me 2.5% as my account was grandfethered. Now they have reduces it to .25 over 20000. Wondering where to move this money

2
Comment #4 by Anonymous posted on
Anonymous
#1, Unfortunately there's not much you can do.  Options of reasonably good CD and savings rates just don't exist today and don't look good in the foreseeable future.  There are a few banks and CUs to get 1% or so, but that's about it.  Just have to resign to that fact like I have and live with it unless you want to gamble in the stock market, which I will not.  Or you can rant on about the Feds, like some, but that will only make you more upset and not change a thing.

7
Comment #2 by Anonymous posted on
Anonymous
These rates are redicous! 

3
Comment #3 by Anonymous posted on
Anonymous
I budgeted a  long time ago for Jan 1, 2018 before we get back to 3-4% rates and 5% if we are really lucky.

 

2
Comment #5 by 51hh posted on
51hh
Anon. 1: $200K is a large sum.  You an either split it into 8 RCAs or live with the low-rate CD or bank savings account.

There is few option out there.  We all have to face this choice sooner or later.  I plan to pay off my 3.25% mortgage when this day comes.

1
Comment #6 by Anonymous posted on
Anonymous
Some "brokered" CDs have "coupon yield" of over 4%, current yield of over 3% and yield to worst call

 of less than 1 %. 

Are these worth consideration?

thanks

1
Comment #7 by Anonymous posted on
Anonymous
#6  Where are you finding these high rates on brokered CDs?  The brokerages I deal with are in the tank! Are these 30  year CDs are some really long term ones?  Thanks!

2
Comment #8 by Anonymous posted on
Anonymous
I saw one in today paper,  broker CD 4.25% 6 months, they are gonna try to sell you,  fixed annuities...Life Insurance....Etc... be carefull.. understand what you are getting...

6
Comment #9 by Anonymous posted on
Anonymous
The website got named on NPR's marketplace money as the place to go to figure out where to put your emergency fund, good job!  And thanks from me for helping my finances!

5
Comment #10 by Anonymous posted on
Anonymous
The FED continues it's pushing on a string ponzi scheme stealing from prudent savers.  They continue their fruitless attempt to push prudent savers into risk taking.  They continue to promote consumption to the already overly in debt.  They really should hang it up and let the free market work.  They have so distorted the free markets that no one trusts anyone with their money anymore.  

6