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Best Bank Account Interest Rates - Summary for Week Ending May 11, 2014

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Best Bank Account Interest Rates - Summary for Week Ending May 11, 2014

Will we finally see higher interest rates in 2015? Two possible scenarios were apparent from Fed Chair Janet Yellen’s testimony before Congress last week. In the best case scenario, the economy will have solid growth this year and that will allow the Fed to raise interest rates sometime in 2015. As reported in the Wall Street Journal, Fed Chair Yellen did say that the economy was on track for "solid growth" in the current quarter. However, she did warn that there’s a housing market slowdown that isn’t showing signs of a turnaround. The Fed will be under pressure to keep rates low to support housing, and that could delay rate hikes.

I’m afraid it’s quite possible that the Fed will delay the first rate hike past 2015, and remember, that’s only the first rate hike. It could take a couple of more years before the Fed funds rate returns to a more normal level, and that could be delayed if there’s another recession.

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

Treasury Yields:

  • 1-month: 0.02% up from 0.01% last week
  • 6-month: 0.05% same as last week
  • 2--year: 0.40% down from 0.42% last week
  • 5--year: 1.63% down from 1.67% last week
  • 10-year: 2.62% up from 2.60% last week
  • 30-year: 3.47% up from 3.37% last week

Fed funds futures' probability of rate hike by:

  • Jan 2015: 15% same as last week
  • Apr 2015: 35% down from 38% last week
  • Jul 2015: 68% down from 69% last week
  • Oct 2015: 90% down from 92% last week

Savings & Checking Account Rates

Last week was another quiet week in the savings and money market accounts that I track below. Only one bank had a rate change. First Trade Union Bank cut its FT High-Yield Savings account rate from 0.95% to 0.85%. First Trade Union Bank had raised this rate to 1% last December, but it didn’t last long. In March the rate fell to 0.95%, and now it’s 0.85%. Before December the rate had been 0.70%, and that had lasted since 2012. So I wouldn’t be surprised if we see more rate cuts in the next few months.

The rate cut at First Trade Union Bank shows us that we have to be skeptical when small banks offer a top internet savings account rate. History shows that most of these banks won’t remain a rate leader over the long run. One of the few exceptions so far has been Incredible Bank which is a division of River Valley Bank, a Wisconsin community bank with just over $1 billion in assets. Incredible Bank’s money market account has remained near the top since the bank launched the account in 2011.

The number of institutions offering a non-promo 1% savings or money market account continues to be five. Note, I exclude EverBank and Salem Five Direct. Only new customers can earn over 1% at these banks.

Out of these five, the accounts at Connexus Credit Union and SmartyPig have the longest history of top rates.

Reward Checking Accounts

Last week was also a quiet week for the nationally available reward checking accounts. There were no rate or balance cap changes.

There continues to be six banks and credit unions in my table below offering reward checking yields of 2.00% or above for balances of at least $15,000. Please note that one of these institutions, INOVA Federal Credit Union, will be adding requirements to its reward checking account in July that will make it harder to qualify for the high rate.

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:

  • none

Rate/Balance Cap Cuts:

  • First Trade Union Bank savings - 0.85% [was 0.95%]

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 Last Week's Posts

Banking News/Resources Savings/MMA - National
  • Nothing new this week
CD Deals/Resources - National Checking/Savings/CC Bonuses 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 May 13, 2014

Checking/Savings/Money Market Accounts:

  • Noteworthy Accounts Available Nationwide:
InstitutionRatesNotes
Connexus Credit Union1.15% ($100K) 1.00% ($50K) 0.75% ($20K)MMA - active chk required
EverBank1.10% (6mo intro rate) 0.61% ongoing rateMMA/Checking - account review
SFGI Direct1.01%savings account, account review
MySavingsDirect1.00%savings account - account review
iGObanking.com1.00% ($100K) 0.75% ($75K) 0.50% ($25K)savings account (no check writing) account review
SmartyPig1.00%savings account - account review
Salem Five Direct1.00%savings, for new customers only
GE Capital Retail Bank (formerly MetLife)0.95%Savings
Incredible Bank0.95% ($2.5K min)MMA account review
CIT Bank0.95% ($25K) 0.90% ($100)savings account, account review
Bank5 Connect0.90% (min $100)online savings account (not available for MA and RI residents)
GE Capital Bank0.90%online savings account
Sallie Mae Bank0.90%MMA account review
Barclays0.90%Savings account review
Redneck Bank0.90% (up to $35K) 0.50% (over $35K)MMA
AmericaNet Bank0.90% (up to $35K) 0.50% (over $35K)MMA
Evantage Bank0.90% (up to $35K) 0.50% (over $35K)MMA
Palladian Private Bank0.90% (min $10K)savings account
Ally Bank0.87%savings
First Trade Union Bank0.85% ($2.5K)FT High-Yield Savings, account review
Union Federal Savings Bank0.85% (min $2.5K)MMA account review
Ally Bank0.85%MMA
Discover Bank0.85% (min $500)savings account, account review
Colorado Federal Savings Bank0.85% ($2.5K min)savings account, account review
FNBO Direct0.85%savings account
GE Capital Retail Bank (formerly MetLife)0.85% ($10K)MMA
Mutual of Omaha Bank0.85% (min $25)MMA, account review
Capital One 3600.80% ($100K) 0.75% ($50K)360 Checking
American Express Bank0.80%savings account, account review
Sallie Mae Bank0.80%savings account, account review
MyBankingDirect0.80% (min $5K)MMA
ableBanking0.80% (min $1K)MMA
Bank5 Connect0.76% (min $100)checking account (not available for MA and RI residents)
Bank of Internet USA0.75%MMA
Capital One 3600.75%360 savings account
Clear Sky Accounts0.70% (max $250K)savings account, account review
Alliant Credit Union0.70% (min $100)savings account, account review
Nationwide Bank0.66% (min $1K)MMA
Incredible Bank0.66% ($1K min)checking, account review
Alliant Credit Union0.65%Checking (req's elec. dep & e-stmts) account review

Reward Checking Accounts:

  • Noteworthy Accounts Available Nationwide:
InstitutionRatesNotes
Consumers Credit Union4.09% (up to $10K) 0.20% ($10K-$25K) 0.10% ($25K+)Rewards Checking - with cc requirements
INOVA Federal Credit Union3.00% (up to $20K) 0.15% ($20K+)Ovation Checking (not available to PA residents)
Lake Michigan Credit Union3.00% (up to $15K) 0.00% ($15K+)Max Checking
Great Lakes Credit Union3.00% (up to $10K) 0.05% ($10K+)Ultimate Checking
Belvoir FCU2.53% (up to $15K) 0.05% ($15K+)CUXcel Checking
Lee Bank2.50% (up to $15K) 0.50% ($15K+)Kasasa Cash
Capital Educators Federal Credit Union2.50% (up to $10K) 0.20% ($10K+)High Yield Checking
Flanagan State Bank2.25% (up to $10K) 0.25% ($10K+)Kasasa Cash
Security Bank2.05% (up to $15K) 1.00% ($15K-$25K) 0.30% ($25K+)Security Bonus Checking
XCEL Federal Credit Union2.01% (up to $15K) 0.30% ($15K+)Kasasa Cash Checking
ABCO Federal Credit Union1.76% (up to $25K) 0.20% ($25K+)Premiere Checking
Provident Credit Union1.76% (up to $25K) 0.11% ($25K+)Super Reward Checking
Connexus Credit Union1.75% (up to $25K) 0.25% ($25K+)Xtraordinary Checking
First Tech Federal Credit Union1.58% (up to $10K) 0.16% ($10K+)Dividend Rewards Checking
Aspire Federal Credit Union1.51% (up to $10K) 0.25% ($10K+)Kasasa Cash
First American Bank1.50% (up to $15K) 0.15% ($15K+)Everyday Rewards Checking
Community Bank of Raymore1.50% (up to $10K) 0.10% ($10K+)Rewards Checking
Community Bank of Pleasant Hill1.50% (up to $10K) 0.10% ($10K+)Rewards Checking
Redneck Bank1.50% (up to $10K) 0.50% (over $10K+)Redneck Rewards Checking
AmericaNet Bank1.50% (up to $10K) 0.50% ($10K+)AmericaNet Rewards Checking
Evantage Bank1.50% (up to $10K) 0.50% ($10K+)Evantage Rewards Checking
West Texas National Bank1.26% (up to $25K) 0.25% ($25K+)Ultimate Checking
Heritage Bank1.26% (up to $25K) 0.10% ($25K+)eCentive Account
Bank of Blue Valley1.25% (up to $15K) 0.10% ($15K+)$1K/month debit card req (account review)
Bank of Internet USA1.25% (up to $150K) 0.00% ($150K+)Rewards Checking
BankFirst Financial Services1.25% (up to $25K) 0.15% ($25K+)Kasasa Cash
Avidia Bank1.06% (up to $25K) 0.05% ($25K+)eChecking
Legence Bank1.05% (up to $25K) 0.25% ($25K+)Kasasa Cash
North Country Savings Bank1.05% (up to $25K) 0.75% ($25K+)Advantage Checking
First New England Federal Credit Union1.01% (up to $15K) 0.10% ($15K+)extra 1% w/relationship
State Bank of Toledo1.00% (up to $25K) 0.15% ($25K+)Hometown Rewards Checking

Certificates of Deposit:

Various Deposit Account Deals

Bank Account Alternatives - NOT FDIC Insured

InstitutionRatesNotes
Ally Financial Demand Notes1.25% rate for $50k+Ally Demand Notes review
Duke Energy PremierNotes1.25% rate for $50K+Duke Energy PremierNotes review
Ford Interest Advantage1.10% rate for $50k+Ford Interest Advantage review
GE Interest Plus1.05% rate for $50k+
Vanguard Prime Money Market Fund0.01% 7-day yield
Vanguard Tax-Exempt Money Market Fund0.01% 7-day yield
Fidelity Money Market Fund0.01% 7-day yieldreviews on Fatwallet
Fidelity Municipal Money Market Fund0.01% 7-day yield
TIAA-CREF Money Market Fund0.00% 7-day yield

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



Related Posts

Comments
17 Comments.


Comment #4 by James Barnes posted on
James Barnes
There is no reason for rates not to be raised now.

2
Comment #5 by Anonymous posted on
Anonymous
Ken, question about INOVA rewards checking requirement changes ( haven't personally received any Email from them about July 1 changes)  Do you or others know of any way to meet the new requirements using Serve, BlueBird, or other means that will be considered a credit purchase. Thanks.

1
Comment #6 by Anonymous posted on
Anonymous
Have you noticed a pattern of how Yellen makes all those connections as conditions to rate raise. In Jan. she said to many people are unemployed, next she said the economy is still not growing fast enough and now she is including the housing into that mangled conditions.
I bet you, next time she will include the deficit or the dollar or the global conditions or....I believe you are getting the picture of the intend, not to raise the interest rates any time soon.
In my estimate, it may be 10 more years from today.

7
Comment #7 by Anonymous posted on
Anonymous
She is doing nothing other than making excuses for not raising interest rates.

7
Comment #9 by Anonymous posted on
Anonymous
What do you think higher interest rates will accomplish?

4
Comment #11 by Anonymous posted on
Anonymous
More money in the pockets of the people who have save a lifetime for retirement.  These retirees, are typically not in debt and tend to SPEND when they have income that exceed their living needs.  They love buying for the grandkids, taking vacations, tours and enjoying life.  This has been reduced drastically.  Remember it will help the ecomomy.

9
Comment #12 by Anonymous posted on
Anonymous
Higher interest rates would greatly improve the economy.

4
Comment #13 by Anonymous posted on
Anonymous
Higher rates increase the cost of mortgages, consumer loans, business loans, etc. thus slowing economic recovery. For better or worse, Yellen knows the economy is not in a robust recovery and there's simply no need to raise the Fed funds rate. Bond purchases will continue to decline unless the Fed wants an untenable balance sheet, which they don't. Higher rates will arrive when economic activity warrants it, not before and certainly not because savers clamor for it. Besides, by their nature savers save, not spend and it's consumer spending that drives our modern economy. Offer me a car at 0% for 60 months and I might just be interested!

5
Comment #10 by Anonymous posted on
Anonymous
In terms of market rates, the Fed doesn’t actually claim to set rates.  It only sets a target range for its main policy instrument, the Federal Funds Rate. Based on this target, the Fed then buys and sells securities to impact the supply and demand of bank reserves, ultimately moving the fed funds rate toward its target. Under Yellen's chairmanship the Fed has no intention of selling the securities purchased under QE. They would lose a ton of money.

2
Comment #8 by Anonymous posted on
Anonymous
The Bundesbank is hinting at new stimulus to combat low inflation. The remedies could include purchasing government bonds, low cost loans to banks and...negative interest rates. There's an article about this in today's NY Times. Sound familiar?

4
Comment #14 by Anonymous posted on
Anonymous
Raising interest rates would actually help the economy.

1
Comment #15 by Anonymous posted on
Anonymous
I'm a numbers guy so I'll ask you for a few concrete examples.

4
Comment #16 by Anonymous posted on
Anonymous
Generally and as a policy matter, the public does not buy "big ticket" items unless they sense the prices are going up...thus, higher interest rates are (in part) a result of higher inflation and thus people are inclined not to stay on the sidelines as they, in general, would if prices are stagnant or in a depression environment.  The "best" example is Japan in recent years. 

3
Comment #18 by Anonymous posted on
Anonymous
Exactly.  In addition, higher interest rates encourage savings and it is only savings that foster growth.  Consumer spending actually destroys the economy eventually.  High interest rates leads to savings, which leads to capital formation which leads to a strong economy.  Low interest rates destroy the economy in the long run. 

1
Comment #19 by Anonymous posted on
Anonymous
Does this make it clear how raising interest rates would help the economy?

1
Comment #20 by Anonymous posted on
Anonymous
Low interest rates are what has killed the Japanese economy.

1
Comment #17 by Anonymous posted on
Anonymous
What about the HighQ Savings account at Quorum Federal Credit Union? It is currently paying 1.05% with no minimum balance and no monthly fees (with electronic statements). I became a member online for there 1.25% 13 month CD (so I think this is open to nonlocals) and now see what looks like a good  deal. Anyone see any problems with this?

3