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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 August 31, 2013

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Even though Treasury yields were down a little for the week, they were up for the month, and that’s the fourth straight month of rising Treasury yields. Expectations continue to be fairly strong that the Fed will start tapering its bond buying program at its next meeting on September 17-18th. That’s the first step of a long process of monetary tightening that will eventually lead to higher Fed funds rates and higher savings account rates. We’ll know more this time next week after next Friday’s employment report for August. If the report meets or exceeds the expectations for job growth, that will give the Fed the data it needs to start tapering.

The higher Treasury yields have only had limited effects on deposit account rates. As I mentioned yesterday, most of the effects have been on long-term CD rates. We haven’t seen rate hikes on savings accounts and money market accounts. In fact, we’re still seeing some rate cuts. So if we are at a turning point in this awful interest rate environment, it may be a few years where most of the rate hikes will be on long-term CDs while short-term CDs and savings account rates remain low. That won’t make it easy for savers to decide between savings accounts, short-term CDs and long-term CDs.

This week’s change in Treasury yields and Fed funds futures are shown below. The following numbers are based on Daily Treasury Yield Curve Rates and the CME Group FedWatch.

Treasury Yields:

  • 6-month: 0.05% down from 0.06% last week
  • 2--year: 0.39% down from 0.40% last week
  • 5--year: 1.62% down from 1.66% last week
  • 10-year: 2.78% down from 2.82% last week
  • 30-year: 3.70% down from 3.80% last week

Fed funds futures' probability of rate hike by:

  • Jan 2015: 74% up from 73% last week
  • Apr 2015: 88% down from 89% last week

No banks failed this week so the total number of bank failures for the year remains at 20. As a comparison, at this time last year there had been 40 bank failures for the year.

Savings & Checking Account Rates

There was just one bank on my list of top nationally available savings and money market accounts that changed its rate this week. MyBankingDirect reduced its money market account yield from 1.05% to 0.80%. This same rate cut was also made by AmTrustDirect. Both are internet divisions of New York Community Bank. The 1.05% yield had been the highest non-promo savings/money market rate that didn’t have a balance cap or checking requirement. The new 0.80% yield now puts the bank in the bottom half of my list.

Some may wonder why MyBankingDirect made this rate cut after holding steady with 1.05% since June 2012. One reader mentioned the possibility of the FDIC rate caps. The current FDIC money market rate cap is 0.84%. The FDIC rate caps should only be applicable to less than well capitalized institutions. That does not seem to be the case for New York Community Bank. In my opinion, MyBankingDirect probably felt it had attracted enough deposits. It’s rare for banks to be a rate leader for multiple years. Eventually, they’ll exceed their deposit goals, and there will no longer be a reason to be a rate leader. If you want the best savings/money market rates, you should expect that you’ll have to move your money at least once a year.

Connexus Y.E.S. Money Market Account continues to hold the top spot with a top-tier APY of 1.15% for a $100K minimum balance. An important downside of this account is that it requires an active checking account and direct deposit.

With MyBankingDirect’s rate cut, second place is a tie between the savings accounts of Palladian Private Bank and SmartyPig. Both offer 1.00% APY with no balance cap. SmartyPig has held steady with a 1.00% APY since June 2012.

Reward Checking Accounts

This was another quiet week for reward checking rate changes, at least for those on my list of nationally available accounts. There were no rates or balance cap changes.

Even though there were no rate changes, there was one addition to the list. I added Franklin Bank & Trust Company’s reward checking account, Kasasa Cash. Its top yield is 2.10% for balances up to $25,000. That puts it on top as the best deal for a $25,000 balance cap. It just slightly exceeds Security Bank’s reward checking account which I added to the list last week. Both banks are currently allowing people from any state to apply online for the accounts. Both are small banks, so these accounts may not remain nationally available. We have seen many cases of banks restricting their reward checking accounts to their local market areas when the accounts become too popular.

The brand of reward checking accounts called Kasasa Cash has slowly been growing around the nation for the last several years. The company behind Kasasa, BancVue, continues to heavily market the brand, and that was apparent this week with its free gas promotion. Hopefully, that will encourage more banks and credit unions to offer Kasasa Cash.

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.

Additions

  • Franklin Bank & Trust Company reward checking - 2.10% (up to $25K) 0.25% ($25K+) now nationally available

Rate Hikes:

  • None

Rate/Balance Cap Cuts:

  • MyBankingDirect/AmTrustDirect MMA - 0.80% [was 1.05%]

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
  • No new posts for this week
CD Deals/Resources - National Checking/Savings/CC Bonuses
  • No new posts for this week
Reward Checking Accounts 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 August 31, 2013

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
7 comments.
Comment #1 by Robert (anonymous) posted on
Robert
Ken - are you willing to make a prediction for how many years it will be before we see a savings account/money market account offering 5% APY?  Three years?  Five years?  Yes, I am asking you to look into a crystal ball, but I'm guessing your crystal ball is better than mine.

5
Comment #2 by Anonymous posted on
Anonymous
Never

4
Comment #3 by Anonymous posted on
Anonymous
#2 Never say never. All it would take is for foreigners to stop or significantly reduce buying US bonds etc and interest rates would rise dramatically. However, this would affect long-term rates the most, so maybe you are correct if the question pertains only to MM and savings, and not to longer term CDs.

1
Comment #5 by Anonymous posted on
Anonymous
Robert, MM rates may go up to perhaps 2% in the next few years....5%?, not in our lifetime unless some major black swan event occurs.  We can't afford that rate on our debt.

6
Comment #6 by Anonymous posted on
Anonymous
Ken, I found a decent CD rate.  First Flight Federal Credit Union.  15 Month CD, 1.25%.  It was very easy to join, just fill out the online membership and in 15 minutes, I had a member number and could see my account online.

2
Comment #7 by KenBDG posted on
KenBDG
@Anonymous #6, Thanks for the info on First Flight!

1
Comment #8 by Aaron (anonymous) posted on
Aaron
Frontier Bank 3.05% (up to $20K) 0.25% ($20K ) Kasasa Cash

1