Best Bank Account Interest Rates - Summary for Week Ending January 5, 2013

The big economic news this week was the fiscal cliff compromise. There are many issues with the compromise, but it has reduced concerns that the economy will be dragged back into recession. The Calculated Risk Blog explained it well in its summary for the week:

it appears the amount of austerity will not be large enough to drag the economy into a new recession. Still, austerity will be a drag in 2013 and that probably means another year of sluggish growth.

We saw sluggish growth in 2012, and this is likely to continue in 2013. Friday's employment report is another indication of this. The job growth for December was mediocre, and the unemployment rate remains high at 7.8%.

One surprise development this week came from the release of the Fed's December meeting minutes. It showed that several FOMC members thought the Fed should cut back on its quantitative easy (QE) before the end of 2013. It's debatable if this is really a sign that the Fed will end QE earlier than expected. Nevertheless, that's how the market interpreted it. This and the fiscal cliff deal pushed Treasury yields higher. According to Bloomberg, "Treasury 10-year yields soared the most since March" this week. Treasury yield changes over the last week 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: 0.09% up from 0.08% last week
• 2--year: 0.26% up from 0.24% last week
• 5--year: 0.81% up from 0.71% last week
• 10-year: 1.90% up from 1.70% last week
• 30-year: 3.10% up from 2.86% last week

Fed funds futures' probability of rate hike by:

• Jan 2015: 61% up from 58% last week
• Apr 2015: 74% up from 68% last week

There were no bank failures or credit union failures this week. There were a total of 51 bank failures and 15 credit union failures in 2012. I have more details in my review of the 2012 bank failures.

Savings & Checking Account Rates

The first week of the new year was quiet with no rate cuts on my list of the top nationally available savings and money market accounts. There was one rate hike, but it wasn't a surprise since it was announced last month. Effective on January 2nd, FNBO Direct increased its online savings account rate from 0.65% to 0.85%. It's not high enough to get excited about it, but it's high enough to qualify for my list. I'm a little worried that this rate is just temporary to prevent customers who participated in FNBO Direct's savings promo from moving their money. Hopefully, it's a sign that FNBO Direct intends to keep the savings account competitive. FNBO Direct had done a decent job at this before 2011, but in late 2011 and early 2012 the rate plummeted.

One bank that will probably never bring back a competitive online savings account rate is HSBC. Its online savings account had yet another rate cut this week. Its rate is now only 0.20%. This account dropped off my list in June when the rate fell from 0.80% to 0.50%. It's clear that HSBC has essentially given up on its online savings account and has no intention of keeping the rate competitive.

It's interesting to note that the online savings accounts at HSBC and FNBO Direct had a yield of 6.00% back in 2007. They were both rate leaders back then.

For today's rate leaders, I have 12 banks and credit unions on my list with non-promo savings or money market account yields of at least 1.00%.

For those with large balances, the best non-promo deal continues to be at Connexus Credit Union which has a money market account that pays 1.15% APY for balances of at least $100K. The next best are the four internet banks with money market accounts that continue to pay 1.05% APY.

Two internet banks are offering 1.25% APY, but these are promo rates. You can also get 1.10% APY at AmericaNet Bank and its two sister banks, but all three have a $35K balance cap.

Reward Checking Accounts

On my list of nationally available reward checking accounts, two institutions cut their reward checking rates this week. The most disappointing cut was at Provident Credit Union which reduced its yield from 2.01% to 1.76% for balances up to $25K. This leaves ABCO Federal Credit Union as the only institution on my list with a reward checking account with a yield of at least 2% for balances up to $25K. Provident is now tied with Connexus Credit Union with essentially the same rate for balances up to $25K.

The second institution with a rate cut this week is Heritage Bank. Its yield fell from 1.61% to 1.51% for balances up to $25K.

If you want a reward checking account with a balance cap of at least $25K, there are only six institutions on my list that have this balance cap (at minimum) and have a top yield of at least 1.50%.

There are still new reward checking accounts being introduced, but these are local deals. I reviewed two Illinois banks with new reward checking accounts this week. One has a 4.07% APY and the other has a 2.50% APY. However, both have a balance cap of only $15K.

There are still many local deals with balance caps of $25K and yields over 2.00%. To find the highest reward checking rates and balance caps in your state or nationwide, please refer to our reward checking rate table. If you're new to these tables, my rate table guide should be useful. If you're new to reward checking, please refer to my blog post, 10 Common Traits of High-Yield Reward Checking.

Rate Hikes:

1. FNBO Direct Savings - 0.85% [was 0.65%]

Rate/Balance Cap Cuts:

1. Provident Credit Union reward checking - 1.76% (up to $25K) [was 2.01%]
2. Heritage Bank reward checking - 1.51% (up to $25K) [was 1.61%]
3. HSBC Online Savings - 0.20% [was 0.30%]

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

• Happy New Year! - My 12 Top Posts of 2012
• Review of the 2012 Bank Failures and Their Effects on Depositors
• Five New Year's Resolutions to Jump Start Your Savings

Savings/MMA - National

• No new posts this week

CD Deals/Resources - National

• Survey of the Best CD Rates for January 4, 2013
• Pen Air Federal Credit Union Falls Off 5-Year CD Rate Leader Spot
• New CD, Savings & Money Market Specials at Citizens State Bank - Available Nationwide
• PenFed Increases CD Rates Again - Top 1-, 2- & 3-Year CD Rates

Checking/Savings/CC Bonuses

• New $100 Checking Account Bonus at First Trade Union Bank

Reward Checking Accounts

• New Reward Checking Accounts in Illinois

CD and Money Market Deals - Local

• Top Long-Term CD & IRA CD Rates at Columbia Bank - NJ 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 January 5, 2013

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:

• TIAA Direct - 1.25% MMA/Savings (not accepting new customers) account review
• EverBank - 1.25% MMA/Checking (6mo intro rate) 0.76% ongoing rate, account review
• Salem Five Direct - 1.25% savings, for new customers only (~0.75% for existing customers)
• Connexus Credit Union - 1.15% ($100K) 1.00% ($50K) 0.75% ($20K) active chk required
• Evantage Bank - 1.10% MMA (up to $35K) 0.50% (over $35K)
• AmericaNet Bank - 1.10% MMA (up to $35K) 0.50% (over $35K)
• Redneck Bank - 1.10% MMA (up to $35K) 0.50% (over $35K)
• Incredible Bank - 1.05% MMA ($2.5K min) account review
• MyBankingDirect - 1.05% (min $5K)
• Union Federal Savings Bank - 1.05% MMA (min $2.5K) account review
• Sallie Mae Bank - 1.05% MMA account review
• SmartyPig - 1.00% ($50K max), account review
• Barclays - 1.00% Savings account review
• Acacia Federal - 1.00% Metro Checking, account review
• Acacia Federal - 1.00% MMA (min $25K), account review
• CIT Bank - 1.00% ($25K) 0.90% ($0) Savings, account review
• ableBanking - 0.96% MMA (min $1K)
• Ally Bank - 0.95% MMA/savings
• SFGI Direct - 0.94% account review
• AloStar Bank of Commerce - 0.91% ($50K) 0.50% ($0) MMA Advantage
• American Express Bank - 0.90%, account review
• Sallie Mae Bank - 0.90% Savings account review
• Incredible Bank - 0.88% Checking ($1K min) account review
• FNBO Direct - 0.85% Savings
• ING Direct - 0.85% ($100K) 0.80% ($50K) Electric Orange Checking
• Colorado Federal Savings Bank - 0.85% ($2.5K min) account review
• UFB Direct (BofI Federal) - 0.80% MMA/savings account review
• Alliant Credit Union - 0.80% (min $100) Savings account review
• Discover Bank - 0.80% Savings (min $500) account review
• Clear Sky Accounts - 0.80% (max $250K) account review
• Nationwide Bank - 0.76% MMA (min $1K)
• ING Direct - 0.75% Orange Savings
• Alliant Credit Union - 0.75% Checking (req's elec. dep & e-stmts) account review
• One United Bank - 0.75% ($100K) 0.70% ($25K) 0.65% ($1K) E-Money Market

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 - 3.09% (up to $5K) 0.20% ($5K-$25K) 0.10% ($25K+)
• Money One Federal Credit Union - 3.01% (up to $10K) 0.51% (over $10K)
• Lake Michigan Credit Union - 3.00% (up to $15K) 0.00% ($15K+)
• Capital Educators Federal Credit Union - 2.50% (up to $10K) 0.20% ($10K+)
• ABCO Federal Credit Union - 2.12% (up to $25K) 0.30% ($25K+)
• INOVA Federal Credit Union - 2.00% (up to $20K) 0.15% ($20K+)
• Evantage Bank - 2.00% (up to $10K) 0.50% (over $10K)
• AmericaNet Bank - 2.00% (up to $10K) 0.50% (over $10K)
• Redneck Bank - 2.00% (up to $10K) 0.50% (over $10K)
• First Tech Federal Credit Union - 1.78% (up to $10K) 0.21% ($10K+)
• Provident Credit Union - 1.76% (up to $25K) 0.11% ($25K+)
• Pacific Resource Credit Union - 1.75% (up to $15K) 0.50% ($15K+)
• Community Bank of Pleasant Hill - 1.75% (up to $10K) 0.50% ($10K+)
• Community Bank of Raymore - 1.75% (up to $10K) 0.50% ($10K+)
• Connexus Credit Union - 1.75% (up to $25K) 0.50% ($25K+) Xtraordinary Checking
• First New England Federal Credit Union - 1.52% (up to $15K) 0.10% ($15K+) (extra 1% w/relationship)
• Heritage Bank - 1.51% (up to $25K) 0.10% ($25K+)
• BankFirst Financial Services - 1.50% (up to $50K) 0.25% ($50K+)
• Legence Bank - 1.50% (up to $25K) 0.25% ($25K+)
• Avidia Bank - 1.36% (up to $25K) 0.05% ($25K+)
• West Texas National Bank - 1.26% (up to $25K) 0.25% ($25K+)
• Bank of Internet USA - 1.25% (all balances)
• Bank of Blue Valley - 1.25% (up to $15K) 0.10% ($15K+), $1K/month debit card req (account review)
• North Country Savings Bank - 1.05% (up to $25K) 0.75% ($25K+)
• State Bank of Toledo - 1.00% (up to $25K) 0.15% ($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 January 4, 2013 (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 - NOT FDIC Insured

• Ally Financial Demand Notes - 1.75%, Ally Demand Notes review
• Duke Energy PremierNotes - 1.50% rate for $50K+, Duke Energy PremierNotes review
• Ford Interest Advantage - 1.10% rate for $50k+, Ford Interest Advantage review
• GE Interest Plus - 1.10% rate for $50k+
• Vanguard Prime Money Market Fund - 0.02% 7-day yield
• Vanguard Tax-Exempt Money Market Fund - 0.01% 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 Bond Purchases from Nov 2012 thru Apr 2013, I Bond Article, I Bonds as CD Alternatives

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