Deposit Rate Survey and Commentary for January 2013

Over the last year we have been issuing monthly press releases. These are intended to highlight important DepositAccounts.com articles from the previous month. They are also intended to provide a summary of average deposit account rates and how they have changed in the last month. We thought these press releases would be of interest to readers. Thus, I've been posting them in the blog. The January press release is below. Please note that I will continue to post my weekly summaries without any changes.

Why Savers Can't Be Complacent - DepositAccounts.com Monthly Rate Survey and Commentary

Across a nationwide survey of more than 275,000 rates at 8,000 banks and credit unions, average savings account interest rates continued a steady decline in most major categories of consumer savings products. The average internet savings account rate declined slightly this month due to a handful of internet banks that have let their rates fall to levels that are no longer competitive. One example is CNB Bank Direct, which is the internet division of Citizens National Bank in Ohio. CNB Bank Direct was launched in 2008 with very competitive rates, and the rates stayed competitive until 2012, but its savings account rate has now fallen to less than half of the average for internet banks. Another example is HSBC, which had offered top internet savings account rates in 2007. The rate plummeted in 2012, and like CNB Bank Direct, its rate is less than half of the average. The lesson for savers is that they can't be complacent with their internet bank accounts. Savers should stay on top of rate changes and move their money when the rates no longer remain competitive. With many internet banks offering above-average rates, savers do not have to settle for rates far below average.

Top Stories for December:

• Review of the 2012 Bank Failures and Their Effects on Depositors
• Replacing Savings Accounts with an Interest Checking Account
• Credit Unions Paying Out 2012 Bonus Dividends
• How Do You Define a Community Bank?
• Preventing Accounts From Being Labeled Inactive - Review of PenFed's Policy

Bank Failures for December

One bank and three credit unions were closed in December 2012. This total is equivalent to the two banks and two credit unions that closed in December 2011. Notable closures included Chetco Federal Credit Union in Oregon with $259.0 million in assets (rated 1-star at DepositAccounts.com, indicating “high risk”; view health ratings for any bank or credit union and a list of troubled banks by Texas ratios).

Internet Savings

The average internet savings and money market account rate decreased by 0.32% from 0.662% in December to 0.660% in January. The average rate for internet savings accounts exceeds the average rate of all savings accounts by 47 basis points.

Savings

The average savings account rate decreased by over 2% from 0.196% in December to 0.192% in January. The average rate among the top 10% of the most competitive nationwide banks decreased by over 1% from 0.613% to 0.605%. Alabama has the best average rate in the nation at 0.33% while Arizona has the worst at 0.12%.

Checking

The average checking account rate decreased by over 2% from 0.124% in December to 0.121% in January. The average rate among the top 10% of the most competitive nationwide banks decreased by over 2% from 0.410% to 0.399%. Louisiana has the best average rate in the nation at 0.180% while Vermont has the worst at 0.060%.

1-year CD

The average 1-year CD rate decreased by over 2% from 0.454% in December to 0.447% in January. The average rate among the top 10% of the most competitive nationwide banks decreased by over 1% from 0.892% to 0.886%. Louisiana has the best average rate in the nation at 0.580% while Oregon has the worst at 0.310%.

5-year CD

The average 5-year CD rate decreased by over 2% from 1.320% in December to 1.300% in January. The average rate among the top 10% of the most competitive nationwide banks decreased by over 1% from 1.934% to 1.917%. Rhode Island has the best average rate in the nation at 1.530% while North Carolina has the worst at 1.090%.

Reward Checking

The average reward checking account rate decreased by over 1% from 0.978% in December to 0.964% in January. The average rate among the top 10% of the most competitive nationwide banks decreased by over 1% from 3.014% to 2.984%. The average balance cap for reward checking accounts decreased from $20,535 to $20,471. The balance cap is the maximum balance that qualifies for the reward checking account's top rate. Louisiana has the best average rate in the nation at 1.590% while Hawaii has the worst at 0.380%.

About Deposit Accounts

DepositAccounts.com monitors more than 8,000 banks and credit unions and provides weekly and monthly rate surveys and monthly commentary covering savings trends. On its consumer-facing site, DepositAccounts.com, it provides in-depth, unbiased reviews and the industry’s most thorough comparison tools to help better inform consumers in their banking decisions.