Dedicated to Deposits: Deals, Data, and Discussion

Best Bank Account Interest Rates - Summary for Week Ending June 8, 2014

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If we’re going to see higher interest rates in 2015, we’ll need to see a solid trend of employment improvements. That solid trend is forming. The Department of Labor released the May jobs report on Friday, and the numbers slightly exceeded economists’ expectations. According to this Business Spectator article:

This was the first time in 14 years that non-farm payrolls rose by 200,000 in four consecutive months and it was the strongest four-month gain since April 2012. To put this in perspective there have been just three four-month periods with this level of job creation in the past eight years.

The unemployment rate remained unchanged at 6.3%. Economists were expecting it to rise to 6.4%. It’s important to note that the participation rate remains low, and much of this low participation rate is the result of people who have given up looking for jobs.

So we’ll need to see continued employment improvements before the Fed starts to consider raising interest rates. As mentioned by the Business Spectator, that’s not the only thing we’ll need to see:

The Federal Reserve is expected to cut its asset purchases by a further $US10 billion when it meets on June 17, but a normalisation of interest rates remains some way off. The Fed’s preferred measure of inflation, the core personal consumption expenditure (PCE) deflator, remains well below its upper target for annual inflation of 2 per cent and until that begins to change the Fed is unlikely to make a move.

So we’ll also need to see higher inflation. Hopefully, inflation won’t get too high before the Fed acts. As we all know, the real inflation that savers see is always higher than the inflation numbers that the Fed looks at.

The recent positive economic news did help Treasury yields and the Fed funds futures to rise some over the last week. The change in these over 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% down from 0.05% last week
  • 6-month: 0.06% same as last week
  • 2--year: 0.41% up from 0.37% last week
  • 5--year: 1.66% up from 1.54% last week
  • 10-year: 2.60% up from 2.48% last week
  • 30-year: 3.44% up from 3.33% last week

Fed funds futures' probability of rate hike by:

  • Jan 2015: 13% up from 11% last week
  • Apr 2015: 31% up from 27% last week
  • Jul 2015: 63% up from 58% last week
  • Oct 2015: 86% up from 82% last week

Savings & Checking Account Rates

Last week was another quiet week in the savings and money market accounts that I track below. The only change was an increase in EverBank’s promo rate. That went up from 1.10% to 1.40%. This applies to the first six months of account opening for either the Yield Pledge Checking or Yield Pledge Money Market. The ongoing rates remain the same. This is a good short-term deal, but it’s important to remember that this promo rate applies up to $50K for the money market account and up to $100K for the checking account. Customers must be first-time holders of these accounts to qualify. After the first 6 months, the rate will fall to the ongoing standard rates.

The number of institutions offering a non-promo 1% savings or money market account remains at five. Out of these five, the accounts at Connexus Credit Union and SmartyPig have the longest history of top rates. 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 reward checking, please refer to my blog post, 10 Common Traits of High-Yield Reward Checking.

Certificate of Deposit Rates

I’ve gone back to publishing my CD survey as a separate post. Please refer to my survey of the best CD rates. This recap will focus on banking news of the week and liquid accounts.

Best Nationally Available MM, Savings and Checking Accounts

Rate Hikes:

  • EverBank MMA/Checking 6mo promo rate - 1.40% [was 1.10%]

Rate/Balance Cap Cuts:

  • none

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 9, 2014

Checking/Savings/Money Market Accounts:

  • Noteworthy Accounts Available Nationwide:
InstitutionRatesNotes
EverBank1.40% (6mo intro rate) 0.61% ongoing rateMMA/Checking - account review
Connexus Credit Union1.15% ($100K) 1.00% ($50K) 0.75% ($20K)MMA - active chk required
Quorum Federal Credit Union1.05%HighQ Savings Account
SFGI Direct1.01%savings account, account review
MySavingsDirect1.00%savings account - account review
iGObanking.com0.90% ($100K) 0.90% ($75K) 0.90% ($25K)New accounts and new money only, account review
SmartyPig1.00%savings account - account review
Salem Five Direct1.00%savings, for new customers only
Synchrony Bank (formerly GE Capital Retail Bk)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
Synchrony Bank (formerly GE Capital Retail Bk)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
FNBO Direct0.65%checking account
Alliant Credit Union0.65%Checking (req's elec. dep & e-stmts) account review
Incredible Bank0.59% ($1K min)checking, 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:

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
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)



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Comments
3 Comments.
Comment #1 by Anonymous posted on
Anonymous
Nice to see some positive movement toward a rate increase in a week in which the ECB made the move toward negative interest rates.  

Having said that, do we really believe there is a 63% chance of a rate hike within the next year (by July 2015), as projected by the CME Group FEDWatch you cited!?  If anyone wants to take the 'under' on that timeframe (since there is a supposedly much greater than 50% of it happening by then), I would imagine the 'over' bettors would be lining up pretty quickly to make that bet.  

1
Comment #2 by ae (anonymous) posted on
ae
Minor change to a rewards checking account - It is official via email that GLCU as of July 1st 2014: Will only allow one account per SSN that can earn interest.

As I understand it, each SSN can still have up to three accounts however - only 1 will earn interest.

1
Comment #3 by CapitalClimate posted on
CapitalClimate
TIAADirect has apparently finally started accepting new accounts again.  Savings rate is up to 0.80% for balances over 10K.

4