Bank Deals Blog - February 2010

There's new tax legislation in Congress that is designed to simplify the income tax code, but unfortunately it has a provision that could be yet another blow to the US Savings Bond program. The provision will repeal the deferral of interest on savings bonds. Currently, you don't have to pay federal income tax on Savings Bond interest until you redeem the bond (see Treasury Direct for full details).

Details of this bill are available at Senator Wyden's website, and the provision to repeal the deferral of Savings Bond interest is listed in the offset handout.

Here's a summary of the legislation as described at Senator Wyden's website:

As Congress readies for the inevitable partisan debate over how best to address the expiring 2001 and 2003 tax cuts, U.S. Senators Ron Wyden (D-Ore.) and Judd Gregg (R-NH) today offered a bipartisan solution. The "Bipartisan Tax Fairness and Simplification Act of 2010" takes a comprehensive approach to reforming the tangled web of nearly 10,000 exemptions, deductions, credits and other preferences that currently clutter the U.S. tax code in order to create a simpler and fairer system that American workers and businesses can more easily navigate. By eliminating many of the tax expenditures that benefit narrow special interests, Wyden-Gregg offers fiscally-responsible tax-relief to the middle class and growth opportunities for American businesses to create jobs and compete globally.

In fairness, the bill has some provisions that may help savers. In the two page summary, one of the claimed tax-code enhancements is the restructuring of retirement accounts:

Promotes Personal Savings And Investment – Wyden-Gregg promotes responsible retirement savings and investments by expanding tax-free savings opportunities. The bill consolidates the three existing types of IRAs into a new Retirement Savings Account and a new Lifetime Savings Account so that a married couple will be able to contribute up to $14,000 per year to tax-favored retirement and savings accounts.

I don't know how much support this legislation will receive. You can read more about it at the NY Times and in the Atlanta Journal-Constitution.

The Treasury has already hurt the savings bonds program in the last few years by slashing the annual purchase limits and by setting the I Bond fixed rates at very low levels. Do we need yet another blow to the program?

There's an interesting article at Forbes that looks into the question of why did the Treasury sharply limit I Bond purchases. One possibility that wasn't discussed was the influence from the banking industry. I wonder if that influence was the source of this savings bond provision in this new legislation.

Credit for this find goes to the Savings Bonds Advisor Blog.

Citizens Bank has a checking account promotion in which you can earn $100. The details of the checking account bonus are listed at www.citizensbank.com/220. Offer ends 3/26/2010. The requirements to earn the $100 include:

• $50 for setting up direct deposit of $250 or more
• $25 for making 5 online bill payments
• $25 for making 5 signature-based debit card or credit card purchases

Some important details mentioned in the small print includes:

Requirements must be met by 4/30/2010. Bonus will be deposited into the checking account by 6/30/2010 and reported to the IRS. Checking account must remain open for at least 6 months or the amount of the banking bonus will be debited from the account at closing.

The Green Checking qualifies for this bonus, and it's a free checking account with no monthly fees. Minimum opening balance is $50.

The Green Checking also qualifies for the Green$sense program. Citizens Bank says you can get paid up to $120 per year in Green$ense. However, this would require 100 debit card purchases, online bill payments or automatic payments per month for 12 months. For each of these non-paper transactions, Citizens Bank pays you 10 cents. Since this is considerable work, I'm not including this $120 in the bonus amount.

This is very similar to the promotion the bank was running late last year. One small change is that they now require a minimum direct deposit of $250 instead of $50. In that post, a reader mentioned that there's a hard pull in the application.

There's an online application at the promotions page. However, it only accepts zip codes in their market area. Their market area includes Connecticut, Delaware, Illinois, Indiana, Kentucky, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island and Vermont.

Citizens Bank operates under two FDIC charters: Citizens Bank of Pennsylvania (FDIC Certificate # 57282) and RBS Citizens, N.A. which has branches in several states outside of PA and NJ (FDIC Certificate # 57957).

Other Bank Bonuses

To find other bonus deals, please refer to my bank bonus page which has all of my recent bank bonus posts.

Pioneer Bank in Dripping Springs Texas is offering a high-yield reward checking account called Pioneer High Yield Checking. The account has the following rates and features as of 2/28/2010 if certain monthly requirements:

• 3.51% APY for balances up to $25,000
• 1.25% APY for portion of balance over $25,000
• 0.05% base rate if requirements are not met
• Refunds of ATM fees

Monthly requirements include:

• 10 check card purchases
• 1 direct deposit or automatic withdrawal
• Receive e-statements

Other features of this account include:

• $100 minimum initial deposit
• No monthly fees
• No minimum balance requirement

There's an online application at the bank's micro-website. However, it implies that you must come in to a branch location to complete the application process.

It's a small bank with one office located in Dripping Springs, Texas which is just south of Austin.

The bank's ratings for safety and soundness are strong: 4 stars (excellent) at BauerFinancial and 4 stars (sound) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 2007 (FDIC Certificate # 58577).

Other Reward Checking Accounts

There are still nationwide reward checking accounts paying 4% (see post) and a few local accounts paying over 5% (see post). However, rates under 4% are becoming more common, and anything at 3% or above is a decent deal for reward checking rates.

To find nationwide reward checking accounts and reward checking accounts in your local area, please refer to the reward checking section of DepositAccounts.com.

The Bank of Princeton is offering a special CD with a 3.35% APY for terms of 4 and 5 years. This special is listed in the bank's promotions page as of 2/28/2010. There are no details listed.

It appears a branch visit is required to open an account. Branches are located in the New Jersey cities of Princeton, Hamilton and Pennington.

The bank's ratings for safety and soundness are mixed: 4 stars (excellent) at BauerFinancial and 2 stars (below peer group) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 2007 (FDIC Certificate # 58513).

Thanks to the reader who emailed me news of this CD special.

Stillwater National Bank is advertising a competitive CD rate of 2.00% APY for a 18-month term. Minimum deposit is $5,000. This special doesn't seem to be listed at the bank's website. It was advertised in today's (2/28/2010) Oklahoma City newspaper. The ad is available online here.

Three weeks ago the bank was offering 2% on a 15-month CD special, and in December it was a 2% 11-month CD. As you can see, a 2% APY is getting harder to find for shorter terms.

It appears a branch visit is required. The ad lists branches in Oklahoma City and Edmond. The bank has many other branches in Kansas and Texas, but these special CDs may be specific to the Oklahoma branches.

The bank's ratings for safety and soundness continue to be fair: 3 stars (performing) at Bankrate.com and 3½ stars (good) at BauerFinancial. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 1934 (FDIC Certificate # 4201).

Hot Deals, Quick Link for Rates, Recap of this week's posts

I'm afraid there's still no sign of higher interest rates in the near term. Bernanke gave his semiannual testimony to Congress this week. According to the Washington Post:

Federal Reserve Chairman Ben Bernanke told Congress on Wednesday that record-low interest rates are still needed to ensure that the economic recovery will last and to help cushion the sting of high unemployment.

Thomas Hoenig, the FOMC member most concerned with inflation, warned of a new possibility which could cause the Fed to keep rates low for a longer time. This WSJ article has an overview of Hoenig's interview:

Federal Reserve Bank of Kansas City President Thomas Hoenig reiterated his call for interest rates to go back to normal levels sooner rather than later, but warned that the U.S. government's budget deficit puts pressure on the Fed to keep rates low.

It seems likely that all the government spending will soon lead to high inflation and much higher interest rates, but it may not work out that way. Sol at BestCashCow described how the US could experience a long period of low rates just like Japan experienced in the last two decades.

Two bank failed on Friday which brings the year's total number of bank failures to 22. In addition to bank failures this week, there were two credit union failures. Both credit unions were tiny. This brings the year's total of credit union failures to 3.

The FDIC released its fourth quarter 2009 report on the banking industry. The number of banks on the problem list went up from 552 to 702. The FDIC keeps this list secret, but Calculated Risk Blog has an unofficial list of problem banks based on public enforcement actions. The number of banks on this list is 644.

Savings Account Rates

This was another week of rate cuts at several banks. Some of the better known internet banks to cut rates include UFB Direct, Nationwide and HSBC Advance. One of the past rate leaders, SFGI Direct, cut its savings account rate from 1.85% to 1.75% APY. SFGI Direct savings account continues to be closed to new customers.

This week I did another review of four top savings accounts that I've been tracking for the last year. In terms of rates, 3 of the 4 are no longer on the top of the list. However, one is still on top. It's Alliant Credit Union's savings account which is still at 2.00% APY, and reports are that it'll continue through March.

Rate Hikes:

1. None

Rate Cuts:

1. SFGI Direct Savings - 1.75% (was 1.85%)
2. Connexus CU MMA - 1.75% $100K (was 2.00%)
3. UFB Direct Savings - 1.45% (was 1.50%)
4. Wings Financial CU MMA - 1.41% $5K (was 1.56%)
5. Nationwide Bank - 1.40% (was 1.45%)
6. Zions Bank MMA - 1.16% (was 1.25%)
7. Univest Direct Savings - 1.15% (was 1.25%)
8. HSBC Advance Savings - 1.10% (was 1.20%)
9. E-LOAN Savings Plus - 1.05% $10K (was 1.10%)

Certificate of Deposit Rates

The best deal for a short-term CD used to be at Danversbank which had been offering a 1.75% APY 4-month CD. The rate fell to only 1.25% APY this week, and unfortunately, this is still very competitive for short-term CDs.

Northrop Grumman FCU leads the 6-month CD list with a 1.63% APY. The credit union also has some very good CD rates for longer terms but it's restricting these specials to existing members (see post).

For long-term CDs, there were a few banks that increased rates. The largest rate hike came from BankUnited which is offering a 3.25% APY 4-year CD and a 3.50% APY 5-year CD (see review).

With the new month starting on Monday, it's important to note that we may see many credit unions, such as PenFed, cutting rates.

Below are some of the best nationwide and local CD deals that are still active.

Best Nationwide CD Deals as of 2/27/10: Also listed are savings account promos with rate guarantee periods. The full list of nationwide CD rates is farther down.

1. 2.25% 3-mo money market/checking promo at EverBank (account review)
2. 1.77% 10-mo CD at EBSB Direct (account review)
3. 2.10% 12-mo CD at Alliant CU (account review)
4. 2.00% 14-mo CD at Digital CU (account review)
5. 2.00% 15-mo CD at Country Bank for Savings (account review)
6. 2.30% 21-mo CD at Stonebridge Bank (account review)
7. 2.02% 24-mo Add-On CD at Northwest FCU (account review)
8. 3.00% 36-mo CD at Pentagon FCU (may change in March) account review)
9. 3.25% 48-mo CD at BankUnited (account review)
10. 3.15% 48-mo CD at Hudson City Savings Bank (account review)
11. 3.65% 60-mo CD at Melrose CU (account review)
12. 3.60% 60-mo CD at Apple FCU (account review)
13. 3.50% 60-mo CD at BankUnited (account review)
14. 3.40% 60-mo CD at Hudson City Savings Bank (account review)
15. 3.15% 60-mo Small-Penalty CD at Ally Bank (account review)
16. 4.25% IRA-only 84-mo CD at Navy FCU - Limited Membership (account review)
17. 4.06% 84-mo CD (min $175K) at USAA Bank (account review)

Best Local CD Deals as of 2/27/10: Some of the best CD deals are from banks and credit unions that don't offer accounts nationwide. Refer to the recap section and the state index section to find all the recent local deals. Here are some of the best deals to note.

1. 2.30% Money Market Account (min $100K) at Georgia Primary Bank in Atlanta (account review)
2. 2.02% Money Market Account at South Florida FCU (account review)
3. 2.29% 6-mo CD at American Pride Bank in GA (account review)
4. 2.00% 6-mo CD at Vision Bank in Dallas (account review)
5. 2.25% 12-mo CD at Workmen's Circle CU in Georgia (account review)
6. 2.22% 12-mo CD at Cornerstone Bank & Trust in IL (account review)
7. 2.06% 12-mo CD w/chk at Chartway FCU in VA, GA, RI, NC, TX, FL & NJ (account review)
8. 2.00% 12-mo CD at Premier American Bank, NA in Miami, FL (account review)
9. 2.01% 15-mo CD at Aspire FCU in NY, NJ, NH & VA (account review)
10. 2.18% 18-mo CD w/chk at Greater Western Bank in AZ, CO, KS, NE, SD, IA & MO (account review)
11. 2.20% 18-mo CD & 3.20% 44-mo CD at Crescent Bank & Trust in Louisiana (account review)
12. 3.00% 26-mo/49-mo CD Combo at SunTrust Bank in Several States (account review)
13. 3.35% 48-mo CD at Fidelity Bank of FL (account review)
14. 4.00% 60-mo CD at PFFCU in Philadelphia (account review)
15. 3.56% 72-mo CD at Broadway Federal Bank in Los Angeles (account review)
16. 4.25% 10-year Flex-CD at First Choice CU in Florida (account review)

Reward Checking Accounts

I reported on three new reward checking accounts this week with yields from 3% to 3.50% APY. Last Monday I reviewed my old reward checking posts and identified five reward checking accounts that are still paying at least 5% APY after more than a year. Unfortunately, these all are local deals. The best nationwide reward checking account yields top out at around 4% APY.

The best reward checking accounts are offered by small banks and credit unions. There are a few sizable banks offering reward checking, but as I showed today, rates tend to be lower.

To see all of the high yield reward checking accounts available throughout the nation, please refer to the reward checking section of DepositAccounts.com.

Don't Forget to Check the Notices Section

As I mentioned before, lots of my posts are now in the Notices Section. Notices are very short posts that are intended to alert you to rate changes or point you to some interesting banking news or deals on the web. This allows me to post more often on news and deals. I'll continue the blog posts in the same format that you're used to. You can get to the Notices Section from the top menu. You can also see the recent Notices on the front page. Just select the Notices tab which is next to the Blog Posts tab. If you want to subscribe to both blog posts and Notices, just click on the RSS icon at the top of either the Blog or Notices section.

Recap for the Week - Links to This Week's Posts

Banking News

• Two Banks and One Credit Union Were Closed Today
• FDIC's Fourth Quarter 2009 Report - Number of Problem Banks Increased to 702
• My Experiences with Mint.com for Bank Account Tracking

CD Deals - National

• Top CD Rates (with Some Limitations) at Northrop Grumman FCU - Easy Membership
• 3.25% 4-Year CD at BankUnited in Florida - Available Nationwide

Savings/Checking Accounts - Nationwide

• The Best Savings Account with a History of Top Rates
• Update on ETrade Bank and the Transfer of Customers' Savings Accounts

Checking/Savings Bonuses

• Checking Account Bonus of up to $100 at Webster Bank in NY, MA, RI and CT - Local Only

Reward Checking Accounts

• Review of the Largest Banks Offering Reward Checking Accounts
• High-Yield Reward Checking and Savings Accounts at CommerceWest Bank in California - Local Only
• Reward Checking and Savings Account at Murphy-Wall State Bank and Trust in Illinois - IL Only
• Reward Checking Accounts with a History of Rates over 5.00%
• 3.01% Reward Checking and a $100 Bonus at Home Federal Bank in ID & OR - Local Only

CD and Money Market Deals - Local

• 2.50% 12-Month Jumbo CD at Sharonview FCU in NJ, SC & NC - Limited Membership
• 2.00% 15-Month CD at Southbridge Savings Bank in MA - Local Only
• 3.25% 4-Year CD at Bogota Savings Bank in New Jersey - Local Only
• 2.00% 13-Month CD Special at CheckSpring Bank in NYC - Local Only
• 2.32% 24-Month CD at American Bank of Commerce in TX & CO - Local Only
• CD Special, Checking Bonus & Financial Review of AnchorBank in WI - Local Only
• 2.29% 6-Month CD at American Pride Bank in Georgia - Local Only
• 2.35% 24-Month CD at Broward Bank of Commerce in FL - Local Only
• 2.30% 18-Month CD at 1st Mariner Bank in Maryland
• 2.05% 30-Month No-Penalty CD at Superior Bank in St. Louis - Local Only
• 2.02% 12-Month CD & 2.53% 24-Month CD at Park Cities Bank in Dallas/Fort Worth - Local Only
• CD Specials and News of Name Change at Flushing Bank in New York - Local Only

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. The top lists include banks and credit unions with broad availability and with minimums under $100,000. Previous weekly summaries are available at this page. Quick Links: Refer to the following links for the savings accounts and CDs that interest you: Liquid Account Rates: Savings Accounts, Reward Checking, Bank alternatives CD Rates: 3 Mo CDs, 6 Mo CDs, 9 Mo CDs, 12 Mo CDs, 18 Mo CDs, 24 Mo CDs, 36 Mo CDs, 48 Mo CDs, 60 Mo CDs, 84 Mo CDs, CDs by state Comments: read and discuss

As of February 27, 2010

Checking/Savings/Money Market Accounts:

• Best Reward Checking Account Rates (Nationwide & by State)
• Best Savings Account Rates (Nationwide & by State)
• Best Money Market Rates (Nationwide & by State)
• Best Checking Account Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• EverBank - 2.25% ($5K min), 3 mo promo rate up to $50K (1.26% stnd) account review
• SmartyPig - 2.01% (min $25) withdrawal restrictions, account review
• Ready Saver - 2.00% (NC state excluded) account review
• Redneck/AmericaNet/Evantage Bank - 2.00% (up to $35K, 1% over) account review
• Alliant Credit Union - 2.00% (min $100), account review
• Alliant Credit Union - 1.75% Checking, required direct deposit, account review
• SFGI Direct - 1.75% ($25 min), NOT accepting new customers, account review
• Incredible Bank - 1.74% Checking ($1K min) account review
• Palladian PrivateBank - 1.70% (min $10K) account review
• EBSB Direct - 1.67% (min $50K) account review
• Peoples Bank - 1.60% ($10K min) account review
• Newtown Savings Bank - 1.60%, account review
• Clear Sky Accounts - 1.55% account review
• Capital One/Costco - 1.50% InterestPlus Savings ($5K min) quarterly bonuses for $15K+, account review
• First Trade Union Bank - 1.50% ($2.5K min) account review
• ProvidentNJ Direct - 1.50% (min $10K) account review
• Danversbank - 1.50% account review
• American Express Bank - 1.50%, account review
• Bank of Internet - 1.50% (min $100) account review
• Savings Square - 1.45%, account review
• Capital One - 1.45% InterestPlus Savings ($2.5K min) quarterly bonuses for $15K+, account review
• Bank of Internet - 1.45% MMA (min $100) account review
• UFB Direct - 1.45%, account review
• Wings Financial CU - 1.41% MMA ($5K min) Limited Membership, account review
• Colorado Federal Savings Bank - 1.40% ($2.5K min) account review
• Grand Yield Direct - 1.40% (min $2.5K) account review
• Hudson City - 1.40% (min $2.5K) account review
• Delta Community CU - 1.40% MMA (min $25K) 1.65% $100K+, account review
• ADB Bank - 1.40% account review
• Bank of Internet - 1.40% Advantage Savings (min $100) account review
• DollarSavingsDirect - 1.40% ($1K min) account review
• Nationwide Bank - 1.40% MMA (min $1K) account review
• Ally Bank - 1.39% Savings account review
• Ally Bank - 1.39% MMA account review
• CNB Bank Direct - 1.35% account review
• Discover Bank - 1.35% Savings (min $500) account review
• CapitalOne/Costco - 1.35% MMA (min $1K, Costco members only, $60 deal for exec. members)
• iGObanking - 1.31%, account review
• Bank of American Fork - 1.30% (min $1K) account review
• WTDirect - 1.26% ($10K min), account review
• AIG Bank - 1.26% MMA (min $10K) account review
• Choice Financial - 1.26% (min $5K), (1.51% $25K+, 1.61% $100K) account review
• FNBO Direct - 1.25%, account review
• 1st Constitution Direct - 1.25% (min $100), 3 mo promo (1.25% $10K+ stnd) account review
• FNCB Bank - 1.25% (min $100) account review
• Presidential Bank - 1.25% (min $5K, 0.75% over $35K), account review
• Bank Provident Online - 1.25% (min $10) account review
• Wilshire State Bank - 1.25%, chk required (min $500) account review
• OneWest Bank - 1.25% (min $1K) account review
• Salem Five Direct - 1.25% Savings, account review
• Connexus CU - 1.25% MMA (min $20K) (1.75% $100K+) account review
• United Central Bank - 1.21% MMA (min $5K) (1.35% $75K-$150K) account review
• Zions Bank - 1.16% MMA, outside of Utah, (min $2.5K) account review
• ING Direct - 1.15%, (0.25% checking), post ($25 bonus)
• Capital One - 1.15% MMA, account review
• Union Federal Savings - 1.15% account review
• State Farm Bank - 1.15% Checking (min $2.5K) account review
• UnivestDirect - 1.15%, (0.25% checking), account review
• Intervest National Bank - 1.13% MMA (min $2.5K) account review
• EmigrantDirect - 1.10%, account review
• HSBC Advance - 1.10% account review
• E-LOAN - 1.05% Savings Plus (min $10K) other requirements, account review
• Discover Bank - 1.00% MMA (min $2.5K) (1.40% $10K-$100K, 1.50% $100K+) account review

3-Month Certificates of Deposit:

• Best 3-Month CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Danversbank - 1.25% (4 mo) (min $500) account review
• Southeast Financial FCU - 1.10% (min $500) account review
• TotalBank - 1.10% (min $1K) account review
• Palladian PrivateBank - 1.00% (min $10K) account review
• UFB Direct - 0.75% (min $8K)
• MetLife Bank - 0.40% (min $25K) account review

6-Month Certificates of Deposit:

• Best 6-Month CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Northrop Grumman FCU - 1.63% (min $40K), account review
• Southeast Financial FCU - 1.60% (min $500) account review
• Country Bank for Savings - 1.60% (min $500) account review
• Connexus CU - 1.50% (min $500) account review
• Palladian PrivateBank - 1.40% (min $10K) account review
• Jacksonville Bank - 1.40% (min $1K) account review
• State Bank of India - 1.36% (min $5K) account review
• UFB Direct - 1.33% (min $8K)
• Excel National Bank - 1.31% (min $10K) account review
• Century Bank Direct - 1.25% (5 mo) (min $1K) account review
• Ascencia Bank - 1.25% (min $500), account review
• Ally Bank - 1.24% (min $0) account review
• Colorado Federal Savings Bank - 1.20% ($5K min) account review
• ING Direct - 1.00%, account review
• MetLife Bank - 0.55% (min $25K) account review

9-Month Certificates of Deposit:

• EBSB Direct - 1.77% (10-mo) (min $1K) account review
• AmTrust Direct - 1.55% (min $1K) account review
• Century Bank Direct - 1.50% (10 mo) (min $1K) account review
• Doral Bank Direct - 1.40% (min $1K) account review
• OneWest Bank - 1.40% (min $5K) account review
• Acacia Federal Savings Bank - 1.35% (min $500) account review
• NewDominion Bank - 1.31% (min $3K) account review
• Ally Bank - 1.09% (min $0) No-Penalty, account review
• MetLife Bank - 0.65% (min $25K) account review

12-Month Certificates of Deposit:

• Best One-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Alliant Credit Union - 2.10% (min $25K) account review
• Melrose CU - 2.07% (min $5K) account review
• Country Bank for Savings - 2.00% (15-mo) (min $500) account review
• Southeast Financial FCU - 2.00% (min $500) account review
• Digital CU - 2.00% (14-mo) (min $500) account review
• First City Bank - 2.00% (min $1K) account review
• Palladian PrivateBank - 1.90% (min $10K) account review
• Golf Savings Bank - 1.90% (15-mo) (min $10K) account review
• Franklin Synergy Bank - 1.90% (min $1K) account review
• Northrop Grumman FCU - 1.87% (min $40K), account review
• Choice Financial - 1.85% (13 mo) (min $5K) add-on feature, account review
• Self-Help CU - 1.82% (min $500) account review
• Stonebridge Bank - 1.80% (14-mo) (min $500) account review
• Delta Community CU - 1.80% (min $1K) account review
• Connexus CU - 1.75% (min $500) account review
• AmTrust Direct - 1.70% (min $1K) account review
• Acacia Federal Savings Bank - 1.70% (min $500) account review
• Century Bank Direct - 1.70% (15-mo) (min $1K) account review
• Academy Bank - 1.70% (min $500) account review
• NewDominion Bank - 1.67% (min $3K) account review
• State Bank of India - 1.66% (min $5K) account review
• Jacksonville Bank - 1.65% (min $1K) account review
• USAA Bank - 1.65% (15-mo) (min $1K) (1.96% $175K min) account review
• Discover Bank - 1.60% (min $2.5K) account review
• BankUnited - 1.60% (min $5K) account review
• Ally Bank - 1.59% (min $0) account review
• Colorado Federal Savings Bank - 1.55% ($5K min) account review
• Northwest FCU - 1.52% (min $500) add-on, account review
• Ascencia Bank - 1.50% (min $500), account review
• Geauga Savings Bank - 1.45% (min $1K) account review
• UFB Direct - 1.45% (min $8K)
• Bank of Internet - 1.40% (min $1K) account review
• Wilshire State Bank - 1.40% (min $10K), liquid features, account review
• Fifth Third - 1.35% (13-mo) (min $5K) not all states, account review
• ING Direct - 1.25% (min $1) account review
• Consumers CU - 1.25% (15-mo) (min $250) (1.50% $100K+) account review
• Amboy Direct - 1.10% Add-On (min $10K) account review
• HSBC Advance - 1.01% (min $10) account review

18-Month Certificates of Deposit:

• Best 18-Month CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Citibank - 4.07% (min $200) (max $5K) requires secured credit card, account review
• Stonebridge Bank - 2.30% (21-mo) (min $500) account review
• Southeast Financial FCU - 2.11% (min $500) account review
• Alliant Credit Union - 2.10% (min $25K) account review
• Pacific Mercantile Bank - 2.02% IRA-only (min $7.5K) account review
• AmTrust Direct - 1.95% (min $1K) account review
• Century Bank Direct - 1.90% (20 mo) (min $1K) account review
• Discover Bank - 1.80% (min $2.5K), account review
• Academy Bank - 1.80% (min $500) account review
• NewDominion Bank - 1.76% (min $3K) account review
• Ally Bank - 1.73% (min $0) account review
• Colorado Federal Savings Bank - 1.65% ($5K min) account review
• DollarSavingsDirect - 1.65% (16-mo) (min $1K) verified by phone on 2/27 account review
• Nationwide Bank - 1.60% (min $500) account review

24-Month Certificates of Deposit:

• Best Two-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Wings Financial CU - 2.52% (min $500) Limited Membership, account review
• Melrose CU - 2.32% (min $5K) account review
• Atlantic Coast Bank - 2.30% account review
• Hudson City Bank - 2.30% (min $5K) account review
• Country Bank for Savings - 2.25% (min $500) account review
• America's CU - 2.25% (29 mo) (min $500) account review
• Gateway Regional CU - 2.25% (min $1K) restrictions to membership, account review
• Southeast Financial FCU - 2.25% (min $500) account review
• Golf Savings Bank - 2.20% (min $10K) account review
• State Bank of India - 2.17% (min $5K) account review
• Northrop Grumman FCU - 2.15% (min $40K), account review
• AmTrust Direct - 2.15% (min $1K) account review
• Discover Bank - 2.15% (min $2.5K) account review
• NewDominion Bank - 2.11% (min $3K) account review
• Jacksonville Bank - 2.10% (min $1K) account review
• Tennessee Commerce Bank - 2.10% (min $5K) account review
• Self-Help CU - 2.07% (min $500) account review
• Northpointe Bank - 2.07% (min $5K) account review
• ISN Bank - 2.06% (min $1K) account review
• USAA Bank - 2.05% (min $1K) (2.36% $175K min) account review
• Ally Bank - 2.04% (min $0) Bump-Up, account review
• Broadway Federal Bank - 2.02% (min $1K) account review
• Northwest FCU - 2.02% (min $500) add-on, account review
• AIG Bank - 2.01% (min $2.5K) account review
• American Express Bank - 2.00% (min $0) account review
• Main Street Bank - 2.00% (min $10K) account review
• Equity Bank - 1.99% (min $1K) account review

36-Month Certificate of Deposit:

• Best 3-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Wings Financial CU - 3.03% (min $500) Limited Membership, account review
• Pentagon Federal CU - 3.00% (min $1K), account review
• Melrose CU - 2.83% (min $5K) account review
• Hudson City Bank - 2.80% (min $5K) account review
• EBSB Direct - 2.75% (min $1K) account review
• BankUnited - 2.75% (min $5K) account review
• Atlantic Coast Bank - 2.70% account review
• Acacia Federal Savings Bank - 2.65% (min $500) account review
• iGobanking - 2.60% (min $500), account review
• Alliant Credit Union - 2.60% (min $25K) account review
• Northrop Grumman FCU - 2.56% (min $40K), account review
• Air Force FCU - 2.55% (min $25K) membership restrictions account review
• State Bank of India - 2.52% (min $5K) account review
• NewDominion Bank - 2.51% (min $3K) account review
• Discover Bank - 2.50% (min $2.5K) account review
• Agriculture FCU - 2.50% (min $1K) account review
• Ally Bank - 2.49% (min $0) account review
• Jacksonville Bank - 2.40% (min $1K) account review
• Nationwide Bank - 2.40% (min $500) account review

48-Month Certificate of Deposit:

• Best 4-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• BankUnited - 3.25% (min $5K) account review
• Pentagon Federal CU - 3.25% (min $1K), account review
• Hudson City Bank - 3.15% (min $5K) account review
• Wings Financial CU - 3.14% (min $500) Limited Membership, account review
• Alliant Credit Union - 3.10% (min $25K) account review
• Melrose CU - 3.09% (min $5K) account review
• Apple FCU - 3.00% (min $500) account review
• Acacia Federal Savings Bank - 3.00% (min $500) account review
• National Bank of KC - 2.98% (min $10K) account review
• Gateway Regional CU - 2.80% (min $1K) restrictions to membership, account review
• USAA Bank - 2.75% (min $1K) (3.06% $175K min) account review
• Third Federal - 2.75% (min $500) account review
• Ally Bank - 2.74% (min $0) account review
• Discover Bank - 2.65% (min $2.5K) account review
• Capital One - 2.50% (min $5K) account review

60-Month Certificate of Deposit:

• Best 5-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Melrose CU - 3.65% (min $5K) account review
• Apple FCU - 3.60% (min $50K) account review
• BankUnited - 3.50% (min $5K) account review
• Pentagon Federal CU - 3.50% (min $1K), account review
• EverBank - 3.47% ($1.5K min) account review
• Hudson City Bank - 3.40% (min $5K) account review
• Wings Financial CU - 3.39% (min $500) Limited Membership, account review
• US Bank - 3.35% (59 mo) (min $1K) account review
• Acacia Federal Savings Bank - 3.30% (min $500) account review
• OneWest Bank - 3.30% (min $5K) account review
• Agriculture FCU - 3.30% (min $1K), account review
• Northwest FCU - 3.30% (min $25K) account review
• State Bank of India - 3.29% (min $5K) account review
• Connexus CU - 3.25% (min $1K) account review
• Dime Savings Bank - 3.25% (min $500) account review
• iGobanking - 3.25% (min $500), account review
• Discover Bank - 3.20% (min $2.5K) account review
• Mountain America CU - 3.20% (min $1K) account review
• Ally Bank - 3.15% (min $0) account review
• Intervest - 3.10% (min $2.5K), account review
• USAA Bank - 3.10% (min $1K) (3.41% $175K min) account review
• Capital One/Costco - 3.05% (min $5K) account review
• Gateway Regional CU - 3.05% (min $1K) restrictions to membership, account review
• Patelco CU - 3.04% ($1K min), account review
• Capital One - 3.00% (min $5K) account review
• Chase Bank - 3.00% (min $10K)

84-Month Certificate of Deposit:

• Navy FCU - 4.25% IRA-only ($20K min) restrictions to membership, account review
• Navy FCU - 4.00% ($20K min) restrictions to membership, account review
• USAA Bank - 3.75% (min $1K) (4.06% $175K min) account review
• Apple FCU - 3.75% (min $50K) (4.00% 10yr) account review
• Pentagon Federal CU - 3.75% (min $1K), account review
• Bank of America DOW - 3.61% (10-yr) (min $1K) account review
• Discover Bank - 3.40% (min $2.5K) (3.70% 10yr) account review
• Capital One/Costco - 3.30% (min $5K) account review
• Third Federal - 3.25% (6-yr) (min $500) account review
• Capital One - 3.25% (min $5K) account review
• Intervest - 3.20% (min $2.5K), account review

Various Deposit Account Deals

• Checking/Savings Account Bonuses
• Best IRA CD rates, local and nationwide deals
• Latest CD and Savings Account Deals with No Major Deposit Limitiations

High Yield Reward Checking Accounts - Open to All

• Reward Checking Accounts Available Nationwide

Recent CD Specials at Local Credit Unions and Banks

• Best Deals and CD Rates by State

Bank Account Alternatives

• GE Interest Plus - 1.90% rate for $50k+
• Vanguard Tax-Exempt Money Market Fund - 0.11% 7-day yield
• Paypal Money Market Fund - 0.05% 7-day yield (1% cashback debit MasterCard)
• Fidelity Money Market Fund - 0.01% 7-day yield (reviews on Fatwallet)
• Vanguard Prime Money Market Fund - 0.01% 7-day yield
• Fidelity Municipal Money Market Fund - 0.01% 7-day yield
• TIAA-CREF Money Market Fund - 0.00% 7-day yield
• FW Thread on Treasury Bills
• I Bonds for 2009, I Bond Article, I Bonds as CD Alternatives

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

While writing the post for yesterday's bank failures, I noticed Umpqua Bank which took over the failed bank Rainier Pacific Bank has a reward checking account. The reason why I found this interesting is that Umpqua Bank is sizable, and it's getting bigger with yesterday's acquisition of Rainier Pacific. Umpqua Bank also acquired Evergreen Bank when it failed in January.

So this had me wondering how many banks with over $2 billion in deposits are offering reward checking accounts, and how do these reward checking accounts compare with the ones from the smaller banks?

I've found four sizable banks that offer reward checking accounts. Please leave a comment if you know of other ones. Compared to the reward checking accounts at smaller banks, they are not nearly as competitive. However, if you prefer to bank at a local branch, these banks have quite a few branches in their regions. So they do give you another option.

The following table's APYs are based on the banks' website as of 2/27/2010. Deposits and branch numbers based on 12/31/09 FDIC data.

One thing that may explain Hanmi's low rate is this public enforcement action that was issued by the Federal Reserve last November. If Hanmi Bank is considered less than well capitalized, it be me required to keep the rate under the FDIC rate cap for interest checking accounts.

Other Reward Checking Accounts

If you don't mind opening accounts without a branch visit, you'll have many more options at higher yields on reward checking accounts. To find nationwide reward checking accounts and reward checking accounts in your local area, please refer to the reward checking section of DepositAccounts.com.

Two banks failed today. The closures were in Nevada and Washington State. For both cases, the FDIC was able to find buyers which agreed to assume all deposits. The only concern will be for those who have CDs at these closed banks. The acquiring banks haven't stated if they will honor the CD rates. They have the right to reduce the rates, but if they do, customers will have the right to make a penalty-free withdrawal.

The Washington State bank that failed was Rainier Pacific Bank. I had reported on this bank's online money market account that used to have a competitive yield. However, the rate fell way down to 0.50% last May. The FDIC was able to arrange for Umpqua Bank to assume all deposits.

There were two credit union failures this week: one today and one yesterday. The total number of credit union failures this year is 3. Both credit unions that were liquidated this week were tiny with assets under $10 million. For both closures, the NCUA was able to find buyers which agreed to assume all deposits.

Below is a summary of today's bank failures:

21st Bank Failure of 2010 (1st NV)

• FDIC Press Release
• Closed Bank: Carson River Community Bank, Carson City, NV
• Size: 1 branch, $51.1 in assets, $50.0 million in deposits
• Possible Uninsured Deposits: all deposits, excluding the Cede & Co. brokered deposits, have been transferred
• Acquiring Bank: Heritage Bank of Nevada, Reno, NV
• Rate Changes: Heritage Bank of Nevada will review rates
• Estimated Cost to Deposit Insurance Fund: $7.9 million
• Enforcement Action: FDIC 4/3/09 C&D Order
• Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

22nd Bank Failure of 2010 (4th in WA)

• FDIC Press Release
• Closed Bank: Rainier Pacific Bank, Tacoma, WA
• Size: 14 branches, $717.8 million in assets, $446.2 million in deposits
• Possible Uninsured Deposits: All deposits, excluding the Cede & Co. brokered deposits, have been transferred
• Acquiring Bank: Umpqua Bank, Roseburg, OR
• Rate Changes: Umpqua Bank will review rates
• Estimated Cost to Deposit Insurance Fund: $95.2 million
• Enforcement Action: FDIC 9/30/09 C&D Order
• Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

References:

• FDIC list of failed banks
• Latest FDIC info on deposit insurance
• Last 20 of my bank failure posts
• Review of the 2009 bank and credit union failures
• 10 Lessons from the 2008 bank failures
• Review of the 2008 credit union liquidations

Northrop Grumman Federal Credit Union is offering special 9-month, 18-month, 30-month and 60-month CDs and IRA CDs. Unfortunately, these are not available to all members (see below). The best rates require a $40K minimum deposit. These are listed at the credit union's rates page as of 2/26/2010 and include:

• 1.92% APY 9 months
• 2.41% APY 18 months
• 2.81% APY 30 months
• 3.63% APY 60 months

Rates are about 25 basis points lower for a $2,500 minimum.

Unfortunately, unlike NGFCU's standard CDs, these specials are available to NGFCU members of record prior to 1/31/2010 and to NGC and LA Metro employees and their family members who are not current members. Note, this restriction is stated near the top of the rates page. This is the same promotion that NGFCU did last year (and the year before), so if you're not already a member, you may want to join now so you can take advantage if they offer this again next year.

For those who don't qualify for these promotions, NGFCU continues to have some competitive rates on its regular CDs. These are listed at the credit union's rates page as of 2/26/2010, and the most competitive ones include:

• 1.63% APY 6 months
• 1.87% APY 12 months
• 2.15% APY 24 months
• 3.32% APY 48 months

The above rates require a minimum deposit of $40K. Rates are about 25 basis points lower for a $2.5K minimum.

Membership Eligibility

Anyone can qualify for NGFUC membership by joining the Southern California Historical Aircraft Foundation (SCHAF). The credit union website has an online application link that takes you to the Andera service where you can join the SCHAF, join the credit union and open accounts. According to the first page of the Andera application:

Members of the Southern California Historical Aircraft Foundation (SCHAF). When you join using this method, you will receive a free one-year membership in SCHAF concurrent with your lifetime Credit Union membership.

Refer to the credit union's eligibility page for more details. For more details about membership and their certificates, please refer to my 2008 Northrop Grumman FCU review post.

NGFCU has branches in several cities of California, Illinois, Maryland, Virginia, Louisiana and Florida.

NGFCU ratings for safety and soundness are above average: 5 stars (superior) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The credit union is federally insured by the NCUA (Charter # 24292).

Sharonview Federal Credit Union is offering some very competitive CDs and IRA CDs especially for large deposits. The most competitive CDs for a $100K minimum include:

• 2.25% APY 6 months
• 2.50% APY 12 months
• 2.75% APY 24 months
• 3.00% APY 36 months

Rates are 25 basis points less for a $50K minimum deposit and 50 basis points less for a $10K deposit. Even for a $10K deposit, the 6- and 12-month CD rates are still competitive.

Unfortunately, membership appears primarily limited to select employer groups. There's not many details on the credit union's Join page. It gives the following instructions to determine eligibility:

If you would like to find out if you qualify through your current employer, please call our Financial Solutions Center at (704) 969-6700 in the Charlotte, NC area, or (800) 462-4421, Monday through Friday, 8:00 AM until 6:00 PM EST.

Branches are located in North Carolina, South Carolina, New Jersey and Pennsylvania.

The credit union's ratings for safety and soundness are a little mixed: 4 stars (excellent) at BauerFinancial and 2 stars (below peer group) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The credit union is federally insured by the NCUA (Charter # 22458).

Southbridge Savings Bank is offering a special 2.00% APY 15-month CD. Minimum deposit is $500. It's also available as a Traditional and Roth IRA. This special is listed in the bank's rate tables as of 2/26/2010.

The bank has been offering a reward checking account since July 2007. Back in 2007, the top rate was 6.01% APY for balances up to $50K. This has fallen 2.50% APY, but at least the tier remains at $50K. There's also a companion savings account called Key Rewards Saver which is currently paying 1.25% APY on balances up to $100K. Refer to my Southbridge reward checking review for more details.

It appears a branch visit is required to open an account. Branches are located in Massachusetts cities of Southbridge, Charlton, Holden, Sturbridge and Worcester. They also have branches in Big Y Supermarkets in several other cities.

The bank's ratings for safety and soundness are a little weak: 3 stars (adequate) at BauerFinancial and 2 stars (below peer group) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank was established in 1848 and has been a FDIC member since 1981(FDIC Certificate # 23524).

Bogota Savings Bank is offering some competitive CD and IRA CD rates. The most competitive is the 4-year CD which has a 3.25% APY. Other decent deals include a 2.25% APY 2-year CD and a 1.90% APY 18-month CD. Minimum deposit is $1,000. These rates are listed in the bank's rates page as of 2/26/2010.

In addition to CD rates, there's also a good deal on a money market account. The top rate is 1.50% APY as of 2/26/2010 for a minimum balance of $50K.

It appears that a branch visit is required to open an account. Branches are located in Bogota and Teaneck, New Jersey.

The bank's ratings for safety and soundness are strong: 5 stars (superior) at BauerFinancial and 4 stars (sound) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 1937 (FDIC Certificate # 29941).

Hat tip to Wil who mentioned this 4-year CD in the comments.

After reading this NYT Bucks blog post, I thought it was time to provide an update on my list of the best online savings accounts. This NYT blog post used Bankrate's quarterly rankings to come up with a list of savings accounts that have a history of staying competitive. One problem I see is that they included 3 banks that have failed. Also, I don't know how M&T Bank, NA qualified. Their online savings accounts have been paying only 0.50% for a while (both at mandtbank.com and at onbank.com).

I've been following a few nationally available savings accounts for the last year in an attempt to identify the savings accounts with the best chance of staying competitive. In addition to top rates, I consider financial health and account features like ACH bank-to-bank transfer service.

My last review was in December. I'm afraid only one has remained on top. Here's the updated list:

Alliant Credit Union is the clear winner with a 2.00% APY. In addition, readers have reported that this will continue through March. Refer to my Alliant review for more details about the credit union and the savings account.

CNB BankDirect and Discover Bank are tied for second with a 1.35% APY savings account. With Discover Bank's new account center, I would give them the edge (see my Discover Bank review). Also, existing customers are currently receiving a higher savings account rate (around 1.60%).

CNB BankDirect is the internet division of The Citizens National Bank of Bluffton, Ohio. It's a small bank with only $419 million in deposits. As a comparison, Discover Bank has $33.5 billion in deposits. CNB BankDirect launched in the summer of 2008 and in the fall of 2008 began offering a 4% intro yield guaranteed for 6 months. They held to their guarantee, and they have remained very competitive until recently (see review).

1st Constitution Direct is at the bottom with a 1.25% APY. Even their 3-month intro rate is only 1.25% APY. I first reported on their savings account in June 2008 when the 3-month intro rate was 4.00% APY with a standard rate of 3.25% APY.

I think it's time for a new list. What is your pick for the best savings account?

BankUnited has recently increased its long-term CD rates. They're now quite competitive: 3.25% APY for 4 years and 3.50% APY for 5 years. These are listed at the bank's CD rates page as of 2/25/2010. Minimum deposit is $5,000, and new money is required.

The CD details are listed in the truth in savings disclosure (pdf). The early withdrawal penalty for terms over one year is 180 days of interest.

BankUnited has offered several CD deals since the new bank was established after the old BankUnited was seized by the FDIC in May 2009. I contacted the bank last September and was informed of the CD application process. As I mentioned in my September BankUnited review, BankUnited still didn't have an easy process to open and close CDs if you don't live near a branch. Refer to that post for more details. Hopefully, the new BankUnited has made improvements.

Branches are located throughout South Florida.

With BankUnited being a new bank after the May 2009 seizure, there shouldn't be any concern about another closure any time soon (but it's always wise to stay below the FDIC limit). The new BankUnited's FDIC charter was started on May 21, 2009 (FDIC Certificate # 58979).

Update 4/16/2010: The reward checking and savings accounts are no longer available at CommerceWest Bank.

CommerceWest Bank is offering a high-yield reward checking account with the following rates and features if certain monthly requirements are met:

• 3.00% APY on balances up to $25,000
• 1.01% APY on portion of balance over $25,000
• 0.05% base rate if requirements are not met
• ATM fee refunds nationwide

The monthly requirements include:

• 12 debit card purchases
• 1 recurring Direct Deposit, ACH Auto Debit, or Online Bill Payment
• Receive e-statements

Other features of the account include:

• No minimum balance
• No monthly service charge
• Free NetBanker Online Banking with BillPay

The bank also offers a companion savings account called RealSavings with the following rates if the above RewardChecking requirements are met:

• 2.00% APY on balances up to $25,000
• 1.01% APY on portion of balance over $25,000
• 0.05% base rate if requirements are not met

There's an online application on the micro-website. However, on the first page, I don't see an "open a new account" button as mentioned in the instructions. I've sent an email asking about this. Hopefully, the accounts are still available.

This appears to be a local deal limited to those in the Los Angeles metro area. Here is what is mentioned on the website:

we're expanding our services to personal clients in Irvine, Carson, Corona, and the rest of greater Los Angeles

Branches are located in the California cities of Irvine, Corona, Los Angeles, Newport Beach, Poway, San Marcos and Gardena.

The bank's ratings for safety and soundness are a little mixed: 3½ stars (good) at BauerFinancial and 2 stars (below peer group) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 2001 (FDIC Certificate # 57176).

Reward Checking/Savings Combo

As I mentioned yesterday these companion savings accounts are becoming more popular for banks to offer with their reward checking accounts. It can be useful for those with more than $25K in savings. However, for the case of CommerceWest, it doesn't help too much more since the savings account also has a $25K tier.

Other Reward Checking Accounts

There are still nationwide reward checking accounts paying 4% (see post) and a few local accounts paying over 5% (see post). However, rates under 4% are becoming more common, and anything at 3% or above is a decent deal for reward checking rates.

To find nationwide reward checking accounts and reward checking accounts in your local area, please refer to the reward checking section of DepositAccounts.com.

Not all of ETrade Bank's Complete Savings Account customers are being moved to Discover Bank. As I mentioned on February 9th, I and many others received an email from ETrade Bank informing us that our Complete Savings Accounts will be transferred to Discover Bank's Online Savings Accounts on March 7, 2010. I only have the Complete Savings Account, but many readers who also have ETrade's brokerage accounts have reported not being notified of this move. This Chicago Tribune article confirms that ETrade is "selling only accounts that have no ongoing brokerage relationship with the company." I just called ETrade Bank, and the CSR confirmed this. Only some Complete Savings Accounts are being transferred, and all Max-Rate Checking Accounts will remain at ETrade Bank.

As we've seen with ETrade Bank's very low deposit rates, ETrade Bank has been implementing a strategy to reduce its deposits. I just hope customers who have CDs at ETrade Bank don't let them automatically renew. A customer who lets his 1-year CD automatically renew may end up with a 1-year CD paying 0.10% (that's one-tenth of one percent).

I was just going to let my ETrade Complete Savings Account be transferred on March 7th. However, after seeing Jim's post at Bargaineering about how to close an ETrade account, I think I'll just close it before then. I plan to transfer out the remaining balance at ETrade Bank, and then send a secure message instructing them to close the Complete Savings Account.

For me there's no sense in having ETrade Bank transfer the little bit of money that I have in the account to Discover Bank. I don't need a new account there. I just recently opened the Discover Bank online savings account so that I could review Discover's new online banking center. Those who plan to let their accounts be transferred should be relatively happy about Discover Bank. From what I could see, Discover's new account center has all the functionality of ETrade's. The only downside appears to be slower ACH transfers.

Murphy-Wall State Bank and Trust is offering a high-yield reward checking account called Kasasa Cash. The account has the following rates and features if certain monthly requirements are met:

• 3.50% APY on balances up $25,000
• 0.50% APY on portion of balance over $25,000
• 0.05% base rate if requirements are not met
• ATM fee refunds nationwide up to $25 per month

The monthly requirements include:

• 10 check card purchases
• 1 direct deposit or ACH auto debit
• Access Online Banking
• Receive eStatements

Other features of this account include:

• $100 minimum initial deposit
• No monthly fee
• No minimum balance
• Free Online Banking with Bill Pay

The bank also offers the Kasasa Saver account which allows you to earn a decent rate if you have balances over $25,000. It offers the following rates if you meet the above requirements for your Kasasa Cash account:

• 1.50% APY on balances up to $50,000
• 0.50% APY on portion of balances over $50,000
• 0.05% APY base rate if requirements are not met

Like the Kasasa Cash account, it has no monthly fees or minimum balance requirements.

There's an online application link at the bank's Kasasa Cash page. This link takes you to the Kasasa website that provides the online application service.

The application only accepts certain zip codes. As of 2/24/10, all Illinois zip codes appear to be accepted including zip codes from Chicago. Note, it has been common for banks to change availability on these accounts. So if it doesn't accept your Illinois zip code, please leave a comment.

Branches are located in southern Illinois in the cities of Pinckneyville and Murphysboro.

The bank's ratings for safety and soundness are strong: 4 stars (excellent) at BauerFinancial and 4 stars (sound) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 1934 (FDIC Certificate # 10860).

Value of Kasasa Saver?

I've seen more banks include the Saver account with the reward checking account. The Saver account can be useful for those who have balances over the reward checking cap and don't want the hassles of maintaining multiple reward checking accounts. As in the case above, the Saver rate is very competitive compared to internet savings account rates.

Other Reward Checking Accounts

There are still nationwide reward checking accounts paying 4% (see post) and a few local reward checking accounts that are even paying over 5% (see post). However, rates under 4% are becoming more common, and anything over 3% is a decent deal for reward checking rates.

To find nationwide reward checking accounts and reward checking accounts in your local area, please refer to the reward checking section of DepositAccounts.com.

CheckSpring Bank is offering a special 13-month CD with a 2.00% APY. Minimum deposit is $1,000. This special isn't listed on the bank's website. I emailed the bank yesterday (2/23/10) and was told of this special. The special is subject to change at anytime.

It's a small bank located in Bronx of New York City. It appears that a branch visit is required to open an account.

The bank was established in 2007, and thus, it's labeled as a start-up at BauerFinancial without a rating. However, Bankrate.com gives it a 3-star rating (performing) for safety and soundness based on 9/30/09 financial data. The bank has been a FDIC member since October 2007 (FDIC Certificate # 58668).

The FDIC released its fourth quarter 2009 report on the banking industry. Here are some of the noteworthy excerpts from the press release:

• For the full-year, banks reported net income totaling $12.5 billion – up from $4.5 billion in 2008 (but way below $105.5 billion in 2007)
• At the end of December, there were 702 insured institutions on the "Problem List," up from 552 on September 30.
• Total assets of "problem" institutions increased during the quarter from $345.9 billion to $402.8 billion
• 45 institutions failed during the fourth quarter (50 had failed in Q3), bringing the total number of failures for the 2009 to 140, the highest annual total since 1992.
• The FDIC's liquid resources - cash and marketable securities - increased to $66 billion at year-end from $23 billion at the end of September (due to the 3-year prepayment from the banks)
• The Deposit Insurance Fund (DIF) balance – the net worth of the fund – decreased by $12.7 billion during the fourth quarter.
• Total insured deposits increased by 13.5 percent ($641.3 billion) during 2009, which reflects the temporary increase in the standard maximum FDIC deposit insurance amount from $100,000 to $250,000.

The FDIC doesn't point out the problem banks. CalculatedRisk Blog has an unofficial list of 617 problem banks based on public enforcement actions. There's also a list of the banks with the highest levels of troubled loans at MSNBC.

So far this year there have been 20 bank failures. Four banks failed last Friday. It's interesting to note that two of these four banks weren't on CR's unofficial problem bank list, and one had a 5-star BauerFinancial rating. News reports indicate fraud was the reason for the sudden closure of that 5-star bank.

In addition to the quarterly report, the FDIC updated its database with the banks' financial data for the end of the fourth quarter. Ratings services like BauerFinancial and Bankrate.com use this data for their star ratings. Recent ratings have been based on 9/30/09 data. Their new ratings based on 12/31/09 data should be out soon. BauerFinancial has typically been the first to include the new data. Bankrate.com has been taking over a month to update its database.

American Bank of Commerce is offering a competitive 2-year CD yield of 2.32% APY. Minimum deposit is $1,000. This CD rate isn't listed at the bank's website. A reader emailed me news of this, and I just contacted the bank for additional details. The CSR didn't know how long this rate would last. It has been this rate since January. According to the CSR, this rate is available at all of their branches. The early withdrawal penalty is 90 days of interest.

A branch visit is required to open an account. Branches are located in Texas cities of Austin, Lubbock, Mansfield, Plano and Wolfforth, and in the Colorado cities of Pueblo and Colorado Springs.

The bank's ratings for safety and soundness are a little mixed: 3½ stars (good) at BauerFinancial and 2 stars (below peer group) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 1962 (FDIC Certificate # 18609).

AnchorBank is offering a special CD called Rising Rate CD. It offers a 2.00% interest rate for the first 12 months. At the 12-month mark, you can choose to cash out your CD, or receive a 2.22% interest rate for an additional 18 months. Minimum deposit is $5,000. These rates are listed at the bank's rates page as of 2/23/2010. Rates are only displayed for zip codes that fall within the bank's market area. I checked the rates for zip codes in Madison and Milwaukee, and both had these same rates.

The above CD rate would be a little low if it's compared to a 30-month CD. However, it's a very good deal when compared to 12-month CDs. Having the option to continue the CD for another 18 months could come in handy if rates continue to fall.

Checking Account Bonuses

AnchorBank is also offering $50 for opening its free checking account. Refer to the bank's promotions page for the details. Minimum deposit is $100. This appears to be a very easy bonus with no direct deposit requirement. The only requirement that I see in the small print is that the "account must remain open for six months and should be utilized as the primary checking account." I'm not sure how they define being utilized as a the primary checking account.

There's also a $25 bonus for opening a second checking account. This promotions page has the details.

Branch Locations

AnchorBank has branches throughout Wisconsin including the cities of Madison, Milwaukee, Green Bay, Columbus, Eau Claire, Berlin and Oshkosh.

Financial Overview

AnchorBank is not in the best financial shape. According to this BizTimes.com article:

As a result of the third quarter loss, ABCW remains undercapitalized at the bank level according to the terms of the Order to Cease and Desist by the Office of Thrift Supervision. Being undercapitalized subjects the bank to several operating restrictions, including increased premiums for deposit insurance, prior approval from the Federal Deposit Insurance Corp. in order to access brokered deposits, and increased scrutiny by the Office of Thrift Supervision

Note, ABCW is short for Anchor BanCorp Wisconsin Inc. which is the parent of AnchorBank. Here's the link to the OTS's C&D Order (pdf).

If they are considered less than well capitalized, they are likely subject to the FDIC's rate caps. It's interesting to note that the rate cap for a 30-month CD is around 2.21% (average between the 24- and 36-month CDs). I wonder if this Rising Rate CD would be considered a 30-month CD. The rate cap for a 12-month CD is only 1.59%.

As you might expect, AnchorBank's ratings for safety and soundness are weak: 1 star (lowest) at Bankrate.com and 0 star (lowest) at BauerFinancial. Both ratings are based on 9/30/09 financial data.

AnchorBank is a sizable bank with $3.6 billion in deposits. It has been a FDIC member since 1938 (FDIC Certificate # 29979).

American Pride Bank is offering a hot 6-month CD special with a 2.29% APY. Minimum deposit is $500. This is listed as the bank's featured product on the front page of the website as of 2/23/2010.

It appears that a branch visit is required to open an account. Branches are located in Macon and Warner Robins, Georgia.

With Georgia being the state with the most bank failures over the last couple of years, it's wise to be a little suspicious of Georgia banks offering high deposit rates. However, American Pride Bank appears to be in decent shape. Bankrate.com gives it a 3-star rating (performing) based on 9/30/09 financial data. BauerFinancial labels the bank as a start-up. The bank has been a FDIC member since 2007 (FDIC Certificate # 58584).

Broward Bank of Commerce is offering a competitive 2-year CD which has a 2.35% APY. The other CD terms are not as competitive. The only other one of note is the 5-year CD which has a 3.15% APY. These are also available in an IRA. Another noteworthy account is the bank's money market account. It's a tiered account with a 1.45% APY for balances of $10K to $50K. The yield goes up to 2.10% APY, but this requires a $1 million balance. These rates are listed in the bank's rate sheet as of 2/23/2010.

I last reported on this bank in October 2009 when the money market account had a 2% APY on $10K balance.

Broward Bank of Commerce is a small bank with one office located in Fort Lauderdale.

The bank was just established in January 2009, so it's too new to have ratings for safety and soundness. It has been a FDIC member since it was established (FDIC Certificate # 58813).

1st Mariner Bank is offering a 2.30% APY 18-month CD special. Minimum deposit is $500, and the maximum is $100,000. The special is listed on the bank's front page as of 2/23/2010, and it can be opened by phone or at one of the bank's branches. I was told by the CSR that they can accept out-of-state deposits, and the CD can be funded via an ACH transfer from an existing checking or savings account. According to the CSR, the special rate is good at least through 2/24/2010. Rates are subject to change every Thursday.

1st Mariner Bank's branches are located in several Maryland cities including Baltimore, Annapolis, Westminster, Bel Air, Columbia and Easton. There's also a branch in Shrewsbury, PA.

The bank's ratings for safety and soundness are weak: 1 star (troubled) at BauerFinancial and 1 star (lowest) at Bankrate.com. Both ratings are based on 9/30/09 financial data. Another issue to note is that the bank received a FDIC Cease-and-Desist Order on 9/18/09. The bank has been a FDIC member since 1962 (FDIC Certificate # 31286).

Last week I reported on five nationwide reward checking accounts with yields of at least 4% and that have been around for at least 2 years. Higher reward checking rates are available, but they are only local deals. There are no nationwide 5% reward checking accounts that I'm aware of, however, there are still many reward checking accounts available in parts of the country where you can get at least 5% APY for balances up to $25K. As a comparison, ING Direct's savings account is currently paying 1.15% APY. So a 5% APY these days is an especially sweet deal even for the extra hassles required of reward checking. I've gone back through my old posts and identified 5 that have been offering 5%+ rates for over a year.

This shows that if you have a choice between two reward checking accounts with one limited to your local area and the other available nationwide, the local one will have a better chance maintaining higher rates. Nationwide accounts attract more rate chasers who will maintain larger balances and make fewer debit card purchases. You want a reward checking account at an institution where there are more of the average Joes who maintain smaller balances and spend a lot more on their debit cards. This will make it easier for the institution to keep high rates. Refer to my math behind reward checking to see why this is the case.

Even institutions that keep their accounts restricted to their local areas may not have an easy time maintaining the high rates. Similar to my post from last week, I thought it would be interesting to see if there were any reward checking accounts that have been around for over a year that are still offering at least 5%. As I mentioned, these are not nationwide deals, but if you're fortunate to live near one of these institutions, you can still get a rate that's more than 4x the rate you can find at most internet banks.

There's no guarantee that these institutions will maintain these high rates, but that's why I'm picking out the institutions that have been offering them for over a year (This is based on when I first posted on the account). This is not a guarantee that the high rate will continue, but at least you know it's not a teaser rate.

Rates as of 2/22/2010:

1. Golden Plains Credit Union's Golden Rewards Checking still pays 6.01% APY on balances up to $25K. My first review of this account was in April 2008. The credit union has an easy way you can qualify for membership via an association, however, the credit union did the unusual thing to restrict this account to only members who are Kansas residents.
2. Erie General Electric Credit Union's HD Checking has been paying around 5.12% APY on balances up to $25K since May 2008 when I first reviewed the account. One thing that's atypical about this account is that it has a minimum balance requirement of $500. Most reward checking accounts have no minimum. Membership is limited to residents in Erie and Crawford County, PA
3. Crescent State Bank's reward checking has been paying 5.01% APY since January 2009. One thing that has changed since my 2009 review is that they now limit the number of accounts to two per customer. One positive change is that the bank now has an online application, but it states that they are only accepting various zip codes within the state of North Carolina.
4. Pelican State Credit Union's e-Xtra Bonus Checking used to pay 5.25% APY for balances up to $30K, but this went down to 5.01% APY last October (wish all rate drops could be this small). The $30K cap is nice, but you pay for it with a higher debit card usage requirement (15 per month). I first reported on this account in July 2008. Membership is limited to those who live, work or worship in certain areas of Louisiana.
5. Southern Bank's Kasasa Cash account has been paying 5.01% APY on balances up to $25K since May 2009. It had been paying 6.01% APY when I did my first review in October 2008. Another unfortunate change has been reduced availability. It started out with nationwide availability. Its availability was first reduced to 5 states, and now it's only available to residents of Missouri and Arkansas.

Please note that the above rates are based on the institution's website as of the morning of 2/22/2010. Please check with the institutions for the latest rates. As we've seen in the last year, high rates can drop fast. However, at least the above institutions have a history of high rates so you know these are not teaser rates.

To find nationwide reward checking accounts and reward checking accounts in your local area, please refer to the reward checking section of DepositAccounts.com.

Home Federal Bank is offering a high-yield reward checking account called the Ultimate Checking. It has the following rates and features if certain monthly requirements are met:

• 3.01% APY on balances up to $25,000
• 0.85% APY on portion of balance over $25,000
• 0.05% base rate if requirements are not met
• Refund of domestic ATM fees up to $3 per item (maximum $20 per month)

Monthly requirements include:

• 12 signature based VISA check card purchases
• 1 direct deposit into or one auto debit
• Enroll and receive e-statements (with paper statements canceled)

Other features of the account include:

• $50 minimum opening deposit
• No minimum balance requirement
• No monthly service fees

$100 Sign-Up Bonus until 3/31/2010

At the bottom of the bank's micro-website, there's a link to a $100 promotions page. To qualify for the $100 bonus, you must open a new account by 3/31/2010 at any of the bank's branches. The bonus will automatically be credited to your account within 10 business days. Credit to iBankDesign for this find.

It's rare to see new-account bonuses on reward checking accounts. But the rate is a tad low for reward checking, so for those who care more about the rate, it may not be worth it.

Branches in ID and OR

There's an online application, but the application at the bank's micro-website implies that you have to come in to a branch to complete the application process. Branches are located in several cities in Idaho and Oregon including the cities of Boise, Idaho and Redmond, Oregon.

Financial/FDIC Overview

The bank's ratings for safety and soundness are strong: 4 stars (excellent) at BauerFinancial and 4 stars (sound) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 1936 (FDIC Certificate # 28258).

Update 2/22/10: The 2.20% 30-month CD yield didn't last long. The bank cut the rate after this post was first published to 2.05% APY.

Superior Bank is offering no-penalty CDs with some competitive rates. The highest rate is 2.05% APY for a 30-month term. Lower rates are available for shorter terms, but I'm not sure why you would go for a shorter term when there's no penalty for early closure. Minimum deposit is $1,000, and the maximum is $250,000. The only penalty mentioned is if the account is closed within the first 30 days of the term. These rates are listed in the bank's rates page as of 2/22/2010.

It appears that a branch visit is required to open an account. The bank's office is located in Hazelwood, Missouri which is in the suburbs of St. Louis.

The bank's ratings for safety and soundness are a little weak: 2 stars (below peer group) at Bankrate.com and 2 stars (problematic) at BauerFinancial. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 2004 (FDIC Certificate # 57884).

Over the last five years, I've opened many bank and credit union accounts. Not only did I want to take advantage of deals, but I also wanted to review the accounts for this blog. If there are no monthly fees or minimum balance requirements, I've typically left the accounts open just in case a good deal returns. The result is that I've accumulated many accounts, and it's time consuming to log into all of them on a regular basis. So I decided it was time to give one of the account aggregation services a try.

I've always been a little worried about these services since to automate the account tracking, you have to provide your login info for each bank account that you want it to track. But I decided it was better to have regular reviews of the accounts through an aggregation service.

There are several aggregation services available. This FW thread has a list of the popular ones. Yodlee appears to be the granddaddy of web-based account aggregators, and its aggregation engine powers several applications for customers like Mint.com, Fidelity and HSBC. Based on its popularity, I decided to go with Mint.com. There's a good overview of the service at Mint.com's About page, and you can review the security and privacy protections here.

I've been using Mint.com over the last 6 weeks, and it has worked well. Entering your bank login info can be time consuming. With the extra bank security these days, you not only have to enter your username and password, but also your security answers (like oldest brother's middle name). Not all accounts went through without problems. It took multiple tries for Mint.com to log into some of my bank accounts, and it couldn't work with a few, especially for the smaller banks and credit unions that weren't in its database.

Once the login info has been entered, Mint.com does in fact automate account tracking. I especially like how it sends you email on certain account activities. One Mint.com email came in very handy when one of my credit unions charged me an inactivity fee. Here's a snapshot of the email that I received (Note, I was able to get the fee waived by calling).



Another useful email notified me of an ING Direct rate change (Although I think I found out about it before the email)



Other useful notifications include low account balances and large deposits and/or debits. The weekly account summary emails are also useful.

What's your favorite account aggregation service? And what problems and useful features have you experienced?

Webster Bank is offering up to $100 for opening a checking account and with some additional requirements. Details are listed in the bank's promotions page. Three different bonuses are available for three different checking accounts:

• $25 for Totally Free Checking
• $50 for Relationship Checking ($4K minimum balance to avoid $15/mo fee)
• $100 for Premier Checking ($10K minimum balance to avoid $20/mo fee)

Offer is scheduled to end on 3/01/2010. One of the following is required to be done by 4/16/2010 to qualify for the bonus:

• One Direct Deposit (PayPal transactions are excluded), OR
• 5 Visa Check Card Signature purchases, OR
• 5 online Bill Payments

If you meet the above requirements, the bonus will be transferred into the newly-established checking account by 5/14/10. Bonus amount will be reported to the IRS.

According to the small print, the offer is limited to residents of NY, MA, RI and CT. It appears that you can open the checking account online. The first page of the application has a box for the offer code, but I don't see a code mentioned in the promotions page. Opening at a branch may be easier. Branches are located in Southern New England and Westchester County, New York. Most of its branches are located in Connecticut.

The bank has been a FDIC member since 1960 (FDIC Certificate # 18221).

Credit for this find goes to Bank Perks.

Other Bank Bonuses

Refer to the Bank Bonus tag for the other bonuses at banks and credit unions around the nation.

Park Cities Bank is offering some competitive CD rates. The following are listed in the bank's rates table as of 2/21/2010:

• 2.02% APY 12-month CD
• 2.53% APY 24-month CD with a one-time bump-up option
• 2.79% APY 36-month CD with a two-time bump-up option

These are also available in an IRA. Minimum deposit is $1,000. The bank's Bump-Up CD section describes the details of this bump-up option. The usefulness of a bump-up feature depends on the bank maintaining competitive rates on those CDs in the future. If they don't, the bump-up feature may not be useful. Nevertheless, the rates are competitive even without the bump-up option.

It appears a branch visit is required to open an account. Branches are located in Dallas and Fort Worth, Texas.

The bank's ratings for safety and soundness are a little mixed: 3½ stars (good) at BauerFinancial and 2 stars (below peer group) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 2000 (FDIC Certificate # 57057).

Flushing Bank is offering two special CDs with competitive rates: a 2.10% APY 18-month CD and a 2.25% APY 24-month CD. Minimum deposit is $5,000 ($1,000 for IRAs). A checking account is required. These specials aren't listed at the bank's website. It was advertised last week in the NY Daily News. The ad is available online here. I called their Brooklyn branch this morning, and the special was still available as of 2/21/2010. The CSR didn't know how much longer the special would last.

In addition to the CD specials, Flushing is advertising a 1.35% APY on its BestRate Checking guaranteed for 90 days after opening. $5,000 minimum balance is required to receive this APY and to avoid a $10 monthly service charge.

A branch visit is required to open an account. Branches are located in Queens, Brooklyn, Manhattan and Nassau.

What Happened to Flushing Savings Bank?

You might remember this bank as Flushing Savings Bank. The name has just been changed. The Queens Newspaper quoted the bank's president about the name change:

We thought that the term Savings Bank was much more restrictive and gave the connotation of a company that really only dealt with consumers.

The article also goes into other history of the bank. In terms of financial health, the article stated that "Flushing Bank has weathered the storm, and it had a banner year in 2009." The article also mentioned Flushing's internet bank, iGObanking.com which after 3 years has grown to $300 million in deposits. iGObanking.com offers a savings account, a checking account, CDs and IRA CDs. I just reported on its competitive 5-year CD earlier this month.

Flushings Bank's ratings for safety and soundness are above average: 4 stars (excellent) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both ratings are based on 9/30/09 data. It has been a FDIC member since 1943 (FDIC Certificate # 16049).

Hot Deals, Quick Link for Rates, Recap of this week's posts

One bit of good news for savers this week was the Fed's rate hike of the discount rate. This is not the Fed funds rate which is much more influential on consumer rates, but as this CNN commentary suggests "it may be time to salute the Fed for at least getting the rate hike wheels in motion."

The wheels may be in motion, but I'm afraid it might be a long road. On Thursday, the unexpected rise in the Producer Price Index made it look like inflation could force higher interest rates sooner than expected. However, the more important Consumer Price Index for January was released the next day, and inflation was lower than expected. Mish's Global Economic Trend blog describes why the CPI change was much more relevant to inflation than the change in the PPI.

Before yesterday we only had one bank failure in February, but that changed yesterday with four bank failures. The most significant closure was La Jolla Bank in California. The FDIC arranged for OneWest Bank to assume all deposits. This is the second sizable failed California bank that OneWest has acquired.

The other three banks that failed yesterday were small, but one bank of note was The La Coste National Bank in Texas near San Antonio. The interesting aspect of this bank was that it had a 5-star rating at BauerFinancial and a 3-star rating at Bankrate. This is highly unusual. The vast majority of banks that have failed over the last couple of years had the lowest ratings at both services. One important point about these rating services is that they depend on the quarterly FDIC data, and that latest data was released on 9/30/09. It's possible that this small bank was impacted with major issues that caused its health to nosedive in a very short time. Unfortunately, the OCC press release only had a general description of why it was forced to close the bank:

The OCC acted after finding that the bank had experienced substantial dissipation of assets and earnings due to unsafe and unsound practices. The OCC also found that the bank incurred losses that depleted its capital

Savings Account Rates

Incredible Bank reduced its checking account rate this week to 1.74% APY. It had been near the top of the liquid account list for over 3 months with a 2.02% APY. There were quite a few disappointments this week. Two former rate leaders, FNBO Direct and CNB Bank Direct, cut their rates this week putting them below average. Ally and Colorado Federal Savings Bank both cut their rates for the second time in the last two weeks.

On a positive note, I reported on two new savings accounts this week that both have very competitive rates. Southern Community Bank and Trust has an internet bank called Ready Saver that offers an online savings account that pays 2.00% APY on all balances (see review). The Palladian PrivateBank's savings account is not quite this good, but it's still competitive with a 1.70% APY (see review).

Rate Hikes:

1. Ready Saver - 2.00% (newly reported)
2. Palladian PrivateBank - 1.70% (newly reported)

Rate Cuts:

1. Incredible Bank Checking - 1.74% (was 2.02%)
2. Colorado Federal Savings Bank Savings - 1.40% (was 1.50%)
3. CNB Bank Direct Savings - 1.35% (was 1.50%)
4. Ally Bank Savings & MMA - 1.39% (was 1.44%)
5. Bank of American Fork Savings - 1.30% (was 1.35%)
6. WTDirect Savings - 1.26% (was 1.41%)
7. AIG Bank MMA - 1.26% $10K (was 1.30%)
8. FNBO Direct Savings - 1.25% (was 1.40%)
9. ING Direct Savings - 1.15% (was 1.20%)
10. Intervest National Bank MMA - 1.13% $2.5K (was 1.15%)

Certificate of Deposit Rates

America's Credit Union is no longer offering its special 7-month and 13-month CDs. Its 7-month CD had been at the top of the list. Another credit union that I removed from the short-term CD lists is Wings Credit Union. According to Wings' rate table, the 3-, 6- and 12-month CDs are for "existing certificate renewals only". This isn't a major loss since Wings has a membership primarily limited to those in the air transportation industry.

With the loss of the above CDs, there's not much choice for decent short-term CD rates. Short-term CD rates are so low that I don't see the benefit of these over savings accounts. For example, the highest rate for a 6-month CD in the list below is 1.62% APY. There are several savings accounts with rates over this. These savings account rates may fall in the next 6 months, but even if they do fall, it's unlikely you'll lose out much in only 6 months.

You can get higher rates with long-term CDs, but I understand the worries people have about rising interest rates over the next couple of years. Unfortunately, no one knows how long it'll take before we start to see higher rates. I came across a June 2008 comment in which the reader said he saw no reason to get 4.00% CDs since he thought rates would not be going down. That seemed reasonable in June 2008, but as we've seen, rates did fall substantially. This is one reason CD ladders can be useful. You don't have to guess about future rates.

The risk of long-term CDs can be minimized if the CDs have reasonable early withdrawal penalties. If rates do shoot up, you can break the CD without too much of a loss. However, there are questions about the possibility that the bank could refuse an early withdrawal or make other changes in the account disclosure before the CD matures. This issue has recently come up when Darby Direct informed its customers that it had changed the account disclosure of existing 36-month Step-Up CDs that would prohibit additional deposits after February (see post).

Below are some of the best nationwide and local CD deals that are still active.

Best Nationwide CD Deals as of 2/20/10: Also listed are savings account promos with rate guarantee periods. The full list of nationwide CD rates is farther down.

1. 2.25% 3-mo money market/checking promo at EverBank (account review)
2. 1.77% 10-mo CD at EBSB Direct (account review)
3. 2.10% 12-mo CD at Alliant CU (account review)
4. 2.00% 14-mo CD at Digital CU (account review)
5. 2.25% 15-mo CD at First City Bank (account review)
6. 2.00% 15-mo CD at Country Bank for Savings (account review)
7. 2.30% 21-mo CD at Stonebridge Bank (account review)
8. 2.02% 24-mo Add-On CD at Northwest FCU (account review)
9. 2.75% IRA-only 30-mo CD at Navy FCU - Limited Membership (account review)
10. 3.00% 36-mo CD at Pentagon FCU (may change in Feb) (account review)
11. 3.25% 48-mo CD at Pentagon FCU (may change in Feb) (account review)
12. 3.15% 48-mo CD at Hudson City Savings Bank (account review)
13. 3.65% 60-mo CD at Melrose CU (account review)
14. 3.60% 60-mo CD at Apple FCU (account review)
15. 3.55% 60-mo CD at iGObanking (account review)
16. 3.50% 60-mo CD at Pentagon FCU (may change in Feb) (account review)
17. 3.40% 60-mo CD at Hudson City Savings Bank (account review)
18. 3.15% 60-mo Small-Penalty CD at Ally Bank (account review)
19. 4.25% IRA-only 84-mo CD at Navy FCU - Limited Membership (account review)
20. 4.06% 84-mo CD (min $175K) at USAA Bank (account review)

Best Local CD Deals as of 2/20/10: Some of the best CD deals are from banks and credit unions that don't offer accounts nationwide. Refer to the recap section and the state index section to find all the recent local deals. Here are some of the best deals to note.

1. 2.30% Money Market Account (min $100K) at Georgia Primary Bank in Atlanta (account review)
2. 2.02% Money Market Account at South Florida FCU (account review)
3. 2.00% 6-mo CD at Vision Bank in Dallas (account review)
4. 2.00% 6-mo CD at United Financial Bank of Florida (account review)
5. 2.25% 12-mo CD at Workmen's Circle CU in Georgia (account review)
6. 2.22% 12-mo CD at Cornerstone Bank & Trust in IL (account review)
7. 2.06% 12-mo CD w/chk at Chartway FCU in VA, GA, RI, NC, TX, FL & NJ (account review)
8. 2.00% 12-mo CD at Premier American Bank, NA in Miami, FL (account review)
9. 2.01% 15-mo CD at Aspire FCU in NY, NJ, NH & VA (account review)
10. 2.20% 16-mo Jumbo CD at Teachers FCU in NY (account review)
11. 2.18% 18-mo CD w/chk at Greater Western Bank in AZ, CO, KS, NE, SD, IA & MO (account review)
12. 2.20% 18-mo CD & 3.20% 44-mo CD at Crescent Bank & Trust in Louisiana (account review)
13. 3.00% 24-mo CD at LOMTO FCU in NYC (account review)
14. 3.00% 26-mo/49-mo CD Combo at SunTrust Bank in FL (account review)
15. 3.35% 48-mo CD at Fidelity Bank of FL (account review)
16. 4.00% 60-mo CD at PFFCU in Philadelphia (account review)
17. 3.60% 60-mo Jumbo CD at CEFCU in CA & IL (account review)
18. 3.56% 72-mo CD at Broadway Federal Bank in Los Angeles (account review)
19. 4.25% 10-year Flex-CD at First Choice CU in Florida (account review)

Reward Checking Accounts

I reported on three new reward checking accounts this week with yields from 2% to 3.55% APY. The 2% APY is low for reward checking, but it's good for balances up to $500K. This account is being offered by Republic Bank and is available in parts of OH, KY, IN and FL. It's getting harder to find reward checking accounts with large balance caps. The other reward checking account that I reported on this week is offering 2.75% APY on balances up to $250K, but just two days after my post, a reader reported being notified by the bank that the rate is being slashed in March.

To find reward checking accounts with large balance caps, refer to the reward checking section of DepositAccounts. At the top of the table, click twice on the Max title. This will sort the table based on the balance cap. The N/A indicates that there is no maximum balance and the entire balance can qualify for the top rate.

If you just want the highest rate from a reward checking account, you can still get around 4% APY on balances up to $25K for nationwide reward checking accounts. I reviewed a few of these that have maintained competitive rates for over two years in this Monday post. Unfortunately, a couple of them have lowered their balance caps below $25K. This can be as bad as lowering the rate.

To see all of the high yield reward checking accounts available throughout the nation, please refer to the reward checking section of DepositAccounts.com.

Don't Forget to Check the Notices Section

As I mentioned before, lots of my posts are now in the Notices Section. Notices are very short posts that are intended to alert you to rate changes or point you to some interesting banking news or deals on the web. This allows me to post more often on news and deals. I'll continue the blog posts in the same format that you're used to. You can get to the Notices Section from the top menu. You can also see the recent Notices on the front page. Just select the Notices tab which is next to the Blog Posts tab. If you want to subscribe to both blog posts and Notices, just click on the RSS icon at the top of either the Blog or Notices section.

Recap for the Week - Links to This Week's Posts

Banking News

• Darby Direct Ending the Add-On Deposit Feature of Its Existing 36-Month Step-Up CDs
• Four Bank Fail Including La Jolla Bank, FSB in California
• Hard Credit Pulls and Deposit Account Applications
• Fed Raises Discount Rate - Impact to Deposit Rates?
• FOMC Minutes, Unemployment and Future Interest Rates
• Reminder about FDIC Deposit Insurance Coverage

CD Deals - National

• Review of AmTrust Direct's Internet CDs - Available Nationwide
• Competitive 12-Month CD and Savings Account Rates at Palladian Private Bank - Available Nationwide

Savings/Checking Accounts - Nationwide

• ING Direct Raises Refer-a-Friend Promo as It Cuts Rates
• New High-Yield Online Savings Account at Ready Saver - Nationwide Except for NC

Checking/Savings Bonuses

• PerkStreet Financial's 2% Cash-Back Debit Card Promotion - Available Nationwide
• $100 Checking Account Bonus at Huntington Bank - No DD Required
• $150 Checking Account Bonus at SunTrust - No DD Required - Available Nationwide

Reward Checking Accounts

• 3.55% Reward Checking Account at Catholic & Community Credit Union in IL - Local Only
• High-Cap Reward Checking Account at Republic Bank in Parts of OH, KY, IN & FL - Local Only
• Allegiance Bank's High-Cap Reward Checking Account Available Online for PA, NJ & DE Residents
• Five Top Reward Checking Accounts That Are Over Two Years Old

CD and Money Market Deals - Local

• 2.00% 13-Month Penalty-Free CD at Community Bank of Tri-County in Maryland - Local Only
• Competitive Long-Term CD & Savings Account Available Online at River Bank - MA & NH Only
• 3.00% 24-Month CD Special at LOMTO Federal Credit Union in NYC - Local Only
• 2.00% 12-Month CD and 1.75% Money Market Specials at Pacific Global Bank in Chicago - Local Only
• 2.25% 13-Month CD & 2.20% 18-Month CD at Greer State Bank in SC - Local Only
• 2.00% 12-Month CD at Valliance Bank in Texas - Local Only
• 3.25% 49-Month IRA CD at Spencer Savings Bank in Northern NJ - Local Only
• 2.00% 12-Month CD Special at AEA Federal Credit Union in AZ - Local Only
• 2.15% 13-Month CD One-Day Special at Service Credit Union - EXPIRED
• 3.00% 26-Month/49-Month CD at SunTrust in Florida
• 2.22% 22-Month CD at United Western Bank in Colorado - Local Only

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. The top lists include banks and credit unions with broad availability and with minimums under $100,000. Previous weekly summaries are available at this page. Quick Links: Refer to the following links for the savings accounts and CDs that interest you: Liquid Account Rates: Savings Accounts, Reward Checking, Bank alternatives CD Rates: 3 Mo CDs, 6 Mo CDs, 9 Mo CDs, 12 Mo CDs, 18 Mo CDs, 24 Mo CDs, 36 Mo CDs, 48 Mo CDs, 60 Mo CDs, 84 Mo CDs, CDs by state Comments: read and discuss

As of February 20, 2010

Checking/Savings/Money Market Accounts:

• Best Reward Checking Account Rates (Nationwide & by State)
• Best Savings Account Rates (Nationwide & by State)
• Best Money Market Rates (Nationwide & by State)
• Best Checking Account Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• EverBank - 2.25% ($5K min), 3 mo promo rate up to $50K (1.26% stnd) account review
• SmartyPig - 2.01% (min $25) withdrawal restrictions, account review
• Alliant Credit Union - 2.00% (min $100), account review
• Redneck/AmericaNet/Evantage Bank - 2.00% (up to $35K, 1% over) account review
• Ready Saver - 2.00% (NC state excluded) account review
• SFGI Direct - 1.85% ($25 min), NOT accepting new customers, account review
• Alliant Credit Union - 1.75% Checking, required direct deposit, account review
• Incredible Bank - 1.74% Checking ($1K min) account review
• Palladian PrivateBank - 1.70% (min $10K) account review
• EBSB Direct - 1.67% (min $50K) account review
• Newtown Savings Bank - 1.60%, account review
• Peoples Bank - 1.60% ($10K min) account review
• Wings Financial CU - 1.56% MMA ($5K min) Limited Membership, account review
• UFB Direct - 1.55%, account review
• Clear Sky Accounts - 1.55% account review
• Bank of Internet - 1.50% (min $100) account review
• American Express Bank - 1.50%, account review
• Connexus CU - 1.50% MMA (min $20K) (2.00% $100K+) account review
• Danversbank - 1.50% account review
• ProvidentNJ Direct - 1.50% (min $10K) account review
• Bank of America - 1.50% MMA ($10K min), guaranteed to 4/2010, account review
• First Trade Union Bank - 1.50% ($2.5K min) account review
• Capital One/Costco - 1.50% InterestPlus Savings ($5K min) quarterly bonuses for $15K+, account review
• Bank of Internet - 1.45% MMA (min $100) account review
• Nationwide Bank - 1.45% MMA (min $1K) account review
• Capital One - 1.45% InterestPlus Savings ($2.5K min) quarterly bonuses for $15K+, account review
• Savings Square - 1.45%, account review
• DollarSavingsDirect - 1.40% ($1K min) account review
• Bank of Internet - 1.40% Advantage Savings (min $100) account review
• ADB Bank - 1.40% account review
• Delta Community CU - 1.40% MMA (min $25K) 1.65% $100K+, account review
• Hudson City - 1.40% (min $2.5K) account review
• Grand Yield Direct - 1.40% (min $2.5K) account review
• Colorado Federal Savings Bank - 1.40% ($2.5K min) account review
• Ally Bank - 1.39% MMA account review
• Ally Bank - 1.39% Savings account review
• CapitalOne/Costco - 1.35% MMA (min $1K, Costco members only, $60 deal for exec. members)
• Discover Bank - 1.35% Savings (min $500) account review
• CNB Bank Direct - 1.35% account review
• iGObanking - 1.31%, account review
• Bank of American Fork - 1.30% (min $1K) account review
• Choice Financial - 1.26% (min $5K), (1.51% $25K+, 1.61% $100K) account review
• AIG Bank - 1.26% MMA (min $10K) account review
• WTDirect - 1.26% ($10K min), account review
• Salem Five Direct - 1.25% Savings, account review
• OneWest Bank - 1.25% (min $1K) account review
• Wilshire State Bank - 1.25%, chk required (min $500) account review
• Bank Provident Online - 1.25% (min $10) account review
• Presidential Bank - 1.25% (min $5K, 0.75% over $35K), account review
• UnivestDirect - 1.25%, (0.25% checking), account review
• Zions Bank - 1.25% MMA, outside of Utah, (min $2.5K) account review
• FNCB Bank - 1.25% (min $100) account review
• 1st Constitution Direct - 1.25% (min $100), 3 mo promo (1.25% $10K+ stnd) account review
• FNBO Direct - 1.25%, account review
• United Central Bank - 1.21% MMA (min $5K) (1.35% $75K-$150K) account review
• HSBC Advance - 1.20% account review
• State Farm Bank - 1.15% Checking (min $2.5K) account review
• Union Federal Savings - 1.15% account review
• Capital One - 1.15% MMA, account review
• ING Direct - 1.15%, (0.25% checking), post ($25 bonus)
• Intervest National Bank - 1.13% MMA (min $2.5K) account review
• EmigrantDirect - 1.10%, account review
• E-LOAN - 1.10% Savings Plus (min $10K) other requirements, account review
• Discover Bank - 1.00% MMA (min $2.5K) (1.40% $10K-$100K, 1.50% $100K+) account review

3-Month Certificates of Deposit:

• Best 3-Month CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Danversbank - 1.75% (4 mo) (min $500) account review
• TotalBank - 1.10% (min $1K) account review
• Southeast Financial FCU - 1.10% (min $500) account review
• Palladian PrivateBank - 1.00% (min $10K) account review
• MetLife Bank - 1.00% (min $25K) account review
• UFB Direct - 0.75% (min $8K)

6-Month Certificates of Deposit:

• Best 6-Month CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Northrop Grumman FCU - 1.62% (min $40K), account review
• Country Bank for Savings - 1.60% (min $500) account review
• Southeast Financial FCU - 1.60% (min $500) account review
• Connexus CU - 1.50% (min $500) account review
• Jacksonville Bank - 1.40% (min $1K) account review
• Palladian PrivateBank - 1.40% (min $10K) account review
• State Bank of India - 1.36% (min $5K) account review
• UFB Direct - 1.33% (min $8K)
• Excel National Bank - 1.31% (min $10K) account review
• Ascencia Bank - 1.25% (min $500), account review
• Century Bank Direct - 1.25% (5 mo) (min $1K) account review
• Ally Bank - 1.24% (min $0) account review
• Colorado Federal Savings Bank - 1.20% ($5K min) account review
• MetLife Bank - 1.10% (min $25K) account review
• ING Direct - 1.00%, account review

9-Month Certificates of Deposit:

• EBSB Direct - 1.77% (10-mo) (min $1K) account review
• AmTrust Direct - 1.55% (min $1K) account review
• Century Bank Direct - 1.50% (10 mo) (min $1K) account review
• OneWest Bank - 1.45% (min $5K) account review
• Doral Bank Direct - 1.40% (min $1K) account review
• Acacia Federal Savings Bank - 1.35% (min $500) account review
• NewDominion Bank - 1.31% (min $3K) account review
• MetLife Bank - 1.20% (min $25K) account review
• Ally Bank - 1.09% (min $0) No-Penalty, account review

12-Month Certificates of Deposit:

• Best One-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• First City Bank - 2.25% (15-mo) (min $5K) account review
• Alliant Credit Union - 2.10% (min $25K) account review
• Melrose CU - 2.07% (min $5K) account review
• Digital CU - 2.00% (14-mo) (min $500) account review
• Southeast Financial FCU - 2.00% (min $500) account review
• Country Bank for Savings - 2.00% (15-mo) (min $500) account review
• Academy Bank - 1.90% (min $500) account review
• Franklin Synergy Bank - 1.90% (min $1K) account review
• Golf Savings Bank - 1.90% (15-mo) (min $10K) account review
• Palladian PrivateBank - 1.90% (min $10K) account review
• Northrop Grumman FCU - 1.86% (min $40K), account review
• Choice Financial - 1.85% (13 mo) (min $5K) add-on feature, account review
• Self-Help CU - 1.82% (min $500) account review
• Delta Community CU - 1.80% (min $1K) account review
• Connexus CU - 1.75% (min $500) account review
• BankUnited - 1.75% (min $5K) account review
• USAA Bank - 1.75% (15-mo) (min $1K) (2.06% $175K min) account review
• Century Bank Direct - 1.70% (15-mo) (min $1K) account review
• Acacia Federal Savings Bank - 1.70% (min $500) account review
• Discover Bank - 1.70% (min $2.5K) account review
• AmTrust Direct - 1.70% (min $1K) account review
• UFB Direct - 1.69% (min $8K)
• NewDominion Bank - 1.67% (min $3K) account review
• State Bank of India - 1.66% (min $5K) account review
• Jacksonville Bank - 1.65% (min $1K) account review
• Ally Bank - 1.60% (min $0) account review
• Colorado Federal Savings Bank - 1.55% ($5K min) account review
• Northwest FCU - 1.52% (min $500) add-on, account review
• Ascencia Bank - 1.50% (min $500), account review
• Geauga Savings Bank - 1.45% (min $1K) account review
• Wilshire State Bank - 1.40% (min $10K), liquid features, account review
• Bank of Internet - 1.40% (min $1K) account review
• Fifth Third - 1.35% (13-mo) (min $5K) not all states, account review
• HSBC Advance - 1.25% (min $10) account review
• Consumers CU - 1.25% (15-mo) (min $250) (1.50% $100K+) account review
• ING Direct - 1.25% (min $1) account review
• Amboy Direct - 1.10% Add-On (min $10K) account review

18-Month Certificates of Deposit:

• Best 18-Month CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Citibank - 4.07% (min $200) (max $5K) requires secured credit card, account review
• Stonebridge Bank - 2.30% (21-mo) (min $500) account review
• Southeast Financial FCU - 2.11% (min $500) account review
• Alliant Credit Union - 2.10% (min $25K) account review
• Pacific Mercantile Bank - 2.02% IRA-only (min $7.5K) account review
• AmTrust Direct - 1.95% (min $1K) account review
• Century Bank Direct - 1.90% (20 mo) (min $1K) account review
• Academy Bank - 1.90% (min $500) account review
• Discover Bank - 1.80% (min $2.5K), account review
• NewDominion Bank - 1.76% (min $3K) account review
• Ally Bank - 1.73% (min $0) account review
• DollarSavingsDirect - 1.65% (16-mo) (min $1K) verified by phone on 2/20 account review
• Nationwide Bank - 1.65% (min $500) account review
• Colorado Federal Savings Bank - 1.65% ($5K min) account review

24-Month Certificates of Deposit:

• Best Two-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Wings Financial CU - 2.52% (min $500) Limited Membership, account review
• Melrose CU - 2.32% (min $5K) account review
• Hudson City Bank - 2.30% (min $5K) account review
• Atlantic Coast Bank - 2.30% account review
• Southeast Financial FCU - 2.25% (min $500) account review
• Gateway Regional CU - 2.25% (min $1K) restrictions to membership, account review
• America's CU - 2.25% (29 mo) (min $500) account review
• Country Bank for Savings - 2.25% (min $500) account review
• Golf Savings Bank - 2.20% (min $10K) account review
• Discover Bank - 2.15% (min $2.5K) account review
• AmTrust Direct - 2.15% (min $1K) account review
• Northrop Grumman FCU - 2.12% (min $40K), account review
• State Bank of India - 2.12% (min $5K) account review
• NewDominion Bank - 2.11% (min $3K) account review
• Tennessee Commerce Bank - 2.10% (min $5K) account review
• Main Street Bank - 2.10% (min $10K) account review
• Jacksonville Bank - 2.10% (min $1K) account review
• Northpointe Bank - 2.07% (min $5K) account review
• Self-Help CU - 2.07% (min $500) account review
• ISN Bank - 2.06% (min $1K) account review
• USAA Bank - 2.05% (min $1K) (2.36% $175K min) account review
• AIG Bank - 2.05% (min $2.5K) account review
• Ally Bank - 2.04% (min $0) Bump-Up, account review
• Northwest FCU - 2.02% (min $500) add-on, account review
• Broadway Federal Bank - 2.02% (min $1K) account review
• American Express Bank - 2.00% (min $0) account review
• Equity Bank - 1.99% (min $1K) account review

36-Month Certificate of Deposit:

• Best 3-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Wings Financial CU - 3.03% (min $500) Limited Membership, account review
• Pentagon Federal CU - 3.00% (min $1K), account review
• Melrose CU - 2.83% (min $5K) account review
• Hudson City Bank - 2.80% (min $5K) account review
• BankUnited - 2.75% (min $5K) account review
• EBSB Direct - 2.75% (min $1K) account review
• Atlantic Coast Bank - 2.70% account review
• Acacia Federal Savings Bank - 2.65% (min $500) account review
• Alliant Credit Union - 2.60% (min $25K) account review
• iGobanking - 2.60% (min $500), account review
• Air Force FCU - 2.55% (min $25K) membership restrictions account review
• NewDominion Bank - 2.51% (min $3K) account review
• Northrop Grumman FCU - 2.50% (min $40K), account review
• Agriculture FCU - 2.50% (min $1K) account review
• Discover Bank - 2.50% (min $2.5K) account review
• Ally Bank - 2.49% (min $0) account review
• State Bank of India - 2.47% (min $5K) account review
• Nationwide Bank - 2.40% (min $500) account review
• Jacksonville Bank - 2.40% (min $1K) account review

48-Month Certificate of Deposit:

• Best 4-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Pentagon Federal CU - 3.25% (min $1K), account review
• Hudson City Bank - 3.15% (min $5K) account review
• Wings Financial CU - 3.14% (min $500) Limited Membership, account review
• Alliant Credit Union - 3.10% (min $25K) account review
• Melrose CU - 3.09% (min $5K) account review
• National Bank of KC - 3.03% (min $10K) account review
• Acacia Federal Savings Bank - 3.00% (min $500) account review
• BankUnited - 3.00% (min $5K) account review
• Apple FCU - 3.00% (min $500) account review
• Gateway Regional CU - 2.80% (min $1K) restrictions to membership, account review
• Third Federal - 2.75% (min $500) account review
• USAA Bank - 2.75% (min $1K) (3.06% $175K min) account review
• Ally Bank - 2.74% (min $0) account review
• Discover Bank - 2.65% (min $2.5K) account review
• Capital One - 2.50% (min $5K) account review

60-Month Certificate of Deposit:

• Best 5-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Melrose CU - 3.65% (min $5K) account review
• Apple FCU - 3.60% (min $50K) account review
• iGobanking - 3.55% (min $500), account review
• Pentagon Federal CU - 3.50% (min $1K), account review
• EverBank - 3.41% ($1.5K min) account review
• Hudson City Bank - 3.40% (min $5K) account review
• Wings Financial CU - 3.39% (min $500) Limited Membership, account review
• US Bank - 3.35% (59 mo) (min $1K) account review
• Northwest FCU - 3.30% (min $25K) account review
• Agriculture FCU - 3.30% (min $1K), account review
• OneWest Bank - 3.30% (min $5K) account review
• Acacia Federal Savings Bank - 3.30% (min $500) account review
• Dime Savings Bank - 3.25% (min $500) account review
• BankUnited - 3.25% (min $5K) account review
• Connexus CU - 3.25% (min $1K) account review
• State Bank of India - 3.24% (min $5K) account review
• Mountain America CU - 3.20% (min $1K) account review
• Discover Bank - 3.20% (min $2.5K) account review
• Ally Bank - 3.15% (min $0) account review
• USAA Bank - 3.15% (min $1K) (3.46% $175K min) account review
• Intervest - 3.12% (min $2.5K), account review
• Gateway Regional CU - 3.05% (min $1K) restrictions to membership, account review
• Capital One/Costco - 3.05% (min $5K) account review
• Patelco CU - 3.04% ($1K min), account review
• Chase Bank - 3.00% (min $10K)
• Capital One - 3.00% (min $5K) account review

84-Month Certificate of Deposit:

• Navy FCU - 4.25% IRA-only ($20K min) restrictions to membership, account review
• Navy FCU - 4.00% ($20K min) restrictions to membership, account review
• Pentagon Federal CU - 3.75% (min $1K), account review
• Apple FCU - 3.75% (min $50K) (4.00% 10yr) account review
• USAA Bank - 3.75% (min $1K) (4.06% $175K min) account review
• Bank of America DOW - 3.61% (10-yr) (min $1K) account review
• Discover Bank - 3.40% (min $2.5K) (3.70% 10yr) account review
• Capital One/Costco - 3.30% (min $5K) account review
• Capital One - 3.25% (min $5K) account review
• Third Federal - 3.25% (6-yr) (min $500) account review
• Intervest - 3.22% (min $2.5K), account review

Various Deposit Account Deals

• Checking/Savings Account Bonuses
• Best IRA CD rates, local and nationwide deals
• Latest CD and Savings Account Deals with No Major Deposit Limitiations

High Yield Reward Checking Accounts - Open to All

• Reward Checking Accounts Available Nationwide

Recent CD Specials at Local Credit Unions and Banks

• Best Deals and CD Rates by State

Bank Account Alternatives

• GE Interest Plus - 1.90% rate for $50k+
• Vanguard Tax-Exempt Money Market Fund - 0.11% 7-day yield
• Paypal Money Market Fund - 0.05% 7-day yield (1% cashback debit MasterCard)
• Fidelity Money Market Fund - 0.01% 7-day yield (reviews on Fatwallet)
• Vanguard Prime Money Market Fund - 0.02% 7-day yield
• Fidelity Municipal Money Market Fund - 0.01% 7-day yield
• TIAA-CREF Money Market Fund - 0.00% 7-day yield
• FW Thread on Treasury Bills
• I Bonds for 2009, I Bond Article, I Bonds as CD Alternatives

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

Edit 2/22/2010: Citi's 18mo secured MasterCard CD is now limited to just $5K (down from $25K)

AmTrust Direct is now part of New York Community Bank. AmTrust Bank failed on December 2009 and New York Community Bank assumed all deposits. It's common for acquiring banks to have some deposit deals at the failed bank branches (physical and virtual branches) to keep depositors.

AmTrust Direct doesn't have great deals, but it does offer some competitive CD rates as of 2/20/2010. These include:

• 1.55% APY 9 month
• 1.70% APY 12 month
• 1.95% APY 18 month
• 2.15% APY 24 month

Since I haven't done a review of AmTrust Direct since its failure, I thought it was a time for a new review. I looked at AmTrust Direct's FAQs and called the bank today for some additional details. Here are some important CD features:

• Harsh early withdrawal penalties (worse than it used to be): 1) CD terms under 18 months: All interest that would be earned for the entire term 2) CD terms over 18 months: 18 months of interest. FAQ is here, and I received clarification from the CSR.
• Only a soft credit inquiry for CD applications (per CSR).
• Rate locks at the time of the application. You have 15 days for them to receive the funds (per CSR)
• You can fund the CD with an ACH transfer or by mailing in a check (wire transfer is not an option for new customers per CSR)
• When the CD matures, you can close the CD by phone or by sending a secure message and instruct them to mail check, deposit into another AmTrust account, or wire funds to another institution (fee applies) (per FAQ)

AmTrust Direct also offers savings accounts but the rates are nothing to get excited about. Before the failure, AmTrust Direct made it a practice to create new savings accounts with teaser rates while the rates on the old accounts went way down. I hope New York Community Bank changes this tactic.

It should also be noted that New York Community Bank also has its own internet bank at MyBankingDirect.com which has been around for more than four years. They offer a money market account and a couple of CDs with odd terms. I haven't covered this bank much in the last couple of years since its rates have been a little low.

New York Community Bank's ratings for safety and soundness are above average: 4 stars (excellent) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both ratings are based on 9/30/09 financial data. It's a large bank with $12.9 billion in deposits. The bank has been a FDIC member since 1943 (FDIC Certificate # 16022).

Are CDs a Good Idea Now?

I was reviewing the comments of my 2008 AmTrustDirect CD posts, and I came across this June 2008 comment in which the reader gave his opinion about the 4.00% 12-month+ CDs:

In my opinion this is not the time to get in long term cd's. With M/M and savings accounts paying 3.50 to 3.75% I see no reason to get in 4% cd's unless you think rates are going down which I don't.

I just wanted to point out how difficult it is to predict future interest rates. That's one reason to use CD ladders so you don't have to try to guess about future interest rates.

Yesterday afternoon readers reported receiving an email from Darby Direct informing them that they would no longer be able to make additional deposits to their 36-month Step Up CD after February 28, 2010. Here's an excerpt from the email:

As a valued customer, we would like to inform you about changes to your Darby Direct 36 Month Step Up CD. The last day to make additional deposits to your 36 Month Step Up CD is Sunday, February 28th. Following this date, no additional deposits can be made. For account disclosure information, please click here.

This brings up an important issue with CDs. Can a bank unilaterally change the account disclosure during the term of a CD? This appears to be what happened at Darby Direct. If you refer to the new account disclosure from the link above, it states the following:

[X] You may only make deposits into your account___until February 28, 2010

However, a reader made a copy of the original disclosure when he opened the CD in 2009, and this line was checked "You may only make unlimited deposits into your account" but the rest of the line was blank. There was no "until February 28, 2010". Also, there was an additional line that appeared as follows: "[X] You may make unlimited deposits into your account."

This is not only an important issue for those with this Darby Direct CD, it's also an important issue for anyone with a CD. There are many other important provisions in a CD account disclosure besides rates and maturity. Most CDs don't have add-on features, however, most allow early withdrawal with a penalty. Can a bank refuse to allow an early withdrawal even if there's no mention of that refusal right in the account disclosure? Can a bank increase the early withdrawal penalty? With the risk of interest rates shooting up in the next few years, this is a major concern for all those considering long-term CDs.

I do not know the laws for these issues and what the legal recourse might be. I found some relevant but general information from the OCC site helpwithmybank.gov. One of the Q&As of the site mentioned CD account disclosures:

Interest rates have gone up, but the bank refuses to raise the rate on my time certificate of deposit (CD). Why?

When you buy a CD, you enter into a contract involving a fixed amount of money (principal) for a predetermined period of time (the term) and an agreed-upon interest rate and yield. The bank is simply honoring the terms of the contract; it is not obligated to change those terms when interest rates change.

Please refer to the Account Agreement you received when you bought the CD for the terms and conditions of the account.

It appears the OCC is implying that the CD account disclosure is a contract which must be honored by both the bank and the account holder. It's important to note that the OCC is not the primary regulator for Darby Bank. According to the FDIC, Darby's primary federal regulator is the FDIC.

Another issue with Darby Bank is that it's not in the best financial health. It has been operating under this FDIC Consent Order (pdf) since December 18, 2009. In the order there are restrictions to brokered deposits and deposit yields. The order also has names of Georgia and FDIC regulators who may be another point of contact if Darby refuses to honor the original account disclosure.

There have been past cases in which banks and credit unions have changed their additional-deposit policies during a term of a CD. I don't know if the CD holders had any success in forcing the institutions to honor the original account disclosures. Last year a commenter mentioned that Vineyard Bank reneged on the add-on provisions of certain of its CDs. The bank was in bad financial shape, and it was seized by regulators. Another example was at United Services Credit Union in 2006. Readers reported that the credit union reneged on the terms of its flex CD.

Update 2/25/10: The reader BestCashCow reported the following in the Open Discussions Thread:

Regarding Darby - I have spoken to the FDIC about this type of issue. According to the FDIC, Darby can't change the terms of the initial disclosure unless they specify in the disclosure that it is subject to change. They also need to state that near the term they plan to change. So, they can't say the CD allows unlimited deposits on page 2 and then say this is subject to change on page 5. I don't see that anywhere in the amended agreement. I don't have the initial PDF but if there is no "subject to change" language then Darby shouldn't have altered the agreement. I'd contact the FDIC. the Fed or your local banking commission.

La Jolla Bank in California was the largest bank to fail today. They had offered accounts nationwide, and I've long included them in my weekly rate summaries. It was interesting to see OneWest Bank assume all deposits of La Jolla. In December OneWest assumed all deposits from the 39-branch First Federal Bank of California.

The other three banks that failed were much smaller with two of them being tiny. One of these tiny banks was The La Coste National Bank based in Texas, and there is something very interesting to note about this failure. Before the failure, BauerFinancial had given the bank a 5-star rating (highest) and Bankrate.com had given it a 3-star rating (performing). These are the highest ratings I can remember for a failed bank. The problem could be due to the fact that the ratings are based on 9/30/09 data. The bank's financial health may have started to nosedive soon after this date.

For all four closures, the FDIC was able to find buyers which assumed all deposits. The main concern will be for those who had CDs with one of these banks. The assuming banks are free to change rates on existing CDs.

Below is a summary of today's bank failures:

17th Bank Failure of 2010 (3rd in FL)

• FDIC Press Release
• Closed Bank: Marco Community Bank, Marco Island, FL
• Size: 1 branch, $119.6 in assets, $117.1 million in deposits
• Possible Uninsured Deposits: all deposit accounts, excluding the Cede & Co. brokered deposits have been transferred
• Acquiring Bank: Mutual of Omaha Bank, Omaha, NE
• Rate Changes: Mutual of Omaha Bank will review rates
• Estimated Cost to Deposit Insurance Fund: $38.1 million
• Enforcement Action: Federal Reserve 8/14/07 Written Agreement, 2/2/10 Prompt Corrective Action
• Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

18th Bank Failure of 2010 (1st in TX)

• FDIC Press Release, OCC Press Release
• Closed Bank: The La Coste National Bank, La Coste, TX
• Size: 1 branch, $53.9 million in assets, $49.3 million in deposits
• Possible Uninsured Deposits: All deposits transferred
• Acquiring Bank: Community National Bank, Hondo, TX
• Rate Changes: Community National Bank will review rates
• Estimated Cost to Deposit Insurance Fund: $3.7 million
• Enforcement Action: None
• Financial Ratings: 3 star (performing) at Bankrate.com, 5 stars (superior) at BauerFinancial

19th Bank Failure of 2010 (2nd in IL)

• FDIC Press Release
• Closed Bank: George Washington Savings Bank, Orland Park, IL
• Size: 4 branches, $412.8 million in assets, $397.0 million in deposits
• Possible Uninsured Deposits: All deposits transferred
• Acquiring Bank: FirstMerit Bank, N.A., Akron, OH
• Rate Changes: FirstMerit Bank, N.A. will review rates
• Estimated Cost to Deposit Insurance Fund: $141.4 million
• Enforcement Action: None
• Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

20th Bank Failure of 2010 (2nd in CA)

• FDIC Press Release, OTS Press Release
• Closed Bank: La Jolla Bank, FSB, La Jolla, CA
• Size: 10 branches, $3.6 billion in assets, $2.8 billion in deposits
• Possible Uninsured Deposits: All deposits transferred
• Acquiring Bank: OneWest Bank, FSB, Pasadena, CA
• Rate Changes: OneWest Bank, FSB will review rates
• Estimated Cost to Deposit Insurance Fund: $882.3 million
• Enforcement Action: OTS 9/9/09 Cease & Desist order
• Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

The above BauerFinancial and Bankrate ratings are based on 9/30/09 data.

References:

• FDIC list of failed banks
• Latest FDIC info on deposit insurance
• Last 20 of my bank failure posts
• Review of the 2009 bank and credit union failures
• 10 Lessons from the 2008 bank failures
• Review of the 2008 credit union liquidations

In many of my bank account reviews I often will mention if there's a hard credit inquiry in the application process. Hard credit inquires (also known as hard pulls) can temporarily ding your credit score. There's also a soft credit pull which does not affect your credit score.

It would seem we should only have to worry about hard pulls if we apply for credit cards or loans. However, many banks will do a hard pull when you apply for checking and savings accounts. Why? ING Direct does a hard credit pull only when you apply for the Electric Orange account which includes overdraft line of credit. Hard pulls when you apply for checking accounts (which often includes overdraft protection) are more common than when you apply for savings accounts or CDs. Other than overdraft line of credit issue, some banks have claimed the hard credit pull is just part of their process of ID checking. I've also heard suspicions from readers who claim it helps the bank cross market other products to you. Any other ideas why it's done?

Since hard pulls are done when we apply for some bank accounts, it's important to understand how hard pulls affect us. This Bankrate.com article provides some useful insights. The article describes some of the differences between soft and hard pull. In addition to the difference between their impact to your credit score, the article states that "When you pull your credit report, you can see both hard and soft pulls. Creditors can only view hard inquiries." According to the article, "Inquiries not related to a new financial commitment won't hurt your credit score." I'm not sure if this is 100% true since opening a deposit account shouldn't be considered adding a new financial commitment (except maybe related to a checking overdraft line of credit).

The article also describes how much a hard pull will cost your credit score. According to the article, it's from 1 to 5 points. It can vary based on your credit history. And about how long the impact lasts, the article states, "Hard inquiries stay on credit reports for two years, but the length of time they impact the score depends on the scoring model used."

One tip the article provides is about how to reduce the impact of hard pulls by grouping them in a short period. According to the article, "Multiple inquiries generated when rate-shopping for a mortgage, auto or student loan are consolidated by credit scoring models when done within a certain window of time." I'm not sure if this is also true for hard pulls associated when you're opening deposit accounts. But if you are going to open several deposit accounts, it probably can't hurt to open them up within a few days rather than within a few months. In addition to hard pulls, there's also the issue of ChexSystem inquiries. Some banks will reject your application if you had too many recent ChexSystem inquiries. I'm not sure if grouping your applications could also help with this issue. If you have experience with this issue, please leave a comment.

As I mentioned yesterday in a Notice, ING Direct did an across-the-board rate cut. The Orange Savings Account rate is now 1.15% APY (getting close to a puny 1%). On the plus side, they just raised the amount on their refer-a-friend promo. If you refer a new customer, ING Direct will pay you $20 instead of $10 through 3/31/2010. The full details are described at ING Direct's website. Unfortunately, the low rates makes it more difficult to refer friends and family. But if you don't have much savings, the value of the promos is higher than the value of the interest rates.

There's a new $50 Electric Orange promotion that's the same as what I described in my January ING Direct review. The new offer code is EM428. Credit for this find goes to Bargaineering.

ING Direct also has a $100 business savings account bonus. This was mentioned in this FW thread. Offer is scheduled to end on 2/28/10.

The Fed raised the discount rate from 0.50% to 0.75% today. It's important to note that this is the discount rate and not the federal funds rate. Here are excerpts from the Fed's press release

The Federal Reserve Board on Thursday announced that in light of continued improvement in financial market conditions it had unanimously approved several modifications to the terms of its discount window lending programs.
[....]
The changes to the discount window facilities include Board approval of requests by the boards of directors of the 12 Federal Reserve Banks to increase the primary credit rate (generally referred to as the discount rate) from 1/2 percent to 3/4 percent.

Note, the Fed funds rate is still stuck at the 0% to 0.25% range, and that's the key rate that has the most influence on bank rates. As I mentioned today, the Fed continues to say to expect the Fed funds rate to be exceptionally low for an extended period.

Elizabeth Dukes, a voting member of the FOMC, gave a speech today that has a good explanation of the discount rate and how it's different than the federal funds rate. Here's a relevant excerpt from her speech

As I mentioned earlier, the discount rate is the rate we charge banks that borrow at our discount window. It is not the rate we target for monetary policy purposes. I'd emphasize that the changes are simply a reversal of the spread reduction we made to combat stigma and like the closure of a number of extraordinary credit programs earlier this month, represent further normalization of the Federal Reserve's lending facilities; they do not signal any change in the outlook for monetary policy and are not expected to lead to tighter financial conditions for households and businesses.

I had actually reported on rumors that the Fed would soon be hiking the discount rate in this Tuesday Notice. Today's hike was a small surprise in that the rate hike happened this soon. Fox Business reported that analysts had expected the rate hike next month. The markets appear to be surprised by this move, and thus we're seeing a strengthening dollar and higher Treasury yields. This may be a sign that interest rates will rise sooner than what had recently been expected.

There was also news today of higher than expected producer price index, but according to this MarketWatch article, the PPI is much less important than the consumer price index as a measure of inflation.

Update 2/19/10: The CPI was just released this morning, and the news is not good for those hoping for higher interest rates. According to MarketWatch

U.S. core consumer prices fell a seasonally adjusted 0.1% in January, the first decline since 1982, the Labor Department estimated Friday. [...] Inflation was weaker than expected by economists surveyed by MarketWatch.

The Fed released the January FOMC meeting minutes yesterday. One thing I found interesting was the objection raised by Thomas Hoenig, president of the Federal Reserve Bank of Kansas City. Hoenig wanted to replace the wording of expectations that the federal funds rate would remain "exceptionally low for an extended period" to "low for some time". The details of his reasoning are described in the minutes:

Mr. Hoenig dissented because he believed it was no longer advisable to indicate that economic and financial conditions were likely to "warrant exceptionally low levels of the federal funds rate for an extended period." In recent months, economic and financial conditions improved steadily, and Mr. Hoenig was concerned that, under these improving conditions, maintaining short-term interest rates near zero for an extended period of time would lay the groundwork for future financial imbalances and risk an increase in inflation expectations. Accordingly, Mr. Hoenig believed that it would be more appropriate for the Committee to express an expectation that the federal funds rate would be low for some time--rather than exceptionally low for an extended period. Such a change in communication would provide the Committee flexibility to begin raising rates modestly. He further believed that moving to a modestly higher federal funds rate soon would lower the risks of longer-run imbalances and an increase in long-run inflation expectations, while continuing to provide needed support to the economic recovery.

This seems quite reasonable to me. Unfortunately, Hoenig was the only one of the committee members to vote against the policy action. The other members may be more concerned that higher rates will hurt the economic recovery which is still fragile as unemployment remains high. High unemployment is not expected to improve much in the near term. From the minutes:

A moderate pace of expansion would imply slow improvement in the labor market this year, with unemployment declining only gradually.

News this morning on unemployment didn't ease concerns. Bloomberg reported:

The number of Americans filing first-time claims for unemployment insurance unexpectedly increased last week, pointing to an uneven recovery in the labor market.

The CalculatedRisk Blog has shown how past federal funds rate hikes only occurred after several months of declining unemployment. So I wouldn't expect interest rate hikes anytime soon.

Community Bank of Tri-County is offering a 13-month special CD with a 2.00% APY. It has a no-penalty feature that allows a one-time penalty free withdrawal which can come in handy if interest rates rise in the next year. The downside is that it requires a checking account, but I was told any personal checking account qualifies. Minimum CD deposit is $500. This special is listed in the bank's rates page as of 2/18/2010. The CSR didn't know how much longer it would last.

A branch visit is required to open an account. Branches are located in Southern Maryland.

The bank's rating for safety and soundness are above average: 5 stars (superior) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 1957 (FDIC Certificate # 30903).

Catholic & Community Credit Union which is based in Shiloh, Illinois is offering a high-yield reward checking account called the Ultra Checking Account. It has the following rates if certain monthly requirements are met (as of 2/18/2010):

• 3.55% APY for balances up to $25,000
• 0.50% APY for portion of balance over $25,000

Monthly requirements include:

• 12 debit card purchases
• Receive e-statements

The credit union membership is open to residents of St. Clair, Monroe and Madison Counties in Illinois. The field of membership is listed on the credit union's front page. Membership requires a $25 minimum balance in a savings account and a $1 one-time membership fee.

Branches are located in Shiloh and Belleville, Illinois which are just east of St. Louis.

The credit union's ratings for safety and soundness are above average: 4 stars (excellent) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The credit union is federally insured by the NCUA (Charter # 65735).

Other High-Yield Reward Checking Accounts

Refer to the reward checking section of DepositAccounts.com to find reward checking accounts in your area or that are available around the nation.

For those opening long-term CDs, it's important to remember that the basic deposit insurance coverage of $250,000 is scheduled to be reduced to $100,000 after the end of December 31, 2013. However, this $250,000 coverage is permanent for IRAs (it was permanent before this change). Here are the official details from the FDIC website

Deposits at FDIC-insured institutions are now insured up to at least $250,000 per depositor through December 31, 2013. On January 1, 2014, the standard insurance amount will return to $100,000 per depositor for all account categories except for IRAs and other certain retirement accounts (including IRAs) which will remain at $250,000 per depositor. (This supersedes the October 3, 2008 changes.)

This same coverage and date applies to credit union deposits that are federally insured by NCUA.

It's possible that Congress and the President will extend the $250K coverage like they did on May 2009 which pushed the date from the end of 2009 to the end of 2013. Of course we'll have to wait and see. It's no guarantee. Thus, this may complicate your CD ladders. CDs with terms of 4 years and longer will extend into 2014 and you may lose some of your FDIC coverage if your principal and accrued interest are above $100K. One option is to try to extend the basic insurance coverage via beneficiaries. Refer to the FDIC website for details.

River Bank is offering a competitive 5-year CD yield of 3.51% APY. The shorter terms are not quite as competitive. The ones that are a little above average include the 1.70% APY 15-month CD and the 1.40% APY 9-month CD. An extra 0.10% is available for money market or checking account customers. These are also available as IRA CDs. Minimum deposit is $500. These rates are listed in the bank's deposit rates page as of 2/18/2010.

River Bank also offers a competitive savings account called xStream Savings which has a 1.45% APY with no minimum balance requirements. It does require a minimum $40 automatic monthly transfer. This rate is listed in the bank's savings rates page as of 2/18/2010.

There's an online application, however, the second page form only allows residents of Massachusetts and New Hampshire to apply. It appears funding can be done by an ACH transfer. Under the CD rates table, the following is stated regarding when the CD rate locks:

The CD interest rate is guaranteed for five business days following the date of internet application. If we do not receive your deposit within this period, the interest rate will be the rate in effect on the day the deposit is received.

The bank is headquartered in North Andover, Massachusetts. In addition to North Andover, branches are located in Andover, Lawrence and Methuen, MA and in Salem and Derry, NH.

The bank's ratings for safety and soundness are strong: 5 stars (superior) at BauerFinancial and 4 stars (sound) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 1981 (FDIC Certificate # 23288).

LOMTO Federal Credit Union is having a grand opening special share certificate with a 3.00% APY and a 2-year term. The special is scheduled to last until 2/28/2010. This is listed in the credit union's Notices page as of 2/18/2010. The new office is at 50-24 Queens Boulevard, Woodside, NY 11377.

The credit union also has several competitive standard certificate rates. I've reported on their competitive CDs for the last couple of years. My last post was in June 2009. The following rates are listed in the credit union's certificates of deposit page as of 2/18/2010:

• 1.40% APY 6 months
• 2.07% APY 12 months
• 2.32% APY 24 months
• 2.84% APY 36 months
• 3.14% APY 48 months
• 3.56% APY 60 months

Minimum deposit is $2,000. Terms from 1 to 5 years are also available in IRA certificates. The early withdrawal penalty for the longer term CDs is 6 months of interest (earned or unearned).

Membership is open to anyone who lives, works, worships, attends school in parts of the west side of Manhattan. Please see the credit union's membership page for more details. Credit union membership requires a $3 fee and a minimum deposit of $25 in your share savings account. You can also be eligible for membership via family and via membership in LOMTO Inc. which according to one reader is not worth joining unless you're a cab driver. Please refer to the LOMTO Inc. membership page for more details.

In addition to the new branch at 50-24 Queens Boulevard, Woodside, New York 11377. There's also a branch at 180 Riverside Boulevard @ W69th Street, New York, New York 10069. Refer to the credit union's contact page for the full details

The credit union has top ratings for safety and soundness: 5 stars (superior) at BauerFinancial and 5 stars (superior) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The credit union is federally insured by the NCUA (Charter # 1532).

Thanks to the reader who emailed me news of this CD special.

Palladian Private Bank is an internet bank with some competitive rates. The best CD rate is 1.90% APY for a 12-month term. Minimum deposit is $10,000. The 3-month and 6-month CDs are not quite as competitive. The savings account rate is 1.70% APY for a minimum balance of $10K which is pretty good these days. These rates are listed on the bank's rates page as of 2/17/2010.

Palladian is a division of The PrivateBank and Trust Company. Both websites use the same online banking service at ibanking-services.com, and this is used for the online application at Palladian. According to the small print under the rate table, the CD APY is effective for 14 calendar days from the date on which they receive your completed application.

I couldn't find much documentation about the CD and savings account on the website, so I called the bank today at 877.564.8880. Here are some details that I was told applicable to all accounts:

• Available nationwide
• You can fund the account via an ACH transfer from an existing bank account
• CSR wasn't sure about a hard credit inquiry
• No POD beneficiaries can be included

Some details I was told specific to CD accounts:

• Early withdrawal penalty equal to 90 days of interest for terms of 1 year and under
• Grace period is 10 calendar days
• At maturity, they don't provide ACH or wire transfer to receive the funds. They may be able to transfer the money to your Palladian savings account

Some details I was told specific to the savings account:

• No bank-to-bank ACH transfer service
• Allows transfers initiated from another bank
• $10K minimum balance to earn interest
• No monthly fees

The internet banking features of this bank are weak. Only the above-average interest rates make this a so-so deal.

The PrivateBank and Trust Company is part of PrivateBancorp, Inc. It has 34 offices in 10 states serving major metro areas including Atlanta, Chicago, Cleveland and Denver.

The bank's ratings for safety and soundness are a little weak: 2 stars (below peer group) at Bankrate.com and 3½ stars (good) at BauerFinancial. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 1991 (FDIC Certificate # 33306).

Republic Bank is offering a high-yield reward checking account called BreakFree Checking. It offers the following rates if certain monthly requirements are met:

• 2.00% APY for balances up to $500,000
• 0.05% APY for portion of balances over $500,000
• 0.01% APY base rate if monthly requirements are not met

The monthly requirements include:

• 12 debit card purchases
• 1 direct deposit or automatic payment
• receive online statements

Some additional important features of this account include:

• $10 account setup fee
• $10 annual fee
• $50 minimum initial deposit
• No minimum balance requirement
• Free ATM transactions everywhere (All ATM fees assessed are refunded to the account on the next business day.)

This is the first time I've seen an account setup fee and an annual fee. They're small, so the account could still be worthwhile for large balances.

There's an online application link at the BreakFree Checking page. However, the first page of the application lists the areas of the country that are eligible to apply. Areas include:

Kentucky market areas: Boone, Bullitt, Daviess, Fayette, Franklin, Hardin, Jefferson, Kenton, Oldham, Scott, Shelby and Warren County

Indiana market areas: Clark County, Floyd County and Harrison County

Florida market areas: Hillsborough, Hernando, Pasco and Pinellas County

Ohio market areas: Hamilton County

According to the bank customer service rep, they do not run a credit report at a branch during the account opening process. However, if you apply online, they do run a credit report that could be a hard pull.

$100 Bonus Through 4/30/10

A reader mentioned receiving a mail offer about a $100 bonus for opening either the BreakFree checking, the Premier 50 checking or the Absolute Free checking. I inquired about this offer via the bank's online chat. According to the CSR this offer was sent National City clients to move their business over to Republic Bank. However, the CSR also said that new customers who are not National City clients could still be eligible if they are willing to move all of their accounts to Republic Bank. A branch visit would be required for this $100 bonus. Hat tip to the reader for mentioning this promo in the comments.

Bank Overview

The bank has two FDIC charters that are both under one holding company. These two banks are:

• Republic Bank based in Port Richey, FL (FDIC Certificate # 35344) Ratings: 4 stars (sound) at Bankrate.com and 3½ stars (good) at BauerFinancial
• Republic Bank and Trust Company based in Louisville, KY (FDIC Certificate # 23627) Ratings: 4 stars (sound) at Bankrate.com and 3½ stars (good) at BauerFinancial

The above ratings are based on 9/30/09 financial data.

Pacific Global Bank is offering a competitive CD promotion: 2.00% APY for terms of 9 and 12 months. Minimum deposit is $5,000, and the maximum is $250,000. New money is required. The promotion is listed in the bank's 14th anniversary flyer (pdf) as of 2/17/2010.

Another CD promotion listed in the flyer is not quite as good in my opinion. There are two step-up CDs: 2.25% APY 36-month CD and a 2.50% APY 60-month CD. You can step-up the rate one time during the term to the current yield of a one-year Treasury Bill plus 0.50%. The maximum it can be raised is 6.00% APY. Currently the one-year Treasury yield is only around 0.35%.

In addition to the CD promotions, there's also a competitive money market promotion with a 1.75% APY guaranteed until 3/31/10. The standard rate is only 0.75%, but according to the promo, if you can bring in $10K of new money after 3/31/10, the 1% bonus will continue for another quarter.

It appears that a branch visit is required to open an account. The bank has three branches located in Chicago, IL.

The bank's ratings for safety and soundness are above average: 4 stars (excellent) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 1995 (FDIC Certificate # 34089).

PerkStreet Financial has a new promotion for its online checking account. New customers get 6 months of 2% cash back on their non-PIN debit card purchases. Here's an overview of the requirements:

• Open an account online with at least $25
• The 6 month period will begin once your account has been opened
• Must be non-PIN debit card purchases (credit or signature option)
• After the 6 month period, you'll earn 1% cash back on all non-PIN debit card purchases
• If you choose to receive free music or coffee instead of cash back, you'll still earn double for your first 6 months
• Offer expires April 30th, 2010 (extended to June 6, 2010)
• Excludes existing customers, previous customers who had accounts in last 12 months and new customers who have a household member with a Perkstreet account

PerkStreet had offered a $50 sign-up bonus last year (and $100 for a little while). You'll have to make at least $5K in purchases in 6 months for this new offer to be sweeter than the $50 bonus from last year.

Some other details about this online checking account include:

• $4.50 monthly fee can be avoided by using the account (debit card usage, writing a check that clears the account, using Online Bill Pay, initiating a withdrawal or making a deposit to the account)
• No interest
• No minimum balance requirement
• First book of checks is free
• No fees for ATMs within the STARsf network ($2 fee for other ATMs plus any fee the ATM owners may charge)
• ACH bank-to-bank transfer service
• Free deposits at 3,400 UPS and Mailboxes Etc locations

According to the Perkstreet Financial's website, banking services are provided by The Bancorp Bank which is a FDIC member. The Bancorp Bank has a been a FDIC member since 2000 (FDIC Certificate # 35444).

Why choose PerkStreet over a reward checking account?

Reward checking accounts reward debit card use with high interest rates. PerkStreet rewards debit card use with cash back, similar to credit card reward programs. If your average balance is only $3K, a 4.00% yield will only give you about $120 of interest during the year. With 1% cash back, you'll earn more if you make at least $12K in purchases during the year (excluding the effect of taxes).

For those who prefer credit cards, it's hard to compete with credit cards from PenFed, Charles Schwab and Fidelity. For those who prefer debit cards, PerkStreet's cash back debit card is pretty unique.

Why reward for debit card use?

As I mentioned in January Visa and banks profit from non-PIN debit card use from interchange fees charged on merchants. You can say that this cost just gets passed to the consumer. At least with these reward programs, we can get some of that back.

Update 2/19/2010: Top rate is scheduled to fall to 0.85% effective March 1, 2010. Readers have just reported being told this by the bank. One other change is the elimination of the deposit card usage requirement.

Allegiance Bank is now allowing residents of PA, NJ and DE to open its STAR reward checking account online. The rate is low for reward checking (2.75% APY as of 2/16/2010). However, this rate is for balances up to $250K. That's 10x the typical reward checking balance cap. The rates and the link to the online application are in the deposit rates page. I have more details on this reward checking account in my account review. The 2.75% APY has held since last May.

At the top of the online application it states:

We welcome all residents of Pennsylvania, New Jersey, and Delaware to apply.

In addition to the reward checking account, online applications are available for the Star Money Market Account and a for a few CDs. However, rates on these are not that competitive.

In addition to the online application, you can also open the account at one of its PA branches which are located in the suburbs of Philadelphia. Considering the recent snowfall around this area, I would think most would prefer the online application.

One issue to note, Allegiance Bank's ratings are weak: 0 star (lowest) at BauerFinancial and 1 star (lowest) at Bankrate.com. These ratings are based on 9/30/09 financial data. Also note, the bank has been operating under a FDIC Cease and Desist Order since 11/4/2009. The bank has been a FDIC member since 1999 (FDIC Certificate # 35078).

Thanks to the reader who emailed me news of this reward checking account.

Greer State Bank is offering two competitive CD specials: a 2.25% APY 13-month CD and a 2.20% APY 18-month CD. The 13-month CD requires a checking account. There are also two competitive short-term CD specials that are labeled as internet specials: a 1.60% APY 6-month CD and a 1.65% APY 9-month CD. I don't see any online application so it may only be available to existing customers who open it while logged into online banking. Minimum deposit for these specials is $5,000. These rates are listed at the bank's rates page as of 2/16/2010.

The bank also has a reward checking account that currently pays 3.00% APY on balances up to $25K (1.55% for above). These rates have held for over a year (see review).

It appears you have to live in the bank's market area to be able to open accounts. Branches are located in the South Carolina cities of Greer and Taylors.

The bank's ratings for safety and soundness are a little weak: 2 stars (below peer group) at Bankrate.com and 3 stars (adequate) at BauerFinancial. Both ratings are based on 9/30/09 financial data. The bank has been FDIC member since 1989 (FDIC Certificate # 27413).

Valliance Bank is offering a special 2.00% APY 12-month CD. Minimum deposit is $1,000. For a Jumbo CD with a $100K minimum, the yield is 2.10% APY. These rates are not listed on the bank's website. I contacted the bank today (2/16/2010), and was informed of these specials. According to the CSR, these rates may change after this week.

The CSR also mentioned a competitive savings account that currently pays 1.85% APY as of 2/16/2010.

It appears that a branch visit is required to open an account. It's a small bank with one office located in McKinney, Texas which is in the northern suburbs of Dallas.

The bank's ratings for safety and soundness are a little weak: 3 stars (adequate) at BauerFinancial and 2 stars (below peer group) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 2007 (FDIC Certificate # 58572).

Spencer Savings Bank is offering a competitive 3.25% APY 49-month IRA CD. Unfortunately, it's not available as a regular CD. Minimum deposit is $500. This rate is listed at the bank's IRA rates page as of 2/16/2010. This same rate is also listed in the Coverdell Education Savers rate table.

One flexible IRA CD feature mentioned in this bank's page includes:

One term change is allowed per year for customers over age 59 1/2 years of age without penalty.

I'm not sure exactly what this means. It sounds like you are allowed to change to a shorter or longer term CD. Changing to a short-term CD could come in handy if rates go up.

There's an online application but it states that you have to visit a branch with two forms of ID to complete the application. Branches are located in 18 Northern New Jersey cities.

The bank's ratings for safety and soundness are above average: 5 stars (superior) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 1939 (FDIC Certificate # 30076).

AEA Federal Credit Union is offering a special 2.00% APY 12-month CD. Minimum deposit is $10,000. It's called the CEO special, and it's listed in the credit union's rates page as of 2/16/2010.

Membership is open to anyone who lives, works, worships, or attends school in either Yuma or La Paz County, Arizona. Please refer to the credit union's Eligibility Page for the full details. Membership requires a one-time $5 fee and a minimum balance of $25 in the share savings account.

The credit union's ratings for safety and soundness are a little weak: 2 stars (below peer group) at Bankrate.com and 3 stars (adequate) at BauerFinancial. Both ratings are based on 9/30/09 financial data. The credit union is federally insured by the NCUA (Charter # 4915).

You want to make sure that your mortgage and utility bills are paid on time every month, but you hate writing checks, and paying postage to mail those bills is getting to be a hassle. Therefore, you sign up for automatic payment with each of these companies. In doing so, you notify your mortgage and utility companies that you would like the respective set amounts to be taken from your account on certain days each month. When those days arrive, the receivers (the companies that receive the payments) contact the originators (the billers) and tell them to send requests to your bank to transfer the money amounts from your account to the lenders’ accounts per your written permission that you gave when you signed up for automatic bill pay.

The originators send the information to the ODFI (your bank) which then deducts those amounts from your account. At this point, the money is still in your account, but it’s not available to you because holds have been placed on those funds. The lender's bank transfers the amounts to the lenders’ accounts, but the bank doesn't make the money available yet. These transactions will be listed as a "pending ACH transfers". Once the RDFI (usually the Federal Reserve) receives the information, the accounts are reconciled (“balanced”), proven to have sufficient funds to complete the transaction ("cleared"), and the money is officially deducted from your account and deposited in your lenders’ accounts ("settled"). Now, the transactions are officially complete. Your bills are paid for another month. If you don’t yet use direct deposit or automatic bill pay personally, signing up is simple. Just notify your employer and/or the billers for which you have services or products that you wish to participate in Automatic Billing. Some billers may require you to fill out minimal paperwork, but most companies offer the opportunity to sign up online by visiting their websites.

While the concrete details as to how transactions are recorded and finalized aren’t available to the general public to prevent hacking, safeguard account information and maintain the integrity of the system, you might be surprised to learn that clearing transactions is a relatively simple, comparatively quick procedure. A typical transaction takes anywhere from a few hours to a few days to clear depending on how much traffic passes through the regional clearing houses. Interestingly, these transactions do not happen in “real time” as some might think. Instead, participating institutions receive output files (transaction updates and notations) just four times a day. Therefore, the transaction might not appear immediately in your record.

How Businesses and Other Government Agencies Utilize ACH Transfers

Many businesses use direct deposit to pay their employees. When you get your check direct-deposited, your employer uses the ACH to place the funds from your paycheck into the account(s) that you designate on your employment paperwork. The vast majority of Americans who have the option to do so use direct deposit to ensure their checks are placed into their accounts without them having to worry about losing the check or waiting to use the money. The money is available immediately, and people can plan their monthly budgets according to when they get paid. Similarly, if you use Automatic Bill Pay to pay mortgage, utility, or credit card bills, the companies that provide those services to you receive their payments through the ACH network. In using the ACH network, you control the amount of your payment, and you decide when the payment goes out to the lender. There’s no more stress about whether these bills will get paid on time. Just keep in mind that you are obligated to have the money in your account at the time that the payments go out. If there isn’t enough money in your account at the time that the payments are delivered, you might face penalties that range from late fees to suspension or discontinuation of services. These companies might also notify the credit bureaus that you didn’t pay the bill on time which could cause your credit rating to plummet.

Businesses can also use ACH transactions in a similar manner to fulfill other financial obligations. For example, if a school system has contracts with specific food vendors to supply products to the schools within that system, ACH transfers are used to deliver money from the school system accounts to the accounts of the vendors. Many government agencies use ACH transfers on a wide scale. The IRS uses ACH transactions to receive payments and issue refunds. Various agencies (the DMV, child support enforcement agencies and the Social Security Administration) utilize ACH transactions routinely to collect and issue payments in a timely, efficient manner. In fact, the use of ACH transactions has become so widespread that more and more companies are now insisting that their customers pay them electronically. This reduces the use of paper, cuts costs and eliminates unnecessary and time-consuming record keeping since the information is all electronic. In short, the biggest advantage in using ACH transactions is that doing so simplifies the process of getting and giving money.

How to Move Cash Among Various Accounts Using ACH Transfers

If you have funds that are spread across several accounts—whether you are establishing accounts for different family members or pursuing higher interest rates—transferring and keeping up with money from various accounts can be quite challenging. Fortunately, customers do have options at their disposal so that they may track and manage their money as effectively as possible. Consider these helpful tips when deciding where you want to keep your cash stashed:

• 1) Find a bank that requires a very low minimum balance and no monthly fees. Since it’s unlikely that you’ll be keeping the bulk of your funds here, you don’t necessarily have to worry about interest rates. However, it’s probably a good idea to keep at least some money here in case you need to transfer funds quickly, or you want to prevent your bank from closing an empty account.
• 2) Make sure that your hub account has the ability to” push” (deposit) or “pull” (withdraw) money from multiple external accounts with no transfer fees. Some banks allow you to link just one or two accounts. Others will charge you when you initiate individual transfers.
• 3) Look for banks with quick transfer times. Ideally, transactions should take no longer than one business day, but some financial institutions may take as long as three days to transfer money. In some cases, however, if you schedule a funds transfer before the end of a business day, they may credit your account even before you are able to withdraw the money so that you can start earning interest that day (even though, to prevent fraud, you can only withdraw the money officially after three days).
• 4) Make sure that the bank or credit union allows the transfer. Some institutions may not permit one party to initiate transactions. Most banks will not charge customers who put money in their accounts, but some charge fees when money is withdrawn from their accounts.

Here’s a sample timeline of one such transaction:

Friday: You schedule a $500 transfer from one bank (Point A) to your hub account (Point B). You begin earning interest in your hub account on Friday, but nothing has happened at the bank yet.

Monday: $500 is withdrawn from one bank (Point A).

Thursday: $500 is available to pull from your hub account (Point B). Now, you schedule a transfer from a second bank (Point C), and $500 is debited from your hub account.

Friday: $500 is available at the second bank (Point C).

A Brief History of ACH Transactions

The Automated Clearing House (ACH) was established initially in 1972 as a collaborative effort between California banks and the regional Federal Reserve to simplify the processing of paperless check transactions. Word of its success spread so quickly that many other ACH associations were founded, and agreements were made between the associations and their respective regional banks to operate regional ACH networks. Two years later, in 1974, the National Automated Clearing House Association (NACHA) was founded to develop a national ACH network. By 1978, this had been achieved, and all ACH networks throughout the United States were linked electronically. In 1980, the Monetary Control Act was passed that gave private sector ACH operators the right to compete with the Federal Reserve Bank because the Federal Reserve could no longer offer free services since its operating costs had to be recovered. As a result, there are three private sector ACH operators: American Clearing House Association, The New York Automated Clearing House, and VisaNet ACH Services. Currently, the Fed ACH Operator, otherwise known as the Federal Reserve, handles more than 85 percent of ACH transactions. The ACH Network allows such streamlined services as online bill pay, direct deposit, and direct debiting, and it’s a faster, more secure alternative to paper check clearance. Today, the ACH Network consists of more than 12,000 financial institutions, 650 industry councils, and a network of regional ACH associations that are governed by NACHA from its headquarters in Herndon, VA.

Update 5/18/2010: The rate has fallen to 1.50% APY.

Southern Community Bank and Trust has a new online savings account called the Ready Saver Account. It's a no-minimum and no-fee online savings account. It currently has a very competitive rate of 2.00% APY for all balances as of 2/15/2010.

The bank's About Ready Saver page has a few details:

• Can only be opened online
• Not available for North Carolina residents
• Minimum initial deposit is only $1
• No monthly service fees or other hidden charges
• No rate tiers
• interest accrues monthly
• monthly e-statement
• ACH bank-to-bank transfer service with automatic transfers

There are a few more details in the Ready Saver Truth-in Savings disclosure. Some details not mentioned above include:

• Interest rate on your account may change at any time.
• If you close your account before interest is credited, you will not receive the accrued interest.
• Minimum monthly required activity - You must sign into and access your online banking account monthly to verify you have access to your eStatement.
• $3.00 fee per withdrawal in excess of 6 withdrawals per month.
• A maximum of $15,000 in electronic transfers on any defined banking day (Update 2/16/10: Based on info from CSR, this does not seem to be enforced - see update below)

Update 2/17/10: A long-time reader contacted the bank and received many account details (see below). Some important issues to highlight:

1. They do a hard credit pull with Equifax for all new accounts
2. Any debit transactions in excess of 9 cumulative per calendar quarter are assessed a $3 service charge each.
3. They do not link (store) external accounts for transfers like most other online banks, so you need to enter the account information each time you want to initiate an ACH debit/credit.

One thing to note about the Ready Saver online application is that it uses the same service (secureinternetbank.com) that is used by Southern Community Bank and Trust's website to open the reward checking account. With new internet banking websites, it's always a good idea to confirm the link with the parent bank. Southern Community Bank and Trust has been a FDIC member since 1996 (FDIC Certificate # 34321).

Southern Community Bank and Trust has its headquarters in Winston Salem with branches in several North Carolina cities including Asheville, Greensboro, Winston-Salem and Raleigh. I guess they're excluding NC residents so they can bring in only new money.

The bank's ratings for safety and soundness are mixed: 3½ stars (good) at BauerFinancial and 1 star (lowest) at Bankrate.com. Both ratings are based on 9/30/09 financial data.

Rate Chaser's Worries

As I mentioned this morning in my reward checking post, Southern Community Bank and Trust also offers a nationwide reward checking account, and the rate has remained competitive for the last two years (see account review). That's hopefully a good sign that this savings account rate will remain competitive over the long-term. Also, the bank is not small with over $1.3 billion in deposits based on 9/30/09 FDIC data. So it shouldn't be overwhelmed too quickly by a large influx of deposits.

Will this savings account rate fall to average or below average a year from now? That's always the question when there's a new hot online savings account. There have been a few disappointments over the last year. The latest one is 1st Constitution Direct's Savings Account which now has a mediocre rate of 1.25% APY. However, there have been some bright spots. CNB Bank Direct is over a year old, and it's still offering a competitive savings account rate of 1.50% APY. Incredible Bank is much younger, but it's still offering 2.02% APY on its internet checking account after more than 3 months.

If you're weighing the pros and cons of opening a new savings account, refer to my post Internet Banks and Rate Chasing - Is It Worth It?. It reviews some issues to consider.

Update 2/16/2010: One of this blog's long-time readers was nice enough to email me the following details that he received from his conversation with the bank's CSR:

Credit Pull--They do a hard credit pull with Equifax for all new accounts, with an additional inquiry to Chex Systems. Once you have an established account, can open others with no additional hard credit pull, unless you add another (new) joint holder. Exception allowed for no additional hard credit pulls if doing additional ITF/POD accounts in your same social security tax ID number.

Account Vestings--They do offer individual, joint and POD/ITF vestings. No Trust vestings (Living Trust, etc.) are allowed. For POD/ITF vestings the POD/ITF person(s) is/are named in the account title field and appear in both the on on-line account system and the quarterly statements (electronic delivery required).

Number of Accounts Limitation--Bank allows for a maximum of 2 accounts per social security tax ID, with exception for unlimited POD/ITF accounts (since in your social security tax ID).

Account Transaction Limitations--Total maximum of 9 debit transactions per calendar quarter. This is a cumulative total per quarter, so can have 2 in Jan, 4 in Feb and 3 in Mar. All statements cut-off on quarter-end. Any debit transactions in excess of 9 cumulative per calendar quarter are assessed a $3 service charge each.

Account Transaction Dollar Amount Limitations-- No standard policy limitations per CS. They do look over higher transfers and review on a case by case basis. Remember they have your credit report from Equifax and results from Chex Systems.

Account Legacy-- This account has been offered for about 18 months, not actively advertised and the rate has been the same 2% APY since inception. The Bank does have a rate committee that meets monthly.

Bank Phone Hours: M-F 7:30 AM - 7:30 PM, EST; SAT 9AM-1PM, EST.

The On-Line Banking Department has 5 employees that would take phone calls. They know their FAQ list needs to be expanded for this information. They are also aware that the Banking Blog has this account listed and have already received a number of quality clarification calls from blog followers.

Update 2/17/2010: The reader emailed me some additional account features that he was told by the Ready Saver CSR:

On-line account statements are available for a rolling 18 months. Also they do not link (store) external accounts for transfers like most other on-line banks, so you need to enter the account information each time you want to initiate an ACH debit/credit. This could be a little risky if one is rushed and not careful in entering the information. They do not send any kind of test deposits to check the external account either. You also got the fact that they limit (no fee) to first 9 debit transaction each quarter vs. 6 per month elsewhere. They say this relates to NC banking rules--I've never heard of this before.

Rate History:
05/17/10: 1.50% APY
05/03/10: 1.75% APY
02/15/10: 2.00% APY

It has been over two years since we saw the first surge of reward checking accounts. Have they lived up to expectations? I reviewed my old posts and picked 5 nationwide reward checking accounts that are still offering very competitive rates.

I first started reporting on reward checking accounts in 2006, but in 2007, the number of reward checking accounts really started to grow. Reward checking didn't seem that great back then when many internet savings accounts were paying over 5%. Even State Bank of Toledo's 6% reward checking didn't seem that great when FNBO Direct had a 6% 5-month promotion on its internet savings account. Also, there were concerns about the longevity of reward checking. Was it a teaser type of product? Can the high rates last?

After over two years, reward checking rates have held up better than internet savings account rates. For example, back in 2007, both FNBO Direct and HSBC Direct had 6% promotional rates. After those expired, the rates were still competitive at over 5% APY. Currently, FNBO Direct is paying 1.40% APY and HSBC Advance (formerly HSBC Direct) is paying 1.20% APY. You can see their rate history in this this post.

Most reward checking accounts that began in 2007 paid 6% APY for balances up to $25K. Rates have fallen, but many continue to pay at least 4% APY. That's a lot better than the "high yield" internet savings accounts. Reward checking is actually holding up better than I had anticipated. However, rate drops are not the only concern for reward checking customers.

In addition to rate cuts, banks can also reduce the balance that qualifies for the top rate. Another common issue are banks that are reducing the availability of their accounts. Many banks started offering their accounts nationwide, but then they cut back to just their local area. Fortunately, most banks have grandfathered in out-of-state people who joined when the account was still nationwide.

How can reward checking accounts continue to pay so much better rates? Their debit card usage requirements have a lot to do with it. I described this in my post on the math behind reward checking.

Below is a quick review of five reward checking accounts that can be opened nationwide that are paying at least 4% APY. Note this is as of today (2/15/2010). As I described above, rates and availability often change.

1. Consumers Credit Union's rewards checking account pays 4.09% APY for balances up to $25K as of 2/15/2010. My first review of this account was in August 2007 when the yield was 6.01%. The credit union is based in Illinois, but you can be eligible to join the credit union via the Consumers Cooperative Association.
2. First New England FCU's reward checking account pays 4.10% APY for balances up to $15K as of 2/15/2010. When I first reviewed this account in January 2008, it was paying 6% on balances up to $25K. This is one example of a balance cap cut. Like Consumers CU, you can be eligible to join via an association membership.
3. Danversbank's reward checking account pays 4.01% APY on balances up to $25K as of 2/15/2010. My first review of this one is almost 3 years old. At that time the yield was 6.01% for balances up to $100K. The bank was nice when it cut the balance cap by grandfathering in those who had opened the account before 2008.
4. Capital Bank's reward checking account pays 4.01% APY on balances up to $25K. However, I just noticed that they're going to be reducing the balance cap to $10K starting on March 18th. This is another old one that I first reported on in April 2007. It started out with a 5.01% APY which was below average back in 2007.
5. Southern Community Bank and Trust's reward checking account pays 4.00% APY for balances up to $25K as of 2/15/2010. I first reported on this just over two years ago. They reduced the yield in 2008 from 6% to 4%, and they haven't made another cut since then.

To find more nationwide reward checking accounts and reward checking accounts in your local area, please refer to the reward checking section of DepositAccounts.com.

Service Credit Union is offering a limited-time CD special that's very competitive: 2.15% APY for 13 months. Minimum deposit is $1,000. It's only available online (not by phone or at branches) The offer is scheduled to last only to midnight Monday (2/15/2010). The offer is shown on the front page of the website.

The credit union continues to offer two other competitive CD specials: 2% APY for 9 months and 2.25% APY for 19 months. These rates are listed in the credit union's rates page as of 2/14/2010. Unlike the 13-month CD, these are also available at the credit union branches.

The online application uses the Andera account opening system. Transfers are done via ACH or by debit/credit card.

Service Credit Union membership is available to anyone living or working in New Hampshire (except Coos County which is way north in NH) and in the Falmouth MA area, as well as anyone related to an existing member (by family), or anyone who has served in the US Military. Please refer to the credit union's membership eligibility page for the full details. Membership requires a $5 minimum balance in the share savings account.

Branches are located in the New Hampshire cities of Bedford, Lebanon, Epping, Keene, Manchester, Newington, Portsmouth, Rochester, Salem and Somersworth and in Falmouth, Massachusetts. There are also branches in Germany to service military members.

The credit union's ratings for safety and soundness are strong: 5 stars (superior) at BauerFinancial and 4 stars (sound) at Bankrate.com. Both are based on 9/30/09 financial data. The credit union is federally insured by the NCUA (Charter # 68375). It's a large credit union with $1.4 billion in assets and 124,270 members.

Update 2/19/2010: This CD special is now available at all SunTrust branches in Central Florida.

SunTrust is advertising a competitive CD special that's a bit unusual. It requires that you deposit equal amounts in a 26-month CD and a 49-month CD. Both have a 3.00% APY which is competitive even for a 4-year CD. A SunTrust checking account is required. The offer is available for consumer, business and IRA CDs. Minimum deposit is $2,000, and the maximum is $1 million. This special doesn't seem to be listed at SunTrust's website. It was advertised in today's (2/14/2010) Tampa Tribune. The ad is available online here.

According to the ad, the offer is good in metropolitan Tampa, Florida. So this may not be available at all SunTrust locations. If you find it's available elsewhere, please leave a comment.

Update 2/19/2010: I was just informed that this CD promotion is now available at all SunTrust branches in Central Florida in addition to the Tampa area. I was also told more details about the checking requirement: Solid Choice checking (15k combined min balance requirement) or Signature Advantage (250k combined min balanace requirement) checking are required.

I just posted on a $150 SunTrust checking account bonus that appears to be available nationwide (see post). In January, SunTrust was offering a 1.60% money market promotion with the rate guaranteed for 3 months (see post). I was told on 2/19/10 that this mma promo is still available.

Dow Jones reported on SunTrust's downgrading by Standard & Poor's Ratings Services on February 1st:

SunTrust, which serves areas of the southeast U.S. hit hard by the real estate crash, including Florida, has suffered from exposure to local construction and commercial real estate, as well as effects of high unemployment. The lender posted a string of losses last year.

As you may expect, SunTrust's ratings for safety and soundness are a little weak: 3 stars (adequate) at BauerFinancial and 1 star (lowest) at Bankrate.com. Both are based on 9/30/09 financial data.

SunTrust is a FDIC member (FDIC Certificate # 867). It's one of the large regional banks with $166 billion in assets and $126 billion in deposits.

United Western Bank is offering a special 22-month CD with a 2.22% APY. Minimum deposit is $500. This special doesn't appear to be listed at the bank's website. It was advertised in a Colorado newspaper today (2/14/2010). The ad is available online here. The small print says to refer to offer code VP0110CD.

It appears that a branch visit is required. Branches are located in the Colorado cities of Denver, Boulder, Cherry Creek, Hampden, Fort Collins, Centennial, Longmont and Loveland.

The bank's ratings for safety and soundness are a little weak: 3 stars (adequate) at BauerFinancial and 2 stars (below peer group) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 1962 (FDIC Certificate # 31293).

Update 3/16/2010: There's a new promotions page which lists a new expiration date of 3/19/2010. Also, this page specifically mentions which states qualify: "Offer available to online applicants only in Ohio, Michigan, Indiana, Pennsylvania, Kentucky, West Virginia, and Florida."

Huntington National Bank is offering a $100 checking account bonus. There's a link at their home page to www.huntington.com/100bucks/ Offer expires February 27, 2010 (see above). The free checking qualifies, and it can be opened online. Here are the details after you open the account:

• Set up an automatic direct deposit to the new account with the first deposit occurring within 60 days of account opening OR make 5 or more Check Card purchases within the first 60 days of account opening.
• Bonus will be deposited to the new checking account within 90 days of account opening
• Bonus is considered interest and will be reported on IRS Form 1099-INT.
• An Early Account Closing Fee will apply to accounts closed within 180 days of opening.
• Bank reserves the right to limit one gift incentive per household.

On the first page of the online application it states:

Note: All applicants must be U.S. Citizens or Permanent Residents and at least 18 years of age. For Permanent Residents, your Resident Alien Card or Green Card Number is required. These are individual and joint accounts only and are not available to California residents, trusts or businesses.

Credit for this find goes to this FW thread. One important note in the thread is to beware of the dormant account fee which can hit after 6 months.

Huntington still offers an online savings account but the rates are low. I first reported on this in February 2007.

Huntington Bank is headquartered in Ohio with branches in Indiana, Kentucky, Michigan, Ohio, Pennsylvania, and West Virginia. The bank is a FDIC member (FDIC Certificate # 6560).

SunTrust is offering up to $150 for opening a new checking account and using online Bill Pay. Below are the steps as outlined at SunTrust's promotions page for those without a SunTrust checking account:

1. Provide your e-mail address and SunTrust will send you step-by-step instructions on how to open a new account–and earn $150
2. Register your SunTrust personal checking account in the promotion via suntrust.com/solid between February 1, 2010 and April 30, 2010.
3. Make three bill payments through SunTrust Online Banking with Bill Pay from your registered personal checking account within the next two calendar months of the account opening date.
4. Once these steps are complete, SunTrust will direct deposit $50 into the registered SunTrust personal checking account up to 10 weeks after the last bill payment was processed.

Receive an additional $100 when you:

1. Qualify for the $50 offer above.
2. Continue to make at least three payments each month for the next three consecutive months through SunTrust Online Banking with Bill Pay from the same personal checking account registered in the promotion.
3. Once these steps are complete, SunTrust will direct deposit an additional $100 into the registered SunTrust personal checking up to 10 weeks after the last bill payment was processed.

There's also a $100 bonus for existing SunTrust customers who have not used online Bill Pay.

Reports from this FW thread indicate that it's available nationwide and there's no hard credit pull. You can apply online or by phone.

Thanks to the reader who mentioned this promotion in the Open Discussions Thread.

SunTrust is a FDIC member (FDIC Certificate # 867). It's one of the large regional banks with $166 billion in assets and $126 billion in deposits.

Hot Deals, Quick Link for Rates, Recap of this week's posts

I was surprised that we didn't have any bank failures yesterday. After 15 bank failures in January, I was expecting more failures in February, but so far there has only been one. However, I have a feeling the FDIC will be busy the next two Fridays.

So far this year there has been only one credit union closure. Not all credit unions are federally insured. Some only have private insurance via American Share Insurance (ASI). A Texas credit union, Velocity, was on the verge of switching to ASI. Last year its board of directors unanimously voted for the switch, and its members voted in favor of the switch in December. This week the board and management changed their minds and have decided to stay with NCUA deposit insurance.

On Wednesday the Fed provided some insights into its exit strategy when it released Bernanke's statements that were intended for the House Financial Services Committee meeting (which didn't take place due to Washington's blizzard). The Fed continues to say it expects "exceptionally low levels of the federal funds rate for an extended period." In my opinion, it's unlikely we'll see a rate hike before 2011 (see post).

With no end in sight, this record low interest rate environment is hitting savers and retirees hard. There were more news articles this week highlighting these difficulties. I reported on ones from the Boston Globe and MarketWatch on Thursday and today I reported on one from the UK which described the advocacy group Save Our Savers and how it's pushing for saver-friendly government policies.

Savings Account Rates

It wasn't as bad as the previous week, but there were still several banks that cut their savings account rates. Some of the major players that cut rates included Ally, Emigrant Bank and HSBC.

It has been a long time since ETrade Bank's Complete Savings Account has been competitive, and as I described on Monday, ETrade is wanting to shrink its banking business. This explains why ETrade notified many of its Complete Savings Account customers that it will be transferring their Complete Savings Accounts to Discover Bank's Online Savings Account. However, it appears not all Complete Savings Account customers are being moved to Discover Bank. It appears customers who have checking or brokerage accounts in addition to a Complete Savings Account are not being moved.

Those who are being moved may appreciate the change. Discover Bank's Online Savings Account is currently paying 1.35% APY for new accounts compared to ETrade's Complete Savings Account rate of only 0.50%. Some may miss ETrade's online banking system, but as I reported on Friday, Discover Bank is launching a new account center with many of the features we expect from an internet bank.

Rate Hikes:

1. None

Rate Cuts:

1. Colorado Federal Savings - 1.50% (was 1.70%)
2. Ally Bank Savings and MMA - 1.44% (was 1.49%)
3. Dollar Savings Direct Savings - 1.40% (was 1.50%)
4. Salem Five Direct Savings - 1.25% (was 1.45%)
5. United Central Bank Global MMA - 1.21% up to $75K (was 1.45%)
6. HSBC Advance Savings - 1.20% (was 1.35%)
7. State Farm Checking - 1.15% (was 1.25%)
8. Emigrant Direct Savings - 1.10% (was 1.20%)
9. E-LOAN Savings Plus - 1.10% $10K (was 1.20% $5K)

Certificate of Deposit Rates

CD rates continue to trend down. It's a challenge to find CDs with terms around 1 year that have rates of at least 2%. Most of the ones that I've found are from credit unions. One new one came up this week at Digital Credit Union which has a 14-month special with a 2.00% APY. (see review).

For mid-term CDs, Stonebridge Bank has a good deal on a special 21-month CD with a 2.30% APY (see review).

To get 3% CDs, you'll have to go with at least 3-year terms. The concern with long-term CDs is the potential of being locked into a low rate when interest rates start to surge. The only problem is that no one knows when rates will start going up. That's one reason to pay attention to the CD's early withdrawal penalty. The penalties can vary substantially. As I reported today, EverBank has a decent rate on a 5-year CD (3.36% APY). However, the early withdrawal penalty is one-fourth of the total interest which comes out to be 15 months of interest. On the other hand, Ally Bank's CDs only have a 60-day early withdrawal penalty. Ally's 5-year CD rate is only 3.15% APY, but its very mild early withdrawal penalty makes Ally's 5-year CD a better deal in my opinion (see my Ally CD review).

Another thing to note about Ally Bank is that they continue to offer a 0.50% bonus rate on CD renewals. A reader reported on Wednesday that Ally contacted him and offered him the 0.50% bonus for renewal. In addition, they allowed him to change terms and add to the CD at renewal. However, this appears to be targeted. So Ally may not be this generous for all of their CD customers. I would guess if someone had $500 in a 3-month CD, Ally may not offer a 0.50% rate bump and allow you to change it to a $100K 60-month CD.

Below are some of the best nationwide and local CD deals that are still active.

Best Nationwide CD Deals as of 2/13/10: Also listed are savings account promos with rate guarantee periods. The full list of nationwide CD rates is farther down.

1. 2.25% 3-mo money market/checking promo at EverBank (account review)
2. 1.77% 10-mo CD at EBSB Direct (account review)
3. 2.10% 12-mo CD at Alliant CU (account review)
4. 2.00% 14-mo CD at Digital CU (account review)
5. 2.25% 15-mo CD at First City Bank (account review)
6. 2.00% 15-mo CD at Country Bank for Savings (account review)
7. 2.30% 21-mo CD at Stonebridge Bank (account review)
8. 2.02% 24-mo Add-On CD at Northwest FCU (account review)
9. 2.75% IRA-only 30-mo CD at Navy FCU - Limited Membership (account review)
10. 3.00% 36-mo CD at Pentagon FCU (may change in Feb) (account review)
11. 3.25% 48-mo CD at Pentagon FCU (may change in Feb) (account review)
12. 3.15% 48-mo CD at Hudson City Savings Bank (account review)
13. 3.65% 60-mo CD at Melrose CU (account review)
14. 3.60% 60-mo CD at Apple FCU (account review)
15. 3.55% 60-mo CD at iGObanking (account review)
16. 3.50% 60-mo CD at Pentagon FCU (may change in Feb) (account review)
17. 3.40% 60-mo CD at Hudson City Savings Bank (account review)
18. 3.15% 60-mo Small-Penalty CD at Ally Bank (account review)
19. 4.25% IRA-only 84-mo CD at Navy FCU - Limited Membership (account review)
20. 4.06% 84-mo CD (min $175K) at USAA Bank (account review)

Best Local CD Deals as of 2/13/10: Some of the best CD deals are from banks and credit unions that don't offer accounts nationwide. Refer to the recap section and the state index section to find all the recent local deals. Here are some of the best deals to note.

1. 2.30% Money Market Account (min $100K) at Georgia Primary Bank in Atlanta (account review)
2. 2.02% Money Market Account at South Florida FCU (account review)
3. 2.00% 6-mo CD at Vision Bank in Dallas (account review)
4. 2.00% 6-mo CD at United Financial Bank of Florida (account review)
5. 2.50% 12-mo CD at Workmen's Circle CU in Georgia (account review)
6. 2.22% 12-mo CD at Cornerstone Bank & Trust in IL (account review)
7. 2.06% 12-mo CD w/chk at Chartway FCU in VA, GA, RI, NC, TX, FL & NJ (account review)
8. 2.00% 12-mo CD at Premier American Bank, NA in Miami, FL (account review)
9. 2.01% 15-mo CD at Aspire FCU in NY, NJ, NH & VA (account review)
10. 2.20% 16-mo Jumbo CD at Teachers FCU in NY (account review)
11. 2.18% 18-mo CD w/chk at Greater Western Bank in AZ, CO, KS, NE, SD, IA & MO (account review)
12. 2.20% 18-mo CD & 3.20% 44-mo CD at Crescent Bank & Trust in Louisiana (account review)
13. 4.06% 48-mo CD & 2.52% 24-mo CD at Founders FCU in SC/NC (account review)
14. 3.35% 48-mo CD at Fidelity Bank of FL (account review)
15. 4.00% 60-mo CD at PFFCU in Philadelphia (account review)
16. 3.60% 60-mo Jumbo CD at CEFCU in CA & IL (account review)
17. 3.56% 72-mo CD at Broadway Federal Bank in Los Angeles (account review)
18. 4.25% 10-year Flex-CD at First Choice CU in Florida (account review)

Reward Checking Accounts

I reported on two new reward checking accounts last week with yields of 3.25% and 3.51%. These may seem low for reward checking, but they're more than 2% above the rates of many online savings accounts including those from ING Direct and HSBC.

To see all of the high yield reward checking accounts available throughout the nation, please refer to the reward checking section of DepositAccounts.com.

Don't Forget to Check the Notices Section

As I mentioned before, lots of my posts are now in the Notices Section. Notices are very short posts that are intended to alert you to rate changes or point you to some interesting bankings news or deals on the web. This allows me to post more often on news and deals. I'll continue the blog posts in the same format that you're used to. You can get to the Notices Section from the top menu. You can also see the recent Notices on the front page. Just select the Notices tab which is next to the Blog Posts tab. If you want to subscribe to both blog posts and Notices, just click on the RSS icon at the top of either the Blog or Notices section.

Recap for the Week - Links to This Week's Posts

Banking News

• Save Our Savers Group Advocates for Change in United Kingdom
• Tax Policies to Encourage Saving and Help Even Out the Unfairness of Our Existing Government Policies?
• Velocity Credit Union in Texas Decides to Stay with NCUA Deposit Insurance
• Fed's Exit Strategy - Signs of Rate Hikes?
• ETrade Super Bowl Commercials - What Happened to ETrade Bank?

CD Deals - National

• Review of EverBank's CDs, Money Market and Checking Accounts
• Special 14-Month CD at Digital Credit Union in MA, CO & GA - Easy Membership
• Competitive 21-Month CD at Stonebridge Bank in PA - Available Nationwide

Savings/Checking Accounts - Nationwide

• Discover Bank's New Account Center with Improved Transfers
• ETrade Complete Savings Accounts to Become Discover Bank Online Savings Accounts
• Finding the Best Free Checking Accounts

Checking/Savings Bonuses

• $150 Checking Bonus and 1.50% 3-Mo Money Market Guarantee at Sovereign Bank in the Northeast
• $150 Checking Account Bonus at Associated Bank in IL, WI & MN - Local Only

Reward Checking Accounts

• High-Yield Reward Checking Account at Fibre Credit Union in Washington State - Local Only
• High-Yield Reward Checking Account at HCSB in Texas - Local Only

CD and Money Market Deals - Local

• 2.50% 12-Month CD at Workmen's Circle Credit Union in Georgia - Local Only
• Competitive 12-Month and 18-Month CD Rates at Community Trust Credit Union in California - RATE DROP
• NexBank Increases the Rate of its 24-Month CD Special - Texas Only
• Competitive Mid- and Long-Term CD Rates at Metro Phoenix Bank - Local Only
• Competitive CD Specials at United Commerce Bank in Indiana - Local Only
• Long-Term Flexible CD Special at First Choice Credit Union in SE Florida - Local Only
• 2.33% 9-Month CD at S-Bank in MA on Feb 12-13, 2010 - Local Only
• Competitive 15-Month CD Special at Stillwater National Bank in OK - Local Only
• Competitive 1-Year CD Special at Triad Bank - St. Louis Area Only

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. The top lists include banks and credit unions with broad availability and with minimums under $100,000. Previous weekly summaries are available at this page. Quick Links: Refer to the following links for the savings accounts and CDs that interest you: Liquid Account Rates: Savings Accounts, Reward Checking, Bank alternatives CD Rates: 3 Mo CDs, 6 Mo CDs, 9 Mo CDs, 12 Mo CDs, 18 Mo CDs, 24 Mo CDs, 36 Mo CDs, 48 Mo CDs, 60 Mo CDs, 84 Mo CDs, CDs by state Comments: read and discuss

As of February 13, 2010

Checking/Savings/Money Market Accounts:

• Best Reward Checking Account Rates (Nationwide & by State)
• Best Savings Account Rates (Nationwide & by State)
• Best Money Market Rates (Nationwide & by State)
• Best Checking Account Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• EverBank - 2.25% ($5K min), 3 mo promo rate up to $50K (1.26% stnd) account review
• Incredible Bank - 2.02% Checking ($1K min) account review
• SmartyPig - 2.01% (min $25) withdrawal restrictions, account review
• Redneck/AmericaNet/Evantage Bank - 2.00% (up to $35K, 1% over) account review
• Alliant Credit Union - 2.00% (min $100), account review
• SFGI Direct - 1.85% ($25 min), NOT accepting new customers, account review
• Alliant Credit Union - 1.75% Checking, required direct deposit, account review
• EBSB Direct - 1.67% (min $50K) account review
• Peoples Bank - 1.60% ($10K min) account review
• Newtown Savings Bank - 1.60%, account review
• Wings Financial CU - 1.56% MMA ($5K min) Limited Membership, account review
• Clear Sky Accounts - 1.55% account review
• UFB Direct - 1.55%, account review
• Capital One/Costco - 1.50% InterestPlus Savings ($5K min) quarterly bonuses for $15K+, account review
• First Trade Union Bank - 1.50% ($2.5K min) account review
• Bank of America - 1.50% MMA ($10K min), guaranteed to 4/2010, account review
• ProvidentNJ Direct - 1.50% (min $10K) account review
• Danversbank - 1.50% account review
• Connexus CU - 1.50% MMA (min $20K) (2.00% $100K+) account review
• American Express Bank - 1.50%, account review
• CNB Bank Direct - 1.50% account review
• Bank of Internet - 1.50% (min $100) account review
• Colorado Federal Savings Bank - 1.50% ($2.5K min) account review
• Savings Square - 1.45%, account review
• Capital One - 1.45% InterestPlus Savings ($2.5K min) quarterly bonuses for $15K+, account review
• Nationwide Bank - 1.45% MMA (min $1K) account review
• Bank of Internet - 1.45% MMA (min $100) account review
• Ally Bank - 1.44% Savings account review
• Ally Bank - 1.44% MMA account review
• WTDirect - 1.41% ($10K min), account review
• FNBO Direct - 1.40%, account review
• Grand Yield Direct - 1.40% (min $2.5K) account review
• Hudson City - 1.40% (min $2.5K) account review
• Delta Community CU - 1.40% MMA (min $25K) 1.65% $100K+, account review
• ADB Bank - 1.40% account review
• Bank of Internet - 1.40% Advantage Savings (min $100) account review
• DollarSavingsDirect - 1.40% ($1K min) account review
• Discover Bank - 1.35% Savings (min $500) account review
• CapitalOne/Costco - 1.35% MMA (min $1K, Costco members only, $60 deal for exec. members)
• Bank of American Fork - 1.35% (min $1K) account review
• iGObanking - 1.31%, account review
• AIG Bank - 1.30% MMA (min $10K) account review
• Choice Financial - 1.26% (min $5K), (1.51% $25K+, 1.61% $100K) account review
• 1st Constitution Direct - 1.25% (min $100), 3 mo promo (1.25% $10K+ stnd) account review
• FNCB Bank - 1.25% (min $100) account review
• Zions Bank - 1.25% MMA, outside of Utah, (min $2.5K) account review
• UnivestDirect - 1.25%, (0.25% checking), account review
• Presidential Bank - 1.25% (min $5K, 0.75% over $35K), account review
• Bank Provident Online - 1.25% (min $10) account review
• Wilshire State Bank - 1.25%, chk required (min $500) account review
• OneWest Bank - 1.25% (min $1K) account review
• Salem Five Direct - 1.25% Savings, account review
• United Central Bank - 1.21% MMA (min $5K) (1.35% $75K-$150K) account review
• ING Direct - 1.20%, (0.25% checking), post ($25 bonus)
• HSBC Advance - 1.20% account review
• Capital One - 1.15% MMA, account review
• Union Federal Savings - 1.15% account review
• Intervest National Bank - 1.15% MMA (min $2.5K) account review
• State Farm Bank - 1.15% Checking (min $2.5K) account review
• E-LOAN - 1.10% Savings Plus (min $10K) other requirements, account review
• EmigrantDirect - 1.10%, account review
• Discover Bank - 1.00% MMA (min $2.5K) (1.40% $10K-$100K, 1.50% $100K+) account review

3-Month Certificates of Deposit:

• Best 3-Month CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Danversbank - 1.75% (4 mo) (min $500) account review
• Southeast Financial FCU - 1.10% (min $500) account review
• TotalBank - 1.10% (min $1K) account review
• MetLife Bank - 1.00% (min $25K) account review
• UFB Direct - 0.75% (min $8K)

6-Month Certificates of Deposit:

• Best 6-Month CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• America's CU - 1.75% (7 mo) (min $500) account review
• Southeast Financial FCU - 1.60% (min $500) account review
• Country Bank for Savings - 1.60% (min $500) account review
• Connexus CU - 1.50% (min $500) account review
• Jacksonville Bank - 1.50% (min $1K) account review
• State Bank of India - 1.36% (min $5K) account review
• La Jolla Bank - 1.35% (min $10K), account review
• UFB Direct - 1.33% (min $8K)
• Excel National Bank - 1.32% (min $10K) account review
• Colorado Federal Savings Bank - 1.30% ($5K min) account review
• Century Bank Direct - 1.25% (5 mo) (min $1K) account review
• Ally Bank - 1.25% (min $0) account review
• Ascencia Bank - 1.25% (min $500), account review
• MetLife Bank - 1.10% (min $25K) account review
• ING Direct - 1.00%, account review

9-Month Certificates of Deposit:

• EBSB Direct - 1.77% (10-mo) (min $1K) account review
• Century Bank Direct - 1.50% (10 mo) (min $1K) account review
• OneWest Bank - 1.45% (min $5K) account review
• Doral Bank Direct - 1.40% (min $1K) account review
• Acacia Federal Savings Bank - 1.35% (min $500) account review
• NewDominion Bank - 1.31% (min $3K) account review
• MetLife Bank - 1.20% (min $25K) account review
• Ally Bank - 1.09% (min $0) No-Penalty, account review

12-Month Certificates of Deposit:

• Best One-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Apple FCU - 3.00% IRA-only (14-mo) (min $500) account review
• First City Bank - 2.25% (15-mo) (min $5K) account review
• Alliant Credit Union - 2.10% (min $25K) account review
• Melrose CU - 2.07% (min $5K) account review
• Country Bank for Savings - 2.00% (15-mo) (min $500) account review
• America's CU - 2.00% (13-mo) (min $500) account review
• Southeast Financial FCU - 2.00% (min $500) account review
• Digital CU - 2.00% (14-mo) (min $500) account review
• Golf Savings Bank - 1.90% (15-mo) (min $10K) account review
• Franklin Synergy Bank - 1.90% (min $1K) account review
• Academy Bank - 1.90% (min $500) account review
• Choice Financial - 1.85% (13 mo) (min $5K) add-on feature, account review
• Self-Help CU - 1.82% (min $500) account review
• Delta Community CU - 1.80% (min $1K) account review
• USAA Bank - 1.79% (15-mo) (min $1K) (2.10% $175K min) account review
• BankUnited - 1.75% (min $5K) account review
• Connexus CU - 1.75% (min $500) account review
• Jacksonville Bank - 1.75% (min $1K) account review
• State Bank of India - 1.71% (min $5K) account review
• UFB Direct - 1.71% (min $8K)
• Discover Bank - 1.70% (min $2.5K) account review
• Acacia Federal Savings Bank - 1.70% (min $500) account review
• Century Bank Direct - 1.70% (15-mo) (min $1K) account review
• NewDominion Bank - 1.67% (min $3K) account review
• Colorado Federal Savings Bank - 1.65% ($5K min) account review
• Ally Bank - 1.64% (min $0) account review
• Frontier Bank - 1.60% (min $500) account review
• Northwest FCU - 1.52% (min $500) add-on, account review
• ING Direct - 1.50% (min $1) account review
• Ascencia Bank - 1.50% (min $500), account review
• Geauga Savings Bank - 1.45% (min $1K) account review
• Bank of Internet - 1.40% (min $1K) account review
• Wilshire State Bank - 1.40% (min $10K), liquid features, account review
• Fifth Third - 1.35% (13-mo) (min $5K) not all states, account review
• Consumers CU - 1.25% (15-mo) (min $250) (1.50% $100K+) account review
• HSBC Advance - 1.25% (min $10) account review
• Amboy Direct - 1.10% Add-On (min $10K) account review

18-Month Certificates of Deposit:

• Best 18-Month CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Citibank - 4.07% (min $200) (max $25K) requires secured credit card, account review
• Stonebridge Bank - 2.30% (21-mo) (min $500) account review
• Southeast Financial FCU - 2.11% (min $500) account review
• Alliant Credit Union - 2.10% (min $25K) account review
• Pacific Mercantile Bank - 2.07% IRA-only (min $7.5K) account review
• Academy Bank - 1.90% (min $500) account review
• Century Bank Direct - 1.90% (20 mo) (min $1K) account review
• Discover Bank - 1.80% (min $2.5K), account review
• NewDominion Bank - 1.76% (min $3K) account review
• Ally Bank - 1.73% (min $0) account review
• Colorado Federal Savings Bank - 1.70% ($5K min) account review
• Nationwide Bank - 1.70% (min $500) account review
• DollarSavingsDirect - 1.65% (16-mo) (min $1K) verified by phone on 2/13 account review

24-Month Certificates of Deposit:

• Best Two-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Wings Financial CU - 2.52% (min $500) Limited Membership, account review
• Melrose CU - 2.32% (min $5K) account review
• Atlantic Coast Bank - 2.30% account review
• Hudson City Bank - 2.30% (min $5K) account review
• Country Bank for Savings - 2.25% (min $500) account review
• America's CU - 2.25% (25 mo) (min $500) account review
• Gateway Regional CU - 2.25% (min $1K) restrictions to membership, account review
• Southeast Financial FCU - 2.25% (min $500) account review
• Golf Savings Bank - 2.20% (min $10K) account review
• Jacksonville Bank - 2.20% (min $1K) account review
• Discover Bank - 2.15% (min $2.5K) account review
• State Bank of India - 2.12% (min $5K) account review
• NewDominion Bank - 2.11% (min $3K) account review
• AIG Bank - 2.10% (min $2.5K) account review
• USAA Bank - 2.10% (min $1K) (2.41% $175K min) account review
• Main Street Bank - 2.10% (min $10K) account review
• Tennessee Commerce Bank - 2.10% (min $5K) account review
• ISN Bank - 2.10% (min $1K) account review
• Northrop Grumman FCU - 2.09% (min $40K), account review
• Self-Help CU - 2.07% (min $500) account review
• Northpointe Bank - 2.07% (min $5K) account review
• Ally Bank - 2.05% (min $0) Bump-Up, account review
• Broadway Federal Bank - 2.02% (min $1K) account review
• Northwest FCU - 2.02% (min $500) add-on, account review
• American Express Bank - 2.00% (min $0) account review
• Equity Bank - 1.99% (min $1K) account review

36-Month Certificate of Deposit:

• Best 3-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Wings Financial CU - 3.03% (min $500) Limited Membership, account review
• Pentagon Federal CU - 3.00% (min $1K), account review
• Melrose CU - 2.83% (min $5K) account review
• Hudson City Bank - 2.80% (min $5K) account review
• EBSB Direct - 2.75% (min $1K) account review
• BankUnited - 2.75% (min $5K) account review
• Atlantic Coast Bank - 2.70% account review
• Acacia Federal Savings Bank - 2.65% (min $500) account review
• iGobanking - 2.60% (min $500), account review
• Alliant Credit Union - 2.60% (min $25K) account review
• Air Force FCU - 2.55% (min $25K) membership restrictions account review
• NewDominion Bank - 2.51% (min $3K) account review
• Discover Bank - 2.50% (min $2.5K) account review
• Agriculture FCU - 2.50% (min $1K) account review
• Jacksonville Bank - 2.50% (min $1K) account review
• Northrop Grumman FCU - 2.50% (min $40K), account review
• Ally Bank - 2.49% (min $0) account review
• State Bank of India - 2.47% (min $5K) account review
• Nationwide Bank - 2.40% (min $500) account review

48-Month Certificate of Deposit:

• Best 4-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Pentagon Federal CU - 3.25% (min $1K), account review
• Hudson City Bank - 3.15% (min $5K) account review
• Wings Financial CU - 3.14% (min $500) Limited Membership, account review
• Alliant Credit Union - 3.10% (min $25K) account review
• Melrose CU - 3.09% (min $5K) account review
• National Bank of KC - 3.03% (min $10K) account review
• Apple FCU - 3.00% (min $500) account review
• BankUnited - 3.00% (min $5K) account review
• Acacia Federal Savings Bank - 3.00% (min $500) account review
• Gateway Regional CU - 2.80% (min $1K) restrictions to membership, account review
• USAA Bank - 2.75% (min $1K) (3.06% $175K min) account review
• Third Federal - 2.75% (min $500) account review
• Ally Bank - 2.74% (min $0) account review
• Discover Bank - 2.65% (min $2.5K) account review
• Capital One - 2.50% (min $5K) account review

60-Month Certificate of Deposit:

• Best 5-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Melrose CU - 3.65% (min $5K) account review
• Apple FCU - 3.60% (min $50K) account review
• iGobanking - 3.55% (min $500), account review
• Pentagon Federal CU - 3.50% (min $1K), account review
• Hudson City Bank - 3.40% (min $5K) account review
• Wings Financial CU - 3.39% (min $500) Limited Membership, account review
• EverBank - 3.36% ($1.5K min) account review
• Acacia Federal Savings Bank - 3.30% (min $500) account review
• OneWest Bank - 3.30% (min $5K) account review
• Agriculture FCU - 3.30% (min $1K), account review
• Northwest FCU - 3.30% (min $25K) account review
• Connexus CU - 3.25% (min $1K) account review
• BankUnited - 3.25% (min $5K) account review
• Dime Savings Bank - 3.25% (min $500) account review
• Discover Bank - 3.20% (min $2.5K) account review
• Mountain America CU - 3.20% (min $1K) account review
• State Bank of India - 3.19% (min $5K) account review
• Intervest - 3.15% (min $2.5K), account review
• USAA Bank - 3.15% (min $1K) (3.46% $175K min) account review
• Ally Bank - 3.15% (min $0) account review
• US Bank - 3.10% (59 mo) (min $1K) account review
• Capital One/Costco - 3.05% (min $5K) account review
• Gateway Regional CU - 3.05% (min $1K) restrictions to membership, account review
• Patelco CU - 3.04% ($1K min), account review
• Capital One - 3.00% (min $5K) account review
• Chase Bank - 3.00% (min $10K)

84-Month Certificate of Deposit:

• Navy FCU - 4.25% IRA-only ($20K min) restrictions to membership, account review
• Navy FCU - 4.00% ($20K min) restrictions to membership, account review
• USAA Bank - 3.75% (min $1K) (4.06% $175K min) account review
• Apple FCU - 3.75% (min $50K) (4.00% 10yr) account review
• Pentagon Federal CU - 3.75% (min $1K), account review
• Bank of America DOW - 3.61% (10-yr) (min $1K) account review
• Discover Bank - 3.40% (min $2.5K) (3.70% 10yr) account review
• Capital One/Costco - 3.30% (min $5K) account review
• Third Federal - 3.25% (6-yr) (min $500) account review
• Capital One - 3.25% (min $5K) account review
• Intervest - 3.24% (min $2.5K), account review

Various Deposit Account Deals

• Checking/Savings Account Bonuses
• Best IRA CD rates, local and nationwide deals
• Latest CD and Savings Account Deals with No Major Deposit Limitiations

High Yield Reward Checking Accounts - Open to All

• Reward Checking Accounts Available Nationwide

Recent CD Specials at Local Credit Unions and Banks

• Best Deals and CD Rates by State

Bank Account Alternatives

• GE Interest Plus - 1.90% rate for $50k+
• Vanguard Tax-Exempt Money Market Fund - 0.08% 7-day yield
• Paypal Money Market Fund - 0.05% 7-day yield (1% cashback debit MasterCard)
• Fidelity Money Market Fund - 0.01% 7-day yield (reviews on Fatwallet)
• Vanguard Prime Money Market Fund - 0.02% 7-day yield
• Fidelity Municipal Money Market Fund - 0.01% 7-day yield
• TIAA-CREF Money Market Fund - 0.00% 7-day yield
• FW Thread on Treasury Bills
• I Bonds for 2009, I Bond Article, I Bonds as CD Alternatives

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

It appears we savers in the US are not alone in the world. The British newspaper, The Telegraph, reports on how savers are fighting back in the UK:

Savers are fed up with being punished for their prudence while politicians bend over backwards to seek borrowers' votes - now a new action group aims to get a better deal for depositors and investors.

This action group is called Save Our Savers and here are some excerpts from their front page which describes their goals:

Time and again in recent decades, we savers have been punished in our efforts to provide for the future. Despite the clear economic and social benefits of a thriving savings culture, successive governments have obstructed, neglected, and at times directly attacked the interests of responsible savers.

[...]

Save Our Savers offers prudent, forward-looking savers the chance to fight back. We are an independent action group set up by savers for savers.

Our mission is to force policymakers to recognise the vital importance of saving and to encourage the efforts of every saver to support themselves.

Perhaps the United States needs a Save Our Savers organization?

On Thursday I described two of my ideas of tax policy changes that could help US savers and retirees. A few tax policy changes may help a little, but it'll probably take a movement like Save Our Savers to have a chance at making long-term meaningful changes.

EverBank continues to offer a very competitive rate on a 5-year CD. The rate has fallen a little this week, but it remains one of the top for a nationwide 5-year CD. The 5-year rate is currently 3.36% APY. The shorter-term rates are not quite as competitive. The better ones include a 2.02% APY 24-month CD and a 1.55% APY 12-month CD. These rates are listed in EverBank's Yield Pledge CD page as of 2/13/2010. Minimum deposit is $1,500.

One positive aspect of EverBank is that they offer several types of accounts in addition to just individual and joint accounts. These include custodial, trust and IRAs. In addition, the application allows you to designate POD beneficiaries. Not too many internet banks offer all of these options.

One downside with EverBank Yield Pledge CDs is a harsh early withdrawal penalty. According to the Truth in Savings disclosure, the early withdrawal penalty is "one-fourth of the total interest that would have been earned on the principal balance of the account if funds had not been withdrawn prior to the maturity date." However, interest can be withdrawn penalty free (which is common for all banks). I don't see any limitation in the disclosure about EverBank having the right to refuse an early withdrawal. The only thing I see is this:

As authorized by federal law, we reserve the right at any time to require not less than seven-days’ notice in writing before each withdrawal from this account.

If you are worried about inflation forcing rates much higher over the next couple of years, a CD's early withdrawal policy and penalty are important factors to consider. The bank with the best early withdrawal policy is currently Ally Bank which only has a 60-day interest penalty (see my Ally Bank review).

EverBank CDARS

One important note about the disclosure is that the first half of the CD disclosure is specific to EverBank's CDARS which they call Insured Advantage CD. The early withdrawal penalty for the 5-year Insured Advantage CD is 900 days of interest. CDARS can be convenient for those with savings way over the FDIC limits. CDARS allows you to get FDIC insurance coverage on deposits up to $50 million. The downside is lower rates. As of 2/13/2010, the CDARS rates range from 0.75% for the 1-year term to 1.83% for the 3-year term.

EverBank's World Currency CDs

For those who are very worried about inflation and the weakening dollar, you may want to look into EverBank's World Currency CDs. Note, you can lose money in these due to risks associated with currency fluctuations. I described what happen to EverBank's Iceland CDs in this post. For more details on these World Currency CDs, please refer to my World Currency CD post.

EverBank's Checking and Money Market Account Promotion

EverBank continues to have a nice 3-month intro rate for both its checking and money market account. The 3-month bonus rate is 2.25% as of 2/13/2010. For the FreeNet Checking account the 3-month bonus rate applies to balances up to $100K. For the Yield Pledge Money Market account the 3-month bonus rate applies to balances up to $50K.

The nice thing about the FreeNet Checking is that it has no monthly fees regardless of balance unless you have the optional Online Bill Pay. In that case you have to maintain a minimum average monthly balance of at least $5,000. Otherwise a $8.95 monthly fee is assessed for Online Bill Pay.

The downside with the money market account is a monthly fee if your balance is under $5,000.

After the 3-month intro, the standard rates will apply. The standard money market rate as of 2/13/2010 is 1.26% APY. To see how EverBank comes up with a first-year APY of 1.51%, refer to the bottom of my June EverBank review. It's a little complicated.

I have more details about EverBank accounts in my June 2009 EverBank review post.

One thing that has recently changed is that the intro-rate promotion is no longer limited to new customers. According to the CSR, the only limitation is the one per household limit. So you could open the checking first with the 3-mo intro rate followed by the money market account with another 3-mo intro rate. Also, if you already had CDs with EverBank, that doesn't affect your qualification for the intro rate.

Account Application

According to the CSR, you'll need to print out the signature card when you complete the online application. You can fund a new account with a check or wire transfer. An ACH transfer is a potential option, but according to the CSR, not everyone may qualify for this option (not sure of the details). For CDs, I was told that the CD rate locks at the time you submit the application. You then have 30 days for them to receive your funds to guarantee the rate when you applied. When CDs mature, they require written instructions to close the CD, but they allow this to be done via secure email.

In the past, readers have warned about a slow new-account opening process. So for the liquid accounts, it may be wise to avoid funding the account with a large initial deposit.

Another downside in the application is a hard credit inquiry. EverBank has a detailed description of their credit inquiry in the online application. I was told they do a hard credit inquiry via Experian that may temporarily ding your credit score. Readers have also mentioned this in the comments.

Bank Overview

EverBank has been a FDIC member since 1998 (FDIC Certificate # 34775). It's one of the larger internet banks with $7.7 billion in assets. EverBank's Bankrate rating is down one star since my June post. It's now 3 stars (performing). It continues to be 4 stars (excellent) at BauerFinancial. Both ratings are based on 9/30/09 financial data.

Workmen's Circle Credit Union is offering some very competitive short- and mid-term CD rates. The rates listed in the credit union's CD rate table as of 2/13/2010 include:

• 2.01% APY 6 month CD
• 2.50% APY 12, 15 and 24 month CD

Minimum initial deposit is $5,000. There is a 30 day interest penalty for early withdrawal. CDs are available for business, personal and IRA accounts.

The credit union also has a very competitive money market account. It's a tiered-rate account with top rates for balances over $20K. The rates listed in the credit union's savings and MMA table as of 2/13/2010 include:

• 2.25% APY $20K-$50K
• 2.50% APY $50K-$100K
• 2.60% APY $100K-$500K

Membership is open to those who live or work in Chatham County, Georgia with one exception. You may not qualify if you are eligible for membership at another occupational credit union within Chatham County. I'm not sure exactly what is meant by this. Refer to the credit union's membership page for the full details.

It's a small credit union with one office located in Savannah, Georgia.

The credit union's ratings for safety and soundness are strong: 5 stars (superior) at BauerFinancial and 4 stars (sound) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The credit union is federally insured by the NCUA (Charter # 67892).

Discover Bank will be launching its new Account Center on Sunday, February 14, 2010. For those who were informed by ETrade Bank that your savings accounts will be transferred to Discover Bank, this new Account Center will provide many of the features you had with ETrade Bank. Here's an example of what the new Account Center will look like:

A couple of weeks ago Discover Bank gave me a preview of the new Account Center. Also, I opened a Discover Bank savings account, and I was able to give the new Account Center a try. It's more than just a cosmetic change. The functionality has greatly improved. One example is their ACH funds transfer service. Instead of having to transfer money through MoneyHQ, Discover has integrated the funds transfer service into the new Account Center. Here's an overview of this new ACH transfer service:

• Maximum number of external accounts that can be linked will be 30
• Linking external accounts can be done with either instant verification (about 50% of banks are available) or with trial deposits
• For Money Market and Online Savings Accounts, funds transfer limits will be $50K inbound and $50K outbound per month
• Transfers for external accounts will typically take 3 business days (see my experience below)
• You can schedule both one-time and recurring transfers

I gave the ACH transfer service a try last Sunday. I first needed to link an external account. Since I was in a hurry, I decided to use instant verification to set up the link. You can also use the trial deposit method which I prefer since you don't have to provide your external login information. Even though Discover and other banks that offer instant verification say that they don't keep this info, I never like to disclose my login info. The instant verification worked fine with my Capital One checking account. I then initiated an outbound transfer.

When I initiated the outbound transfer, the site informed me that the transfer would complete on Thursday (this was Sunday evening). I checked my Capital One account on Wednesday, and it was still not shown. I logged in on Thursday morning, and the transfer was credited. At my Discover account, the transfer was debited from the account on Tuesday. I probably could have initiated the transfer Monday and it would have still completed by Thursday. Nevertheless, the transfer was a little slow compared to other online banks like Ally Bank and Etrade. When I initiate transfers at Ally on Sundays, they are typically credited on Tuesdays. Next week I'll do some more transfer tests and include an inbound transfer.

I was told that transfers should complete within 3 business days. For a one-time external transfer, if it is submitted before 8:00pm, the process will start same day. If it's submitted after 8:00pm, it will begin the next day.

Another Account Center feature that caught my eye is the Account Title Page (notice the view account title link in the image above). This page includes your POD beneficiaries so you'll know that the PODs are set up in the account title to allow you to increase your FDIC coverage. In the preview I was told that this Account Title Page should meet the FDIC's definition of account title.

The new Account Center will still be missing some functionality when it's first released. One missing feature will be an easy new account interface to allow you to open new accounts like CDs without entering all of your personal info. I was told this new account interface and new CD account management options (for interest distribution and renewal settings) should be released later in 2010. Some other features to be added later in 2010 include secure email, paperless statements and account alerts. Note, the new Account Center on February 14th will allow customers to access their statements online in PDF format. The paperless statements refer to allowing customers to disable paper statements from being mailed to their home address.

I'm glad to see Discover Bank making this improvement. In my opinion, this new Account Center puts them on par with Ally Bank and ING Direct. I'm a little disappointed that the transfers aren't faster. Also, the recent savings account rate cut was also a disappointment. The rate fell from 1.60% to 1.35% APY. Discover had kept the savings account rate very competitive since it launched the account in the summer of 2009. As some readers noted, existing savings account customers were upgraded to the Premium Savings Account which kept the 1.60% APY (it's actually 1.59%). All other features of the Premium Savings Account will be the same as the Online Savings Account. Only the Online Savings Account is available to new customers.

Edit 10:00pm 2/12/10: Added "per month" in the $50K transfer limit. Also added note regarding paperless statements.

In the last few days I've seen more commentary on this issue of how the government should not forget savers and retirees who are having to deal with record low interest rates. Here's an excerpt from a recent commentary from MarketWatch's chief economist:

Since the banks are apparently in good financial shape, it's time for the Fed to consider the needs of the silent majority -- the nation's savers -- and raise rates so that they can become healthy, too

I published Notices of two related articles over the weekend from the Boston Globe. The first article described the difficult environment that exists for those who live off their interest income:

With significant rate hikes probably a long way off, conservative investors face a difficult choice: Cope with reduced income or choose riskier options with potential for better gains.

The other Boston Globe article was a commentary that suggested three tax policy changes that would encourage more saving and discourage debt. The author also noted the problem with our current system:

our totally unrepentant financial system is being rebuilt while savers are punished with yields that guarantee their savings will lose purchasing power.

His three suggestions would definitely help lower the tax burdens for savers and retirees. However, I'm not sure if they would have a chance of getting broad support. Wouldn't it be better to push for a small change that could at least have a realistic chance of receiving broad support?

With the idea of a small change with some chance of getting broad support, I came up with two small tax policy changes of my own:

1. Remove the qualifying income requirement for IRA contributions - Currently, only compensation income is allowed for IRA contributions. This would be an easy way to help retirees. They would be able to contribute to Roth accounts with money from either their pensions or interest income. For Roth accounts, that money would then grow tax free.
2. Start a Tax-Free Savings Account (TFSA) program - Canada started a TFSA in January 2009. It's like a Roth account in that any interest or gains is tax free. Unlike a Roth account, it's not just to help people with retirement savings. Money can then be withdrawn at any point of time, without penalty. It shouldn't have a major impact on tax revenue since there's a cap of $5K per year in contributions (will be indexed with inflation).

The above ideas are not major changes, but they would encourage savings and at least give a little reward to savers. They're practical in that they wouldn't be a major hit on tax revenue. Do you think they would have a chance? Do you have any suggestions? If you do, please share them in the comments.

Fibre Credit Union is offering a high-yield reward checking account called Choice Checking. The account offers the following rates and features if certain monthly requirements are met:

• 3.25% APY on balances up to $20,000
• 0.90% APY on the portion of your balance above $20,000
• 0.10% base rate if requirements are not met
• Refunds your ATM fees nationwide

Monthly requirements include:

• 12 debit card purchases
• 1 Direct Deposit or automatic payment or make one credit card purchase
• Receive electronic statements

Additional features of this account include:

• $5 minimum initial deposit
• No monthly service fee
• No minimum balance

Membership is open to those who live, work, worship, or go to school in Cowlitz County, Washington. Refer to the credit union's about us page for more details.

Branches are located in the Washington cities of Longview, Kelso, Castle Rock, Woodland and Kalama.

The credit union's ratings for safety and soundness are strong: 5 stars (superior) at BauerFinancial and 4 stars (sound) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The credit union is federally insured by the NCUA (Charter # 2191).

Other High-Yield Reward Checking Accounts

Fibre Credit Union is the first reward checking account that I've seen to include a credit card purchase as part of the monthly requirements. The debit card usage is still required, but the credit card purchase can be used to replace the direct deposit requirement.

Refer to the reward checking section of DepositAccounts.com to find reward checking accounts in your area or that are available around the nation.

Community Trust Credit Union is offering some competitive CD and IRA CD rates. These include a 2.07% APY 12-month CD, a 2.17% APY 18-month CD and a 2.33% APY 24-month CD. Minimum deposit is $2,500. These rates are listed in the credit union's rates page as of the morning of 2/11/2010.

I have a feeling these rates won't last much longer. This credit union is a division of Self-Help Federal Credit Union which just recently lowered its 12-month and 24-month CD rates last week. However, Community Trust's CDs have some differences so they may not be in lock-step with SHFCU.

Like the SHFCU, membership is open to anyone who joins the Center for Community Self-Help. Refer to the credit union's membership eligibility page for more details.

Branches are located in the California cities of San Jose, Bakersfield, East Palo Alto, Lamont, Modesto, Porterville and Riverbank.

For more info on Community Trust's parent, Self-Help Federal Credit Union, refer to my last SHFCU review. SHFCU is federally insured by the NCUA (Charter # 24802).

Velocity Credit Union's Board of Directors has changed its mind regarding the switch from NCUA to ASI deposit insurance. Velocity's president issued a letter to the members yesterday. Here are excerpts of the letter:

We are writing today to let you know that our Board of Directors has decided not to switch to ASI. We have informed both ASI and NCUA of our decision to remain with NCUA.

[....]

Unfortunately, on the final day of our member vote, ASI announced an assessment of their credit unions for the exact amount of the NCUA assessment: 0.15% of each credit union’s deposits. (This assessment did not include Velocity.)

Frankly, we were surprised and disturbed by the timing of ASI’s announcement and by their decision to assess the credit unions they serve. Given ASI’s surprise assessment, we have reconsidered our recommendation to convert to the private insurer.

This was a surprise to me since Velocity's board and management were heavily advocating for this switch, and the credit union members voted in favor in late December.

The ASI assessment should not have been a big surprise. When I first reported on Velocity Credit Union's plan to switch in September, I described the financial problems of a major ASI-only credit union in Nevada. Velocity's president claimed that they "conducted vigorous due diligence with ASI" before the decision to switch.

According to this Austin Statesman article "the cost of the voting process, including mailing ballots to members and hiring an independent tabulator, was $187,000." So this was a costly mistake.

Even though money was wasted, I'm sure many Velocity members will be glad their deposits will remain federally insured via the NCUA. It'll make my life easier when I report on Velocity's CD deals. I won't have to worry about warning readers that the credit union is not federally insured. So those who may have avoided Velocity, may now want to reconsider their latest CD special which was recently extended to last through February (see review).

Thanks to the readers who emailed me and commented on this news.

For more information on the private ASI deposit insurance and which credit unions are eligible to switch from NCUA to ASI insurance, refer to my ASI review.

The Fed released Bernanke's prepared statements this morning that were intended to describe the Fed's exit strategy to the House Financial Services Committee. The statements were released to the public even though the blizzard prevented the committee meeting to take place. Here's how Bernanke summarized his statement

we have been working to ensure that we have the tools to reverse, at the appropriate time, the currently very high degree of monetary stimulus. We have full confidence that, when the time comes, we will be ready to do so

These tools to reverse the high degree of monetary stimulus were described in detail. One tool mentioned was the discount rate which they seem intent to raise before the Fed funds rate:

before long, we expect to consider a modest increase in the spread between the discount rate and the target federal funds rate.

However, as this BestCashCow describes, the discount rate is "not as influential as the Fed Funds rate in impacting short term deposit and bond rates."

Bernanke repeated the same line about keeping rates low for an extended period:

The FOMC anticipates that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.

Are there any signs about when interest rates will rise? Below are some opinions:

From AP News:

Bernanke repeated the Fed's pledge to hold rates at record lows for an "extended period." Economists think that means for at least six more months. But Bernanke cautioned that the Fed eventually will need to raise rates to ease inflationary pressures.

From Calculated Risk Blog

It is unlikely that the Fed will raise the Fed Funds rate any time soon (very unlikely this year, and maybe not in 2011).

However the Fed might use an alternative short term interest rate - such as interest rate paid on reserves - to communicate policy.

Digital Credit Union is offering a special 14-month certificate with a 2.00% APY. Minimum deposit is $500. It's also available in an IRA. The CD is listed in the DCU's special offers page as of 2/10/2010.

Every now and then DCU comes out with a nice CD special. The last one was in October when DCU was offering 2% for a 9-month term. You can see the interest rate environment has continued to worsen since October.

Anyone can join DCU via membership in an association. Refer to this credit union page for the list of associations. The least expensive membership is $10 for joining Reach Out for Schools. You can be immediately eligible to join DCU if you live, work, worship or attend school in parts of Georgia and Massachusetts. Refer to the Join DCU page for the full details.

In the instructions for joining DCU there are links to an online membership application and a PDF application. A reader who commented on his experience with the online application in my DCU post from 2008 provided the instructions he received from DCU after he applied:

In order to continue processing your application, please mail a $5 check or money order payable to DCU to fund your membership.

If you have joined through a sponsoring organization, then please make sure to also include funds to cover that organization's membership fee.

Also, please mail a copy of your driver's license or passport. If sending a passport, or if your license does not show your current address, please also send either a utility bill in your name (electric, gas, home telephone) or a copy of your apartment lease agreement. If you have listed a Joint Owner on your application, that person must also send the required ID and address proof.

Please note, we do not accept cell phone bills, bank statements, credit card statements or pay statements as address verification.

Make sure to check with the credit union for the latest instructions. One downside to joining is a potential hard credit inquiry (which can temporarily ding your credit score). Here's what a commenter mentioned in my August 2008 DCU post:

I also have been a five-year DCU member, holding several jumbo CDs with them. Yet, when I added checking to my account this past January, they ran a check on me through Equifax!

Branches are located throughout Massachusetts, in Hudson, Merrimack and Nashua in New Hampshire, in Colorado Springs, Colorado and in Alpharetta, Georgia.

DCU's rating for safety and soundness has gone down from 3 stars to 2 stars (below peer group) at Bankrate.com since my October post. DCU continues to be rated as 3 stars (adequate) at BauerFinancial. Both ratings are based on 9/30/09 financial data. DCU is federally insured by the NCUA (Charter # 23521). It's a large credit union with $4.2 billion in assets and 376,824 members.

Other Competitive Certificate of Deposit Rates

• CD rates at DepositAccounts.com
• My weekly list of hot nationwide and local CD deals

NexBank did something you don't see much of these days. They raised the rate of their 24-month add-on CD. It's now 2.40% APY. When I last reported on this CD in December, it was 2.25%. Minimum deposit is $10,000. The rate is listed at the bank's promotion page as of 2/10/2010. Additional deposits of $10,000 or more are allowed anytime. There's also a bump feature which is typically less useful. It allows customers to bump-up the rate once per a 12-month period to the rate of NexBank's current 24-month CD offering.

In addition to this add-on CD, the bank has some competitive rates on its standard CDs including a 2.00% APY 18-month CD and a 1.85% APY 12-month CD. Minimum deposit is $10,000. These rates are listed at the bank's rates page as of 2/10/2010.

There's an online application (link on the left side of CD page). However, the application form only allows the state of Texas to be specified. At the top of the application it states that "if you work in Texas and reside outside of Texas please contact us." So it appears to be limited to those who live or work in Texas.

Branches are located in Dallas and Plano, Texas.

NexBank's ratings for safety and soundness continue to be a little weak: 2 stars (problematic) at BauerFinancial and 2 stars (below peer group) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 1934 (FDIC Certificate # 29209). Another thing to note about this bank is that it's operating under a FDIC Cease and Desist Order.

Other Competitive Certificate of Deposit Rates

• CD rates at DepositAccounts.com
• My weekly list of hot nationwide and local CD deals

ETrade Bank just sent an email to its Complete Savings Account customers informing them that their accounts will be transferred to Discover Bank, and become a Discover Online Savings Account. Here's an excerpt from the email

We are writing to let you know that your E*TRADE Bank account referenced above will soon be transferred to Discover Bank, and become a Discover Online Savings Account. This follows our plan to focus more exclusively on providing optimal investing solutions to our customers. We expect the transfer to occur on or about March 7, 2010.

As I mentioned yesterday about ETrades's Super Bowl commercials, ETrade is trying to shrink its banking business. I guess slashing rates wasn't enough.

For those who may be concerned about Discover Bank and its online savings account, you'll be happy to know that Discover Bank will be soon releasing a major upgrade to their online banking system. It's scheduled to go live February 14th. I was recently given an overview of their new system. Also, I've been able to give their system a try with my own Discover account. It's definitely a major improvement, and it puts them on par with Ally and ING Direct. I'll have a review of Discover Bank's new online system in the next couple of days.

Discover Bank has long had an online money market account. However, the online savings account was only added last summer. The rate had remained very competitive until last week when the rate dropped for new customers from 1.60% to 1.35% APY.

Thanks to the readers who commented on this news and sent me emails.

Metro Phoenix Bank is offering some competitive mid- and long-term CD rates:

• 2.52% APY 24-month CD
• 2.78% APY 36-month CD
• 3.03% APY 48-month CD
• 3.54% APY 60-month CD

These rates are listed in the bank's rate sheet as of 2/09/2010. Minimum deposit is $5,000 ($2,000 for IRAs). The CD rates for terms of one year and less are not quite as competitive.

At first I thought their money market rate was also competitive with a 1.56% APY, but after a closer look, I realized this was the rate for a tier of $1M and above. Balances from $100K to $1M only receive 1.16% APY. I wonder how many people hold $1M+ in their money market accounts? If you do, you may want to consider United Central Bank (see review).

Metro Phoenix Bank is a small one-office bank located in Phoenix, Arizona.

Its ratings for safety and soundness are average: 3 stars (adequate) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 2007 (FDIC Certificate # 58402).

Update 4/04/10: The top rate has fallen to 3.26% APY. Please refer to the bottom of the post for the rate history.

HCSB, A State Banking Association is offering a high-yield reward checking account called HCSB Reward Checking. The account offers the following rates and features if certain monthly requirements are met:

• 3.26% APY on balances up to $25,000
• 1.01% APY on the portion of your balance above $25,000
• 0.05% base rate if requirements are not met
• Refunds ATM Fees up to $20 per cycle

Monthly requirements include:

• 12 debit card purchases
• 1 Direct Deposit or ACH auto debit
• Receive electronic statements

Additional features of this account include:

• $100 minimum initial deposit
• No monthly service fee
• No minimum balance
• Free online Bill Pay

I was told by a bank rep that a branch visit is currently required to open an account. However, they are working on a project that will allow them to accept applications from outside their typical market area. Update 3/09/2010: I've been notified by a HCSB's representative that the account is now available nationwide on CheckingFinder.com. The application is available at this CheckingFinder.com page.

Branches are located in the northwest Texas cities of Plainview, Tulia and Hart, and in the Texas Hill Country cities of Kerrville and Fredericksburg.

The bank's ratings for safety and soundness are a little above average: 3½ stars (good) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 1934 (FDIC Certificate # 14562).

Make sure you don't get this bank confused with HSBC. Their official name is HCSB, but to avoid confusion I included "a State Banking Association" like they have on their website. The bank's About page describes where the name HCSB comes from:

Originally chartered under the name of Hale County State Bank in West Texas and later doing business as Hill Country State Bank in the Texas Hill Country

Other High-Yield Reward Checking Accounts

One nice thing about HCSB's reward checking account is that the rate for balances over $25K is fairly competitive at 1.51%. In fact, it's getting hard to find this rate on internet savings accounts.

Refer to the reward checking section of DepositAccounts.com to find reward checking accounts in your area or that are available around the nation.

Rate History:
3.26% APY up to $25K; 1.01% over; 0.05% base
3.51% APY up to $25K; 1.51% over; 0.05% base

A checking account is one type of bank account that is pretty much required for everyone. With internet checking and reward checking, how should one go about choosing a checking account these days? Jim at Bargaineering suggests a process to review your options at both credit unions and at the giant banks. I'm not sure if there's a reason to consider the major banks (unless you just want a sign-up bonus). Your local community banks and credit unions along with internet banks should provide you with the best checking account options. I do think it makes sense to consider having at least two checking accounts: one local and one internet. Here's a process to help you find the best local and internet checking accounts.

Local Checking is Required?

I don't see any reason not to have a checking account at a local bank or credit union. You can always open an additional internet checking or savings account for higher interest rates, free checks, more ATM choices or for other reasons. Having a checking account at a local bank can make it easier to make deposits and take care over banking needs. Yes, some banks allow remote deposits and ATM deposits. So one could definitely live without a local checking account, but unless you don't have any free local choices or if you are really intent to keep your life simple with one checking account, why limit yourself?

Finding the Best Local Checking Account

One thing important to note is that most reward checking accounts are also free checking accounts even if you don't meet the monthly requirements. So if you have a choice between a local free checking account and a local reward checking account, there's little reason not to choose the reward checking.

If there are no reward checking accounts being offered by banks or credit unions in your area, then the next best option in my opinion would be a free checking account at a local credit union or community bank. Refer to this post on finding local credit unions. As I mentioned in that post, many credit unions belong to networks that can give you free nationwide ATM and branch access. However, one reader did have a good point that shared branches often have more limitations on withdrawals and other transactions as compared to your own credit union or bank branch.

Internet Checking

If you have a free and convenient local checking account, there's no reason why you can't look for an internet checking account if you want higher interest, free checks and/or free ATM use. If you don't have a local reward checking account, there are still many high-yield reward checking accounts available nationwide. In addition to high interest, many offer refunds of ATM fees. Like the high interest, ATM fee refunds typically require meeting the monthly requirements.

If you don't want to worry about using your debit card each month to meet the reward checking requirements, an internet checking account is an alternative.

The best checking rate currently being offered by a nationwide non-reward internet checking account is at Incredible Bank which is still offering 2.02% APY as of 2/09/2010 (see review).

One thing to note about Incredible Bank's checking is that it doesn't offer paper checks. If you have a free local checking account, this may not be a big deal. ING Direct and HSBC Direct also offer paper-less checking accounts but the rates are much lower.

If you want paper checks and high interest, Alliant Credit Union's checking is a good option (see review).

Ally Bank's new checking account doesn't match Alliant's in terms of rates, but it does offer free paper checks and free ATM use (see review).

You can compare interest rates of reward checking accounts, internet checking accounts and local checking accounts at the checking account section of DepositAccounts.com

United Commerce Bank is offering some competitive CD specials:

• 2.00% APY 10-month CD
• 2.25% APY 25-month CD or IRA CD
• 3.00% APY 30-month CD or IRA CD

Minimum deposit is $500. These rates are listed in the bank's rates page as of 2/09/2010.

It appears that a branch visit is required to open an account. Branches are located in Bloomington, Indiana.

The bank's ratings for safety and soundness are above average: 4 stars (excellent) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 2000 (FDIC Certificate # 35306).

Thanks to the reader who emailed me news of these CD specials.

First Choice Credit Union is offering a 4.25% APY CD special. The downside is that it's a 10-year term. However, it has some liquid features that may ease your mind about locking into this very long term. First, it allows additional deposits. There is a limit of $25,000 which is the maximum amount you can have in this CD per member. Minimum deposit is $1,000. The second flexible feature is that it allows a penalty-free withdrawal each year of 20% of the balance. The credit union's promotions page lists the 4.25% APY and the account details as of 2/09/2010.

I emailed the credit union with some additional questions. According to the CSR, the 10 year CD is paid out on a quarterly basis. It can be deposited into your savings account instead of rolling over. They currently don't have an end date and expect to be offering this for a while.

Membership is open to anyone who lives or works in Palm County, Florida. Also eligible are all employees and retirees of the Federal Government and veterans of any branch of the service living in one of several Southeast Florida counties. Please refer to the credit union's membership page for the full details.

The credit union's ratings for safety and soundness are a little weak: 3 stars (adequate) at BauerFinancial and 1 star (lowest) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The credit union is federally insured by the NCUA (Charter # 67725).

ETrade advertised heavily in yesterday's Super Bowl. They came out with more of those talking baby commercials. Did you notice that they didn't mention ETrade Bank? As you can probably tell just by looking at ETrade Bank rates, all the focus is on their brokerage and not the bank. ETrade has mentioned this in their quarterly results. Here's what MarketWatch reported after ETrade released its latest quarterly results:

E-Trade built a banking business too and this part of the company has suffered as the housing crisis left it with big mortgage-related losses. E-Trade is now trying to shrink its banking business to focus on its main brokerage unit.

Based on ETrade Bank's deposit rates, they should be doing a good job at shrinking their banking business. Their 3-month CD is currently paying an extremely low 0.01%. That's one-hundredth of a percent! Even their 5-year CD rate is very low at 1.10%. I hope no one is letting their CDs automatically renew.

ETrade Bank's Complete Savings Account used to be a very competitive online savings account, but that changed in 2009. By May 2009 the rate had fallen to below 1%, and by October the rate had fallen to its current level of 0.50%. As a comparison, ING Direct's Orange Savings Account (which has never been a rate leader) is currently 1.20% APY.

What's disappointing is that ETrade Bank has lots of nice internet banking features such as its ACH bank-to-bank transfer service which it calls Quick Transfer. The transfers are fast, they don't place small limits on the amount that can be transfered and it's easy manage links to the external accounts (although there is an issue with a lifetime limit on the links). So I'm sorry to see ETrade give up in keeping competitive rates.

I was glad yesterday's Super Bowl wasn't a blow-out. I remember many past Super Bowls when the game was won by the third quarter, and for the rest of game the teams basically gave up competing. Watching ETrade Bank reminds me of watching the last quarters of those past Super Bowls.

Edit: fixed some typos

Stonebridge Bank has a new 21-month CD special with a 2.30% APY. There's also a special 14-month CD with a 1.80% APY. Minimum deposit is $500. These are also available in an IRA. These rates are listed in the bank's Certificate of Deposit Page as of 2/08/2010.

There's an online application, and according to this FAQ page, people from any state can apply. Some of the important CD details listed in the FAQ pages and in the disclosure include:

• Interest will be compounded every day. Interest will be credited to your account every month
• Early withdrawal penalty is 90 days of interest for terms under 12 months, 180 days for terms from 12 to 36 months.
• 10 calendar grace period at maturity
• CD can be funded by check or wire transfer (can't be done by ACH)
• Incoming wire transfers are free. Outbound domestic wire transfers cost $20

I also received a few additional details from the CSR when I called their toll free number (800-807-1666) in 2008:

• The CD rate locks only when they receive the funds
• They require written instructions if you want to close the CD at maturity
• At maturity, they can mail you a check or they can wire transfer the funds ($20 fee)

Stonebridge Bank also has some decent money market and checking accounts. The Premier Money Market Account has a 1.25% APY on all balances as of 2/08/2010. Minimum balance of $1,000 is required to avoid a $10 monthly fee.

Stonebridge Bank's financial ratings for safety and soundness have gone down a bit since my last post in September. Their current ratings are a little weak: 3 stars (adequate) at BauerFinancial and 2 stars (below peer group) at Bankrate.com. Both ratings are based on 9/30/09 financial data.

Stonebridge Bank is based in Pennsylvania with branches in Blue Bell, Warminster, Exton and West Chester. The bank has been a FDIC member since 1999 (FDIC Certificate # 35077).

S-Bank is having a grand opening 9-month CD special with a very competitive rate of 2.33% APY. Minimum deposit is $1,000, and the maximum is $250,000. It's only available on February 12 and 13, 2010. This special doesn't appear to be listed at the bank's website. It was recently advertised in a Boston newspaper. The ad is available online here.

Even though it's a grand opening special, the special CD is available at all three of the bank's branches which are located in Weymouth, Quincy and East Bridgewater.

The bank also has a competitive yield on the top tier of its money market account: 2.00% APY on balances from $75K to $2M as of 2/07/2010.

S-Bank's ratings for safety and soundness are above average: 4 stars (excellent) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 1986 (FDIC Certificate # 26575).

Sovereign Bank is offering a checking and money market promotion in which you can earn a bonus of $150 and receive a 1.50% APY guarantee for 3 months in the money market account. The promo is scheduled to expire 3/13/2010. Here's the promo page link.

First, here are the requirements for the $150 checking account bonus:

• Open a new Sovereign Premier Checking, Business Owner Premier Checking, Interest Checking, or Partnership Checking account by March 13, 2010, with a minimum opening deposit of $100
• Open any Sovereign savings or money market savings account with a minimum opening deposit of $100 or already have a savings or money market savings account
• Enroll in Online Banking at account opening
• Set up and receive one direct deposit within 60 days of opening your account
• Request a Sovereign Debit Card and make 5 Debit Card purchases within 60 days after you open your account

When you qualify, you will receive a credit of $150 to your new checking account within 75 days after you open your checking account.

Some important small print:

• Offer available only to residents in the following states: ME, VT, NH, CT, RI, MA, NY, NJ, PA, MV, MD, DE, and District of Columbia.
• Direct deposits you initiate from an account at another bank do not qualify
• The amount of the bonus credited to your account will be reported to the IRS as interest
• Current personal checking customers or anyone who has had a personal checking account with Sovereign Bank in the last 6 months are not eligible for this offer.
• Current savings customers are eligible

An important note regarding the Interest Checking is that direct deposit is required to avoid a $10 monthly fee. On the plus side is that they provide free checks. The Premier Checking is even worse in terms of potential fees. A $15,000 combined balance is required to avoid a $30/month fee. For the savings accounts, the Money Market Savings appears to be a good choice since it has no monthly maintenance fee and no minimum balance requirement. Note, the monthly fees and minimum balance vary considerably based on your state.

Here are the requirements to qualify for 1.50% APY for 3 months:

• Open a new Premier Checking account and open a new Premier Money Market Savings account by March 13, 2010
• Bonus rate will apply for each day your balance is $10,000 to $499,999 and is guaranteed for 3 months from the date you open your account

Some important small print:

• Same geographic restriction as mentioned above
• Anyone who has had a Sovereign savings, money market savings, or personal checking account with Sovereign in the last 6 months are not eligible for the bonus rate

Unlike the checking account promotion, this requires a Premier Money Market Savings account. Details of this account are in the promo page (click more for this account in the promo page). The Premier Money Savings is free of minimum balance requirements and has no monthly fees as long as you have a Premier Checking account (which, as I mentioned, has its own fees)

When I called Sovereign Bank in April 2008 regarding a similar promotion, I was told that there's no account closure fee if an account is closed after 90 days. Otherwise, it's $25. The CSR also said they don't perform a hard credit inquiry. They just use ChexSystem in the application.

There's an online application link in the promo page. However, the small print states that residential addresses must be located in the northeast states (see above).

Branches are located in the Northeast in the states of Connecticut, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania and Rhode Island. The bank is a FDIC member (FDIC Certificate # 29950).

Other Bank Bonuses

Refer to the Bank Bonus page for the other bonuses at banks and credit unions around the nation.

Stillwater National Bank is advertising a competitive CD rate of 2.00% APY for a 15-month term. Minimum deposit is $5,000. This special doesn't seem to be listed at the bank's website. It was advertised in today's (2/07/2010) Oklahoma City newspaper. The ad is available online here.

It appears a branch visit is required. The ad lists branches in Oklahoma City and Edmond. The bank has many other branches in Kansas and Texas, but these special CDs may be specific to the Oklahoma branches.

My last post on this bank was on December when the bank was offering the same 2% APY but on a shorter term (11 months).

The bank's ratings for safety and soundness continue to be fair: 3 stars (performing) at Bankrate.com and 3½ stars (good) at BauerFinancial. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 1934 (FDIC Certificate # 4201).

Triad Bank is offering a special 2.05% APY 12-month CD. Minimum deposit is $10,000. This special doesn't appear to be listed at the bank's website. It was advertised in today's (2/07/2010) St. Louis Post-Dispatch newspaper. The ad is available online here.

This is a very similar promotion that the bank was offering in March 2009 when this 12-month CD yield was 3.05%. You can see how much rates have fallen since then.

It appears that a branch visit is required to open an account. The bank is located in Frontenac, Missouri which is in the suburbs of St. Louis.

The bank's ratings for safety and soundness have improved since last year. The ratings are now at or above average: 3 stars (performing) at Bankrate.com and 4 stars (excellent) at BauerFinancial. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 2005 (FDIC Certificate # 58121).

Associated Bank is offering up to a $150 bonus for opening a checking account and performing specific activities. The offer ends on April 20, 2010. Refer to the bank's promotion page for the full details. Requirements for the bonus include:

• Open a new qualifying personal checking account (excludes Free and Student) by 4/20/2010
• $50 with your first check order and completion of five debit card signature purchases
• $50 with your enrollment in Online Bill Pay and completing three bill payment transactions
• $50 with a regular direct deposit of your payroll check

Some important small print includes:

• Limited to one bonus per household
• Minimum opening deposit of at least $100 is required to obtain a bonus
• All qualifying activity must occur within 60 days of account opening to obtain applicable bonus
• The bonus will be deposited into your new checking account within 90 days of account opening
• Checking account must remain open and active with a minimum of five transactions monthly to receive bonus payment

Two important things to note about this promotion:

1. The free checking does not qualify so you'll have to watch out for fees. Monthly fees can be avoided in the Advantage Checking with direct deposit or with a $500 minimum balance.
2. The first $50 requires that you order checks which are not free

There's an online application on the promo page. However, the application states that they are only able to open checking accounts for persons residing in Wisconsin, Illinois, or Minnesota.

Branches are located in several cities in Wisconsin, Illinois and Minnesota including Madison, Green Bay, Milwaukee, Chicago, Peoria, Minneapolis, Saint Paul and Rochester.

Associated Bank has been a FDIC member since 1934 (FDIC Certificate # 5296).

Credit for this find goes to Fatwallet member sideout who mentioned it in this FW thread.

Other Bank Bonuses

Refer to the Bank Bonus page for other bonuses at banks and credit unions around the nation.

Hot Deals, Quick Link for Rates, Recap of this week's posts

We had some good news on Friday when the Labor Department released January's unemployment rate showing an unexpected decline from 10% to 9.7%. The more the economy strengthens and unemployment falls, the sooner we'll see higher interest rates. However, as this AP article reported, it's likely to take a long time before unemployment returns to normal levels:

Still, the government now estimates 8.4 million jobs vanished in the Great Recession. And economists say the nation will be lucky to get back 1.5 million of them this year. They also warn it will take until the middle of the decade for the job market to return to normal.

This Calculated Risk Blog post showed the historical relationship of the unemployment rate with the Fed funds rate:

In the early '90s, the Fed waited more than a 1 1/2 years after the unemployment rate peaked before raising rates. The unemployment rate had fallen from 7.8% to 6.6% before the Fed raised rates.

Higher inflation could force the Fed to hike rates in the next year. However, if history repeats, it's quite possible that it could take many years before we see rate hikes.

There was another major newspaper that published an article showing the impact to savers and retirees from this ultra-low interest rate environment. It was published today by the Boston Globe, and I especially like the title: For savers, low rates are matter of high interest. The article pointed out what we all have seen:

Record-low interest rates that have been a boon for borrowers are hurting savers, especially seniors who depend on bank account interest to supplement their incomes.

These articles may not help make it any easier for us, but at least this news is being reported.

After 15 bank failures in Janauary, I was worried my February Fridays would be especially busy. However, only one bank failed yesterday. The failed bank was just a tiny Minnesota bank (see review). I have a feeling we won't see many more quiet Fridays this year. This MarketWatch article reported on what we may see for 2010. The article described the Texas Ratio as a guide to identify at-risk banks, and it noted that there are 388 banks as of 9/30/09 with Texas Ratios of over 100%. That compares to 552 that the FDIC has on its 9/30/09 secret problem list and 605 that's on Calculated Risk's unofficial problem bank list.

Savings Account Rates

Savings account rates had another bad week. Several banks cut their rates including Discover Bank, Capital One and ING Direct.

Alliant Credit Union continues another month maintaining 2.00% APY on its savings account (see my Alliant review). This 2% APY has held since July 2009. Another nice surprise is the continued 2.02% APY being offered by Incredible Bank. It has been almost 3 months since I first reviewed this internet checking account.

Rate Hikes:

1. OneWest Bank e-Money Market - 1.25% (was 1.15%)

Rate Cuts:

1. Peoples Bank E-Savings - 1.60% (was 1.81%)
2. Wings Financial CU MMA - 1.56% $5K (was 1.71%)
3. Clear Sky Savings Account - 1.55% (was 1.60%)
4. Bank of Internet MMA - 1.55% (was 1.60%)
5. Capital One/Costco InterestPlus Savings - 1.50% (was 1.60%)
6. Bank of Internet Advantage Savings - 1.50% (was 1.55%)
7. Savings Square Savings - 1.45% (was 1.55%)
8. Capital One InterestPlus Savings - 1.45% (was 1.55%)
9. Nationwide Bank MMA - 1.45% (was 1.50%)
10. Discover Bank MMA - 1.40% $10K-$100K (was 1.50%)
11. Discover Bank Savings - 1.35% (was 1.60%)
12. Capital One/Costco MMA - 1.35% (was 1.40%)
13. Bank of American Fork - 1.35% (was 1.40%)
14. 1st Constitution Direct Savings 3mo promo - 1.25% (was 1.50%)
15. Southern Community Bank & Trust MM Special - 1.20% (was 1.80%)
16. ING Direct Savings - 1.20% (was 1.25%)
17. Capital One MMA - 1.15% (was 1.20%)
18. Charles Schwab Savings - 0.75% (was 1.05%)
19. Charles Schwab Checking - 0.60% (was 0.75%)

Certificate of Deposit Rates

I'm afraid it was also a bad week for CD rates, especially short- and mid-term rates. There are no longer any banks offering nationally available 2% 1-year CD rates. There are a few credit unions such as Alliant. Also, there are two banks offering nationally available 15-month CDs with yields at or above 2%. One is Country Bank for Savings in MA which has a 2.00% APY (see review). The other one is First City Bank in Florida which has a 2.25% APY (see review).

Long-term CD rates mostly held steady. One bright spot was at EverBank which raised its 5-year CD rate from 3.37% to 3.45% APY. The best nationally available 5-year CD rate at a bank continues to be at Flushing Savings's internet bank, iGObanking.com (see review).

If you're concerned about locking into a long-term CD when there's a chance we'll see high inflation and much higher rates in the next couple of years, make sure you pay attention to the early withdrawal penalties. The bank that currently has the smallest penalty for long-term CDs is Ally Bank which recently cut its penalty to only 60 days of interest (see review).

No one knows how soon we'll see higher rates. That's one reason CD ladders are so useful. It takes away the guessing. We published an article with a neat infographic this week on how to build a CD ladder. I included some of my own tips in this blog post.

Below are some of the best nationwide and local CD deals that are still active.

Best Nationwide CD Deals as of 2/06/10: Also listed are savings account promos with rate guarantee periods. The full list of nationwide CD rates is farther down.

1. 2.25% 3-mo money market/checking promo at EverBank (account review)
2. 2.50% 9-mo ($50K max) at Dime Savings Bank (account review)
3. 1.77% 10-mo CD at EBSB Direct (account review)
4. 2.10% 12-mo CD at Alliant CU (account review)
5. 2.25% 15-mo CD at First City Bank (account review)
6. 2.00% 15-mo CD at Country Bank for Savings (account review)
7. 2.17% 24-mo Add-On CD at Northwest FCU (account review)
8. 2.75% IRA-only 30-mo CD at Navy FCU - Limited Membership (account review)
9. 2.50% 30-mo CD at Astoria Federal Savings (account review)
10. 3.00% 36-mo CD at Pentagon FCU (may change in Feb) (account review)
11. 3.25% 48-mo CD at Pentagon FCU (may change in Feb) (account review)
12. 3.15% 48-mo CD at Hudson City Savings Bank (account review)
13. 3.65% 60-mo CD at Melrose CU (account review)
14. 3.60% 60-mo CD at Apple FCU (account review)
15. 3.55% 60-mo CD at iGObanking (account review)
16. 3.50% 60-mo CD at Pentagon FCU (may change in Feb) (account review)
17. 3.40% 60-mo CD at Hudson City Savings Bank (account review)
18. 3.15% 60-mo Small-Penalty CD at Ally Bank (account review)
19. 4.25% IRA-only 84-mo CD at Navy FCU - Limited Membership (account review)
20. 4.06% 84-mo CD (min $175K) at USAA Bank (account review)

Best Local CD Deals as of 2/06/10: Some of the best CD deals are from banks and credit unions that don't offer accounts nationwide. Refer to the recap section and the state index section to find all the recent local deals. Here are some of the best deals to note.

1. 2.30% Money Market Account (min $100K) at Georgia Primary Bank in Atlanta (account review)
2. 2.02% Money Market Account at South Florida FCU (account review)
3. 1.90% Savings Account (5% for 1st $1K) at OMNIBANK in TX (account review)
4. 2.00% 6-mo CD at Vision Bank in Dallas (account review)
5. 2.00% 6-mo CD at United Financial Bank of Florida (account review)
6. 3.00% 7-mo CD at NIH FCU in MD & DC - Limited Membership (account review)
7. 2.25% 12-mo & under CD at Cecil Bank in MD (account review)
8. 2.22% 12-mo CD at Cornerstone Bank & Trust in IL (account review)
9. 2.50% 12-mo CD at Danversbank in MA (account review)
10. 2.06% 12-mo CD w/chk at Chartway FCU in VA, GA, RI, NC, TX, FL & NJ (account review
11. 2.00% 12-mo CD at Premier American Bank, NA in Miami, FL (account review)
12. 2.01% 15-mo CD at Aspire FCU in NY, NJ, NH & VA (account review)
13. 2.20% 16-mo Jumbo CD at Teachers FCU in NY (account review)
14. 2.35% 17-mo CD at Community Bank of Broward in FL (not verified since 1/27) (account review)
15. 2.18% 18-mo CD w/chk at Greater Western Bank in AZ, CO, KS, NE, SD, IA & MO (account review)
16. 2.20% 18-mo CD & 3.20% 44-mo CD at Crescent Bank & Trust in Louisiana (account review)
17. 4.06% 48-mo CD & 2.52% 24-mo CD at Founders FCU in SC/NC (account review)
18. 4.00% 60-mo CD at PFFCU in Philadelphia (account review)
19. 3.75% 60-mo & 3.45% 48-mo CD at Fidelity Bank of FL (account review)
20. 3.60% 60-mo Jumbo CD at CEFCU in CA & IL (account review)
21. 3.56% 72-mo CD at Broadway Federal Bank in Los Angeles (account review)

Reward Checking Accounts

I reported on two new reward checking accounts last week with yields of 3.56% and 4.25%. Just like savings account rates, reward checking rates are also falling. However, it should be noted that the average reward checking rate continues to be 1% to 2% higher than the average savings account rate. It should also be noted that reward checking is no longer a new product. I reported on 83 reward checking accounts in 2007.

To see all of the high yield reward checking accounts available throughout the nation, please refer to the reward checking section of DepositAccounts.com.

Changes in the Rate Lists

I've done some pruning of the rate lists. A reader had the good suggestion to remove banks offering "high-yield" savings accounts with rates under 1%. I hope we never get to the point that we have to consider 1% competitive. I also removed some low-rate CDs from the lists. If you want to see a more comprehensive list, refer to our DepositAccount rate tables. I've included links to these tables under each category.

Recap for the Week - Links to This Week's Posts

Banking News

• Just One Small Bank Failure Today in Minnesota

CD Deals - National

• Issues to Consider for Your CD Ladder
• Competitive Long-Term IRA CD Rates at Navy Federal Credit Union - Limited Membership
• 15-Month CD Special at First City Bank - Available Nationwide
• Competitive 5-Year CD at iGOBanking.com - Available Nationwide
• Competitive One-Year CD Rate at Doral Bank Direct But Beware When the CD Matures

Reward Checking Accounts

• High-Yield Reward Checking Account at Cornerstone Bank & Trust in IL - Local Only
• High-Yield Reward Checking Account at First State Bank in TN - Local Only

CD and Money Market Deals - Local

• Competitive CD and Money Market Specials at Premier American Bank, N.A. in Miami - Local Only
• CD Specials with Competitive Rates at Premier Bank in Northwest Florida - Local Only
• Competitive CD Rates at Chartway FCU in Several States - Local Only
• Special No-Penalty 24-Month CD at Union National Community Bank in PA - Local Only
• Hot 25-Month CD Special at University of Iowa Community CU - Local Only
• CD and Money Market Specials at Legacy Bank in Milwaukee - Local Only
• Competitive 29-Month CD Rate at American Eagle Bank of Chicago - Local Only
• CD and Checking Account Deals at Cascade Bank in Washington State - Local Only
• Competitive CD Rates at Eastman Credit Union in Parts of TN, VA, TX, SC & AR - Local Only
• CD and Checking Account Promotion at Gateway Bank of Southwest Florida - Local Only
• 15-Month CD Special at Velocity Credit Union - Easy Membership But Soon To Be ASI-Only
• Hot One-Year CD Local Deal (MA) and Other Good Nationwide Deals at Danversbank
• Competitive 18-Month CD Special at Greater Western Bank in Several States - Local Only

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. The top lists include banks and credit unions with broad availability and with minimums under $100,000. Previous weekly summaries are available at this page. Quick Links: Refer to the following links for the savings accounts and CDs that interest you: Liquid Account Rates: Savings Accounts, Reward Checking, Bank alternatives CD Rates: 3 Mo CDs, 6 Mo CDs, 9 Mo CDs, 12 Mo CDs, 18 Mo CDs, 24 Mo CDs, 36 Mo CDs, 48 Mo CDs, 60 Mo CDs, 84 Mo CDs, CDs by state Comments: read and discuss

As of February 6, 2010

Checking/Savings/Money Market Accounts:

• Best Reward Checking Account Rates (Nationwide & by State)
• Best Savings Account Rates (Nationwide & by State)
• Best Money Market Rates (Nationwide & by State)
• Best Checking Account Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• EverBank - 2.25% ($5K min), 3 mo promo rate up to $50K (1.26% stnd) account review
• Incredible Bank - 2.02% Checking ($1K min) account review
• SmartyPig - 2.01% (min $25) withdrawal restrictions, account review
• Alliant Credit Union - 2.00% (min $100), account review
• Redneck/AmericaNet/Evantage Bank - 2.00% (up to $35K, 1% over) account review
• SFGI Direct - 1.85% ($25 min), NOT accepting new customers, account review
• Alliant Credit Union - 1.75% Checking, required direct deposit, account review
• Colorado Federal Savings Bank - 1.70% ($2.5K min) account review
• EBSB Direct - 1.67% (min $50K) account review
• Bank of Internet - 1.65% (min $100) account review
• Newtown Savings Bank - 1.60%, account review
• Peoples Bank - 1.60% ($10K min) account review
• Wings Financial CU - 1.56% MMA ($5K min) Limited Membership, account review
• UFB Direct - 1.55%, account review
• Bank of Internet - 1.55% MMA (min $100) account review
• Clear Sky Accounts - 1.55% account review
• CNB Bank Direct - 1.50% account review
• American Express Bank - 1.50%, account review
• DollarSavingsDirect - 1.50% ($1K min) account review
• Connexus CU - 1.50% MMA (min $20K) (2.00% $100K+) account review
• Danversbank - 1.50% account review
• ProvidentNJ Direct - 1.50% (min $10K) account review
• Bank of America - 1.50% MMA ($10K min), guaranteed to 4/2010, account review
• First Trade Union Bank - 1.50% ($2.5K min) account review
• Bank of Internet - 1.50% Advantage Savings (min $100) account review
• Capital One/Costco - 1.50% InterestPlus Savings ($5K min) quarterly bonuses for $15K+, account review
• Ally/GMAC Bank - 1.49% MMA account review
• Ally Bank - 1.49% Savings account review
• Salem Five Direct - 1.45% Savings, account review
• United Central Bank - 1.45% MMA (min $5K) (1.65% $75K-$300K) account review
• Nationwide Bank - 1.45% MMA (min $1K) account review
• Capital One - 1.45% InterestPlus Savings ($2.5K min) quarterly bonuses for $15K+, account review
• Savings Square - 1.45%, account review
• WTDirect - 1.41% ($10K min), account review
• ADB Bank - 1.40% account review
• Delta Community CU - 1.40% MMA (min $25K) 1.65% $100K+, account review
• Hudson City - 1.40% (min $2.5K) account review
• Grand Yield Direct - 1.40% (min $2.5K) account review
• FNBO Direct - 1.40%, account review
• HSBC Advance - 1.35% account review
• Bank of American Fork - 1.35% (min $1K) account review
• CapitalOne/Costco - 1.35% MMA (min $1K, Costco members only, $60 deal for exec. members)
• Discover Bank - 1.35% Savings (min $500) account review
• iGObanking - 1.31%, account review
• AIG Bank - 1.30% MMA (min $10K) account review
• Choice Financial - 1.26% (min $5K), (1.51% $25K+, 1.61% $100K) account review
• OneWest Bank - 1.25% (min $1K) account review
• Wilshire State Bank - 1.25%, chk required (min $500) account review
• Bank Provident Online - 1.25% (min $10) account review
• Presidential Bank - 1.25% (min $5K, 0.75% over $35K), account review
• UnivestDirect - 1.25%, (0.25% checking), account review
• Zions Bank - 1.25% MMA, outside of Utah, (min $2.5K) account review
• State Farm Bank - 1.25% Checking (min $2.5K) account review
• FNCB Bank - 1.25% (min $100) account review
• 1st Constitution Direct - 1.25% (min $100), 3 mo promo (1.25% $10K+ stnd) account review
• EmigrantDirect - 1.20%, account review
• E-LOAN - 1.20% Savings Plus (min $5K) other requirements, account review
• ING Direct - 1.20%, (0.25% checking), post ($25 bonus)
• Southern Community Bank & Trust - 1.20% ($25K min) req chk, account review
• Intervest National Bank - 1.15% MMA (min $2.5K) account review
• Bank of America NEA - 1.15% MMA ($500 min) (1.25% for $50K+) account review
• Union Federal Savings - 1.15% account review
• Capital One - 1.15% MMA, account review
• Discover Bank - 1.00% MMA (min $2.5K) (1.40% $10K-$100K, 1.50% $100K+) account review

3-Month Certificates of Deposit:

• Best 3-Month CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Danversbank - 1.75% (4 mo) (min $500) account review
• Wings Financial CU - 1.51% (min $500) Limited Membership, account review
• UFB Direct - 1.14% (min $8K)
• TotalBank - 1.10% (min $1K) account review
• Southeast Financial FCU - 1.10% (min $500) account review
• MetLife Bank - 1.05% (min $25K) account review

6-Month Certificates of Deposit:

• Best 6-Month CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Wings Financial CU - 1.76% (min $500) Limited Membership, account review
• America's CU - 1.75% (7 mo) (min $500) account review
• Country Bank for Savings - 1.60% (min $500) account review
• Southeast Financial FCU - 1.60% (min $500) account review
• Jacksonville Bank - 1.50% (min $1K) account review
• Connexus CU - 1.50% (min $500) account review
• UFB Direct - 1.39% (min $8K)
• State Bank of India - 1.36% (min $5K) account review
• La Jolla Bank - 1.35% (min $10K), account review
• Excel National Bank - 1.33% (min $10K) account review
• Ascencia Bank - 1.31% (min $500), account review
• Ally Bank - 1.30% (min $0) account review
• Colorado Federal Savings Bank - 1.30% ($5K min) account review
• Century Bank Direct - 1.25% (5 mo) (min $1K) account review
• MetLife Bank - 1.15% (min $25K) account review
• ING Direct - 1.00%, account review

9-Month Certificates of Deposit:

• EBSB Direct - 1.77% (10-mo) (min $1K) account review
• Century Bank Direct - 1.50% (10 mo) (min $1K) account review
• OneWest Bank - 1.45% (min $5K) account review
• Doral Bank Direct - 1.40% (min $1K) account review
• Acacia Federal Savings Bank - 1.35% (min $500) account review
• NewDominion Bank - 1.31% (min $3K) account review
• MetLife Bank - 1.25% (min $25K) account review
• Ally Bank - 1.24% (min $0) No-Penalty, account review

12-Month Certificates of Deposit:

• Best One-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Apple FCU - 3.00% IRA-only (14-mo) (min $500) account review
• First City Bank - 2.25% (15-mo) (min $5K) account review
• Alliant Credit Union - 2.10% (min $25K) account review
• Melrose CU - 2.07% (min $5K) account review
• Wings Financial CU - 2.07% (min $500) Limited Membership, account review
• Southeast Financial FCU - 2.00% (min $500) account review
• America's CU - 2.00% (13-mo) (min $500) account review
• Country Bank for Savings - 2.00% (15-mo) (min $500) account review
• Academy Bank - 1.90% (min $500) account review
• Franklin Synergy Bank - 1.90% (min $1K) account review
• Golf Savings Bank - 1.90% (15-mo) (min $10K) account review
• Choice Financial - 1.85% (13 mo) (min $5K) add-on feature, account review
• UFB Direct - 1.81% (min $8K)
• Delta Community CU - 1.80% (min $1K) account review
• USAA Bank - 1.79% (15-mo) (min $1K) (2.10% $175K min) account review
• Jacksonville Bank - 1.75% (min $1K) account review
• Connexus CU - 1.75% (min $500) account review
• BankUnited - 1.75% (min $5K) account review
• Ascencia Bank - 1.71% (min $500), account review
• State Bank of India - 1.71% (min $5K) account review
• Century Bank Direct - 1.70% (15-mo) (min $1K) account review
• Acacia Federal Savings Bank - 1.70% (min $500) account review
• Colorado Federal Savings Bank - 1.70% ($5K min) account review
• Discover Bank - 1.70% (min $2.5K) account review
• NewDominion Bank - 1.67% (min $3K) account review
• Ally Bank - 1.65% (min $0) account review
• Frontier Bank - 1.60% (min $500) account review
• Self-Help CU - 1.56% (min $500) account review
• Northwest FCU - 1.52% (min $500) add-on, account review
• Geauga Savings Bank - 1.50% (min $1K) account review
• ING Direct - 1.50% (min $1) account review
• Wilshire State Bank - 1.40% (min $10K), liquid features, account review
• Bank of Internet - 1.40% (min $1K) account review
• Fifth Third - 1.35% (13-mo) (min $5K) not all states, account review
• HSBC Advance - 1.25% (min $10) account review
• Consumers CU - 1.25% (15-mo) (min $250) (1.50% $100K+) account review
• Amboy Direct - 1.10% Add-On (min $10K) account review

18-Month Certificates of Deposit:

• Best 18-Month CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Citibank - 4.07% (min $200) (max $25K) requires secured credit card, account review
• Southeast Financial FCU - 2.11% (min $500) account review
• Alliant Credit Union - 2.10% (min $25K) account review
• Pacific Mercantile Bank - 2.07% IRA-only (min $7.5K) account review
• Century Bank Direct - 1.90% (20 mo) (min $1K) account review
• Academy Bank - 1.90% (min $500) account review
• Discover Bank - 1.80% (min $2.5K), account review
• Nationwide Bank - 1.80% (min $500) account review
• NewDominion Bank - 1.76% (min $3K) account review
• Colorado Federal Savings Bank - 1.75% ($5K min) account review
• Ally Bank - 1.74% (min $0) account review
• DollarSavingsDirect - 1.65% (16-mo) (min $1K) verified by phone on 2/06 account review

24-Month Certificates of Deposit:

• Best Two-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Wings Financial CU - 2.52% (min $500) Limited Membership, account review
• Melrose CU - 2.32% (min $5K) account review
• Hudson City Bank - 2.30% (min $5K) account review
• Atlantic Coast Bank - 2.30% account review
• Southeast Financial FCU - 2.25% (min $500) account review
• Gateway Regional CU - 2.25% (min $1K) restrictions to membership, account review
• TriState Capital Direct - 2.25% (min $95K) account review
• America's CU - 2.25% (25 mo) (min $500) account review
• Country Bank for Savings - 2.25% (min $500) account review
• Jacksonville Bank - 2.20% (min $1K) account review
• Golf Savings Bank - 2.20% (min $10K) account review
• Northwest FCU - 2.17% (min $500) add-on, account review
• State Bank of India - 2.17% (min $5K) account review
• Discover Bank - 2.15% (min $2.5K) account review
• ISN Bank - 2.12% (min $1K) account review
• NewDominion Bank - 2.11% (min $3K) account review
• Tennessee Commerce Bank - 2.10% (min $5K) account review
• Main Street Bank - 2.10% (min $10K) account review
• Northrop Grumman FCU - 2.10% (min $40K), account review
• USAA Bank - 2.10% (min $1K) (2.41% $175K min) account review
• AIG Bank - 2.10% (min $2.5K) account review
• Ally Bank - 2.09% (min $0) Bump-Up, account review
• Northpointe Bank - 2.07% (min $5K) account review
• Self-Help CU - 2.07% (min $500) account review
• Broadway Federal Bank - 2.02% (min $1K) account review
• American Express Bank - 2.00% (min $0) account review
• Equity Bank - 2.00% (min $1K) account review
• Frontier Bank - 2.00% (min $50K) account review

36-Month Certificate of Deposit:

• Best 3-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Wings Financial CU - 3.03% (min $500) Limited Membership, account review
• Pentagon Federal CU - 3.00% (min $1K), account review
• Melrose CU - 2.83% (min $5K) account review
• Hudson City Bank - 2.80% (min $5K) account review
• BankUnited - 2.75% (min $5K) account review
• EBSB Direct - 2.75% (min $1K) account review
• Atlantic Coast Bank - 2.70% account review
• Acacia Federal Savings Bank - 2.65% (min $500) account review
• Alliant Credit Union - 2.60% (min $25K) account review
• Nationwide Bank - 2.60% (min $500) account review
• iGobanking - 2.60% (min $500), account review
• Air Force FCU - 2.55% (min $25K) membership restrictions account review
• State Bank of India - 2.52% (min $5K) account review
• Northrop Grumman FCU - 2.52% (min $40K), account review
• NewDominion Bank - 2.51% (min $3K) account review
• Jacksonville Bank - 2.50% (min $1K) account review
• Agriculture FCU - 2.50% (min $1K) account review
• Southern Community Bank & Trust - 2.50% (min $500) account review
• Discover Bank - 2.50% (min $2.5K) account review
• Ally Bank - 2.49% (min $0) account review
• Frontier Bank - 2.35% (min $50K) account review

48-Month Certificate of Deposit:

• Best 4-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Pentagon Federal CU - 3.25% (min $1K), account review
• Hudson City Bank - 3.15% (min $5K) account review
• Wings Financial CU - 3.14% (min $500) Limited Membership, account review
• Alliant Credit Union - 3.10% (min $25K) account review
• Melrose CU - 3.09% (min $5K) account review
• National Bank of KC - 3.03% (min $10K) account review
• Acacia Federal Savings Bank - 3.00% (min $500) account review
• BankUnited - 3.00% (min $5K) account review
• Gateway Regional CU - 2.80% (min $1K) restrictions to membership, account review
• Third Federal - 2.75% (min $500) account review
• USAA Bank - 2.75% (min $1K) (3.06% $175K min) account review
• Ally Bank - 2.74% (min $0) account review
• Discover Bank - 2.65% (min $2.5K) account review
• Frontier Bank - 2.55% (min $50K) account review
• Capital One - 2.50% (min $5K) account review

60-Month Certificate of Deposit:

• Best 5-Year CD Rates (Nationwide & by State)

• Noteworthy Accounts Available Nationwide:

• Melrose CU - 3.65% (min $5K) account review
• Apple FCU - 3.60% (min $50K) account review
• iGobanking - 3.55% (min $500), account review
• Pentagon Federal CU - 3.50% (min $1K), account review
• EverBank - 3.45% ($1.5K min) account review
• Hudson City Bank - 3.40% (min $5K) account review
• Wings Financial CU - 3.39% (min $500) Limited Membership, account review
• Northwest FCU - 3.30% (min $25K) account review
• Agriculture FCU - 3.30% (min $1K), account review
• OneWest Bank - 3.30% (min $5K) account review
• Acacia Federal Savings Bank - 3.30% (min $500) account review
• Dime Savings Bank - 3.25% (min $500) account review
• BankUnited - 3.25% (min $5K) account review
• Connexus CU - 3.25% (min $1K) account review
• State Bank of India - 3.24% (min $5K) account review
• Mountain America CU - 3.20% (min $1K) account review
• Discover Bank - 3.20% (min $2.5K) account review
• Ally Bank - 3.15% (min $0) account review
• USAA Bank - 3.15% (min $1K) (3.46% $175K min) account review
• Intervest - 3.15% (min $2.5K), account review
• US Bank - 3.10% (59 mo) (min $1K) account review
• Gateway Regional CU - 3.05% (min $1K) restrictions to membership, account review
• Capital One/Costco - 3.05% (min $5K) account review
• Patelco CU - 3.04% ($1K min), account review
• Chase Bank - 3.00% (min $10K)
• Capital One - 3.00% (min $5K) account review
• Frontier Bank - 2.85% (min $50K) account review

84-Month Certificate of Deposit:

• Navy FCU - 4.25% IRA-only ($20K min) restrictions to membership, account review
• Navy FCU - 4.00% ($20K min) restrictions to membership, account review
• Pentagon Federal CU - 3.75% (min $1K), account review
• Apple FCU - 3.75% (min $50K) (4.00% 10yr) account review
• USAA Bank - 3.75% (min $1K) (4.06% $175K min) account review
• Bank of America DOW - 3.61% (10-yr) (min $1K) account review
• Discover Bank - 3.40% (min $2.5K) (3.70% 10yr) account review
• Capital One/Costco - 3.30% (min $5K) account review
• Capital One - 3.25% (min $5K) account review
• Third Federal - 3.25% (6-yr) (min $500) account review
• Intervest - 3.24% (min $2.5K), account review

Various Deposit Account Deals

• Checking/Savings Account Bonuses
• Best IRA CD rates, local and nationwide deals
• Latest CD and Savings Account Deals with No Major Deposit Limitiations

High Yield Reward Checking Accounts - Open to All

• Reward Checking Accounts Available Nationwide

Recent CD Specials at Local Credit Unions and Banks

• Best Deals and CD Rates by State

Bank Account Alternatives

• GE Interest Plus - 2.05% rate for $50k+
• Vanguard Tax-Exempt Money Market Fund - 0.09% 7-day yield
• Paypal Money Market Fund - 0.05% 7-day yield (1% cashback debit MasterCard)
• Fidelity Money Market Fund - 0.02% 7-day yield (reviews on Fatwallet)
• Vanguard Prime Money Market Fund - 0.02% 7-day yield
• Fidelity Municipal Money Market Fund - 0.01% 7-day yield
• TIAA-CREF Money Market Fund - 0.00% 7-day yield
• FW Thread on Treasury Bills
• I Bonds for 2009, I Bond Article, I Bonds as CD Alternatives

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

Edit 2/7/2010: Clarified the Capital One Savings Accout as the InterestPlus Savings Account.

After the last two Fridays, I was expecting at least a half a dozen bank closures today. It turned out to be a quiet Friday with only one small bank being shut down. The failed bank was 1st American State Bank of Minnesota, and the FDIC arranged for Community Development Bank, FSB to assume all of the deposits even those over the FDIC limit. There probably weren't a lot of deposits over the FDIC limit. The bank's total deposits were just $16.3 million. The only concern for those handful of depositors will be if Community Development Bank decides to reduce existing CD rates. Based on Community Development Bank's competitive CD and money market rates, they may not be in a rush to cut rates.

Today's bank failure was the 16th for 2010. If we see the same frequency of bank failures for the rest of the year, we should have around 180 bank failures. That's in the range that a bank analyst gave in this MarketWatch article. The article reviews the health of three large banks that are having problems: Flagstar, Amcore and Sterling. All have high Texas Ratios indicative of banks in trouble.

The FDIC has said there are 552 problem institutions as of 9/30/2009. They keep this list secret to avoid causing bank runs. The MarketWatch article mentioned that there were 388 banks in the US with Texas Ratios over 100% as of 9/30/2009.

Another sign of potential trouble is when a bank receives an enforcement action from its regulator. The best list of banks operating under public enforcement actions is at Calculated Risk Blog. The latest unofficial problem bank list as of 2/05/10 has 605 banks. For each bank closure, I'm checking this list to see if the bank had been operating under a Cease and Desist Order or similar enforcement action. Today's failure was on this list, and most all of this year's failures have been on the list.

Below is a summary of today's bank failure:

16th Bank Failure of 2010 (3rd in MN)

• FDIC Press Release
• Closed Bank: 1st American State Bank of Minnesota, Hancock, MN
• Size: 2 branches, $18.2 million in assets, $16.3 million in deposits
• Possible Uninsured Deposits: All deposits transferred
• Acquiring Bank: Community Development Bank, FSB, Ogema, MN
• Rate Changes: Community Development Bank will review rates
• Estimated Cost to Deposit Insurance Fund: $3.1 million
• Enforcement Action: FDIC 2/25/08 C&D Order
• Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

The above BauerFinancial and Bankrate ratings are based on 9/30/09 data.

References:

• FDIC list of failed banks
• Latest FDIC info on deposit insurance
• My bank failure posts
• Review of the 2009 bank and credit union failures
• 10 Lessons from the 2008 bank failures
• Review of the 2008 credit union liquidations

While I focus on deals, we're going to continue to have others write articles on timeless banking topics. I'll be reviewing them before publication. The latest one was written by Miranda, and it's on How to Build a CD Ladder. We've also included in this article a neat infographic to better describe the CD ladder process. To supplement this article, I thought it would be useful for me to do a blog post to provide some additional issues to consider when you're planning a CD ladder.

Rolling Over CDs

Part of the CD ladder process is that you roll over maturing CDs. It's important that you don't let them roll over automatically. You often can negotiate a better rate at the bank. Make sure to check what the competition is offering. This can often help you get a better rate. One reader recently reported negotiating a rate that was over a percentage point higher than the listed rate.

Ease of Closing CDs

You won't always be able to negotiate higher rates, so it's important that the bank makes it easy for you to close the CD and transfer your money. I just posted on one internet bank that requires its CD holders to mail in their paper certificates (see my review of Doral Bank). Another example of a bank making it difficult to close a CD is Astoria Federal Savings. If you don't live near a branch, the only option to receive the funds is by check in the mail (see my review of Astoria Federal).

Look for banks that allow CD closure instructions to be done online, by phone or by secure email. Some banks can send you the funds via an ACH transfer. Typically this will be a transfer to the bank that was used to fund the CD. If the bank can't do an ACH transfer, you might want to open a liquid account at the bank. If you have a credit union, you'll already have a share savings account. I've always been able to instruct the bank or credit union to transfer the funds of a matured CD into the liquid account. Once it's in the liquid account, you can either write a check to fund a new CD (if it's a checking or money market account) or you can do an ACH pull using an online bank like Ally.

If you don't want to open a liquid account at the bank (perhaps due to monthly fees), a wire transfer is often a better option than receiving a check by mail. An outbound wire transfer will typically cost you at least $10, but that might be cheaper than the lost interest while the check is in the mail.

Health of the Bank

CD ladders help you take advantage of the higher rates offered by long-term CDs. But this high rate can go away if your bank fails. If you stay below the FDIC limit, you don't have to worry about losing any principal or interest. However, you may lose your high CD rate if the bank fails. It has been very common for banks that take over failed institutions to reset the CD rates at the day of closure or soon after. Customers have the option to close the CD without a penalty. However, with the low interest rate environment, it has been impossible to find comparable CD rates.

Accessing Your Funds

CD ladders are designed to allow you to have access to some of your money each year or some regular interval when one of the CDs matures. It's important to note that most banks allow you to make an early withdrawal with a penalty. So you don't have to wait if you need the money or want to use it to fund a higher rate CD. The early withdrawal penalties can vary widely among banks. An example of an especially harsh penalty is at Intervest National Bank which charges a penalty equal to the interest of half the term. For a 5-year CD, that's 30 months of interest! (see my account review). The best early withdrawal penalty is currently at Ally Bank which has a penalty of only 60 days of interest (see my account review). It should also be noted that many banks include in their disclosures a right for them to refuse an early withdrawal (see post).

Other CD Tips

I have some additional issues to consider when you're planning a CD ladder in my post about the things that banks won't tell you about CDs.

Do you have any CD tips or CD experiences to share? If you do, please leave a comment.

Premier American Bank, N.A. is offering several competitive CD specials. The two best include a 2.00% APY 12-month CD and a 2.15% APY 18-month CD. Minimum deposit is $10,000 ($5,000 for IRA CDs). Below is the full list of CD specials as listed at the bank's specials page as of 2/05/2010:

• 1.50% APY 6 month
• 1.75% APY 9 month
• 2.00% APY 12 month
• 2.15% APY 18 month
• 2.10% APY 24 month

There's also a competitive money market account special which has a 2.00% APY for balances over $10,000 as of 2/05/2010. Minimum initial deposit is $2,500.

It appears that a branch visit is required to open an account, and you may have to be a local resident (note to those visiting Miami for the Super Bowl). Branches are located in Miami, Surfside and Hialeah Gardens, Florida.

Didn't the Bank Fail Last Month?

One interesting thing to note about this bank is that it's a newly chartered bank that took over the failed Premier American Bank on January 22, 2010. Here's how the FDIC described this transaction:

To protect the depositors, the FDIC entered into a purchase and assumption agreement with Premier American Bank, National Association, Miami, Florida, a newly-chartered national institution, to assume all of the deposits of Premier American Bank. Premier American Bank, N.A. is a subsidiary of Bond Street Holdings, LLC, Naples, Florida.

By the look of the bank's website it appears the new owners are trying to be very quiet about this change. I can't see any news about the failure or takeover.

This is a good reminder to check the rates of any bank that has failed and has been taken over by another bank. It's common for the new bank to offer competitive deposit deals in an attempt to retain customers. Another benefit of these deals is that the new bank should be in much better shape financially.

This newly chartered bank already has an entry at the FDIC website (FDIC Certificate # 58991).

Thanks to the reader Linda who mentioned this CD special in the Open Discussion Thread.

Premier Bank is offering two competitive CD specials: a 2.01% APY 13-month CD and a 2.26% APY 18-month Bump-Up CD. Minimum deposit is $10,000. These rates are listed at the bottom of the bank's rates page as of 2/05/2010.

The bank also has a reward checking account which I first reported on in April 2007 when the account was paying 6% for up to $50K. As you might expect, the rate has fallen substantially. It's now 1.81% APY for up to $50K (see review).

It appears that a branch visit is required to open an account. Branches are located in Tallahassee and Quincy, Florida.

The bank's ratings for safety and soundness are a little weak: 3 stars (adequate) at BauerFinancial and 2 stars (below peer group) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 1995 (FDIC Certificate # 33992).

Chartway Federal Credit Union is offering some competitive CD rates. The most competitive is its 12-month CD which has a top rate of 2.06% APY for a minimum deposit of $10,000. Other competitive ones include a 1.60% APY 6-month CD and a 2.26% APY 24-month CD. These yields require a Preferred Plus, Elite 50 Plus or Premier Checking. Without these checking accounts, the rates are 25 basis points lower. These rates are listed in the credit union's rates sheet as of 2/05/2010.

The checking account requirement does hurt this deal. All three of the qualifying checking accounts have a minimum balance requirement to avoid a monthly fee. The Preferred Plus checking and the Elite 50 Plus checking have a $10 monthly fee unless a minimum balance of $2,500 is maintained. These two would be preferable to the Premier Checking which has a $20 monthly fee unless a minimum balance of $5,000 and direct deposit are maintained.

Unfortunately, their eChecking account does not qualify for this CD. This is a reward checking account that pays up to 3.84% APY on a $20K balance (see review).

Another good deal at the credit union is the money market accounts. The top rate on the Money Market Plus and Link accounts is 2.02% APY for balances of at least $100K as of 2/05/2010. These rates don't require the above checking accounts.

Membership and Locations

Membership is open to those who live, work, worship or go to school in a defined geographic area served by the credit union's Virginia, Florida, Rhode Island and Texas branches. A reader noted in a previous post that the geographic areas are narrow, so please call to see if you can be eligible. You can also be eligible via schools and select employer groups. The online application has a list of eligible schools and employers. Please refer to their Membership Page for more details. Membership requires a $5 minimum deposit into the Prime Share savings account.

Branches are located in Virginia, Georgia, Rhode Island, North Carolina, Texas, Florida, Ohio and New Jersey.

The credit union has some decent financial ratings for safety and soundness: 4 stars (excellent) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both are based on 9/30/09 data. Chartway is federally insured by the NCUA (Charter # 13242).

Union National Community Bank is offering a special 24-month CD with a 2.00% APY. Minimum deposit is $2,500. What makes this CD a great deal is its no-penalty feature. You can make a penalty-free early withdrawal any time after 6 days of opening. However, they don't allow partial withdrawals. If you need to make a withdrawal, you'll have to close the CD.

This special CD doesn't seem to be listed at the bank's website. A reader mentioned this in the comments, and I called the bank today for additional details. The CSR said it should last at least until next Wednesday (2/10/2010). It's available at all of their branches, and they do require you to visit a branch to open an account.

The bank also offers a high-yield reward checking account (see my review).

Branches are located in the Pennsylvania cities of Mount Joy, Lancaster, Columbia, Elizabethtown, Ephrata, Landisville, Manheim and Maytown.

The bank's ratings for safety and soundness are a little mixed: 4 stars (excellent) at BauerFinancial and 2 stars (below peer group) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 1934 (FDIC Certificate # 7635).

Thanks to the reader who mentioned this CD special in the Open Discussion Thread.

Navy Federal Credit Union has recently come out with a new 7-year IRA certificate with an APY of 4.25%. Unfortunately, it's only available for IRAs (Traditional, Roth and SEP plans) and ESAs (Education Savings Account plans). Minimum deposit is $20,000. For a $1,000 minimum the rate is 4.10% APY. There's also a competitive 30-month IRA CD with a rate of 2.75% APY for a minimum balance of $18,000.

Unfortunately, the above rates are only for IRAs. The rates for regular CDs are lower: 4.00% APY 7-year for $20K minimum and 2.25% APY 30-month for $18,000 minimum.

The above rate are listed at Navy FCU's rates sheet as of 2/04/2010.

In the rates sheet you may notice the 2.90% APY for a 1-year CD. This isn't a typical CD. It's the EasyStart Certificate which has balance cap of $3,000 along with several hoops to jump through.

Navy Federal expanded their field of membership in 2008, but it's still not easy to join if you don't have a military connection. You can now be eligible if you have some connection with not just the Navy but also with the Army, Marine Corps and Air Force. Refer to their Eligibility Checklist for the full details. Unlike Pentagon Federal Credit Union, there isn't an easy way for people without a military connection to join.

For more details about joining Navy Federal and opening and closing Navy Federal certificates, please refer to this May 2008 post.

Branches are located around the US and the world. Navy Federal is federally insured by the NCUA (Charter # 5536). It's the largest US credit union. It has $38.7 billion in assets and 3,258,521 members.

Cornerstone Bank & Trust is offering a high-yield reward checking account called eVantage Checking. It offers the following rates and features if certain monthly requirements are met:

• 3.56% APY on the portion of your balance $30,000
• 1.26% APY on the portion of your balance above $30,000
• 0.35% APY base rate if requirements are not met
• Refundable ATM Fees up to $12.00 per cycle

Monthly requirements include:

• 10 debit card purchases
• 1 Direct Deposit or ACH Transaction or active online bill pay
• Access Online Banking
• Receive Electronic Statements (when available)
• Maintain a valid email address

Additional features of this account include:

• $200 minimum initial deposit
• No monthly service fee
• No minimum balance
• Free online Bill Pay

It appears that a branch visit is required to open an account. Branches are located in the west Illinois cities of Alton, Carrollton and Jerseyville.

The bank's ratings for safety and soundness are average: 3 stars (adequate) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 1934 (FDIC Certificate # 15317).

Other High-Yield Reward Checking Accounts

The Cornerstone reward checking rate may not be the best, but the larger-than-average balance cap of $30K helps offset this.

Refer to the reward checking section of DepositAccounts.com to find reward checking accounts in your area or that are available around the nation.

First City Bank is offering a special 2.25% APY 15-month CD. Minimum deposit is $5,000, and the maximum is $250,000. According to the bank's promo page the special is scheduled to expire on 2/26/2010.

Update 6/17/10: The bank is no longer accepting accounts nationwide. This is now stated on the first page of the online application:

We currently accept applications from residents of Okaloosa, South Santa Rosa and South Walton counties.

There's an online application, and according to the CSR, this CD is available nationwide. One caveat is that you can't select the 15-month term in the application. According to the CSR, you can select a 12 or 18-month term and mention the 15-month term in the comments. According to the bank's instructions, one can open the CD by phone using their toll-free number (888-244-5151). However, a reader reported being told by the CSR that this is not an option.

They also offer a reward checking account which currently pays 3.01% APY for balances up to $25K. You can also apply online from any state to open this reward checking account (see post).

Branches are located in the Florida Panhandle cities of Fort Walton Beach, Destin and Mary Esther.

One thing that puts some cold water on this deal is that the bank isn't in the best financial shape. Its ratings for safety and soundness are very low: 0 star (lowest) at BauerFinancial and 1 star (lowest) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has also been operating under a FDIC Cease and Desist Order since 10/12/09. It's interesting to note that one of the restrictions the FDIC placed on the bank is on brokered deposits. As with any bank, make sure you keep under the FDIC limits. The bank has been a FDIC member since 1948 (FDIC Certificate # 16748).

Thanks to the reader me1004 who mentioned this special in the Open Discussion Thread.

Edit 2/03/10: Updated the phone option info for opening the CD.

iGObanking recently made a major bump in the rate of its 5-year CD. It's currently 3.55% APY. Minimum deposit is $1,000, and it's also available in an IRA. This rate is listed in iGObanking's CD rates page and IRA rates page as of 2/03/2010.

Long-term CDs may seem unwise when there's a risk that we may see high inflation and much higher interest rates in the near future. But it's not easy to predict when interest rates will rise. It could be in 6 months or in 3 years. For those looking for a top 5-year CD for their CD ladder, this is a good deal.

Every now and then iGObanking.com comes out with a good CD deal, but you have to be careful when the CD matures. Many of the CD rates are not competitive. So if you let your CD automatically renew, you may get stuck with a low-rate CD. A current example is the 1-year CD which has a yield of only 1.00% APY.

There's an online application that allows electronic funding via ACH. However, when you close the CD, they don't seem to provide a way to transfer it out via ACH. When I spoke with a CSR in 2008, I was told that you can request for them to send you a check via their secure email. You also have the option to transfer the money into your iGObanking savings or checking account.

The certificate of deposit details are described in their disclosure page. The early withdrawal penalty for CDs with terms of one year or over is 180 days of interest. The disclosure does give them the right to refuse an early withdrawal of principal:

You may make withdrawals of principal from your account before maturity only if we agree at the time you request the withdrawal.

The grace period after maturity in which you can close the CD without penalty is 7 calendar days.

My previous iGObanking reviews:

• iGObanking savings account review
• iGObanking checking account review

iGObanking.com is a division of Flushing Savings Bank, FSB, a New York bank with $4.1 billion in assets and 16 branches. Its ratings for safety and soundness are above average: 4 stars (excellent) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both ratings are based on 9/30/09 data. It has been a FDIC member since 1943 (FDIC Certificate # 16049).

University of Iowa Community Credit Union has increased the rate of its 25-month CD and IRA CD special from 2.55% to 3.00% APY. Minimum deposit is $1,000. The rate is 3.15% APY for a $100K minimum deposit. The credit union continues to have other competitive CD specials including a 2.00% APY 15-month CD (2.15% over $100K) and 2.75% APY 35-month CD with add-on and bump features (2.90% over $100K). These rates are listed in the credit union's rates page as of 2/3/2010. Refer to my January review for more details.

In addition to University of Iowa students, membership is open to those who live or work in any of the following Iowa counties: Johnson, Linn, Poweshiek, Iowa, Muscatine, Washington, Cedar, Tama, Louisa, Keokuk, Benton, Marshall, Jasper, or Mahaska. Please refer to the credit union's About Us page for more details.

Branches are located in Iowa City, Coralville, North Liberty and Grinnell.

The credit union's ratings for safety and soundness are above average: 4 stars (excellent) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The credit union is federally insured by the NCUA (Charter # 60269).

Any healthy portfolio includes some cash investments. Because cash comes with relatively high liquidity, and because it is generally considered safe (you are nearly always guaranteed to get your principal back, plus interest), it is an important part of your investment portfolio, providing a safety net and almost immediate access to emergency funds if needed. However, the high liquidity and safety of cash comes with a price: Low returns. Because the yield on cash is so low, it is up to you to make the most of it. And one of the ways that you can do this is to set up a CD ladder.

What are CDs?

A certificate of deposit (CD) is a financial product that allows you to earn a higher rate of return on your cash. A CD is a time deposit. You agree to keep your money with a financial institution for a specific period of time, and that institution agrees to pay you a fixed rate of return. Your yield will not fluctuate with market conditions. This is an advantage in a climate where interest rates are dropping, since you will still earn a higher return. The down side is that when interest rates are rising, you can’t take advantage of them without incurring a penalty for early withdrawal.

CDs are insured by the FDIC (banks) and the NCUA (credit unions) for up to $250,000 each, until 2014 when the limit reverts to $100,000. This means that if the bank or credit union you are using folds, you will still be able to get your money.

A CD pays a higher rate of return than a savings account. Generally, the longer you are willing to keep your money in a CD, the higher your rate of return. You can invest in a CD for as little as one month, and as long as 10 years. If you withdraw money from your CD before it matures, you will have to pay a penalty, so it is important to plan your CD investing so that you are able to get access to your money regularly, and still be able to benefit when interest rates rise. A CD ladder can help you plan your access to this cash.

CD Laddering

CD laddering is a strategy that allows you to take advantage of the higher cash rates offered by CDs, while at the same time ensuring that you have access to your money regularly. The most common type of CD ladder is the five year ladder. In this scenario, you open five different CDs. Let’s say that you check your savings account, and you have $15,000. You want to keep $5,000 for emergency purposes (move it to a high-yield savings account if it isn’t in one already), but use the remaining $10,000 to get your CD ladder started. Instead of locking that entire $10,000 away, here is what you might do:

• $2,000 in a one year CD at 1.80%
• $2,000 in a two year CD at 2.25%
• $2,000 in a three year CD at 2.60%
• $2,000 in a four year CD at 2.90%
• $2,000 in a five year CD at 3.20%

In one year, your first CD will mature. At that time, you will have $2,036. If you don’t need that money, you invest it all in another five year CD, at the prevailing rate (which you hope is higher by now). This new five year CD will mature at year six of your plan, keeping the ladder going. When your two year CD matures, you reinvest that in another five year CD, which will mature at year seven of your plan. As a result, every year you have a maturing CD. As you continue with your CD ladder, your yields will start to add up to something a little more substantial, especially if interest rates start rising.

The main drawback to this plan, of course, is that you only have access to your money once a year without penalty. You have to plan your finances around when this money will be available. If you don’t end up needing the money, though, you can keep the ladder going for years, creating a safe place for a chunk of your portfolio. If you do need some of the money, you take what you need and re-invest the rest. If you find that you have a little extra cash, you can add it to your CD each time you decide to re-invest to keep your CD ladder active.

If you a larger amount of investible assets, you can take advantage of jumbo CDs, which provide a higher interest yield. These are CDs that contain at least $10,000. The more money you put into a CD, the higher your rate of return. You can even set up a CD ladder working up to 10 year CDs with higher rates. Long term CD ladders comprised of jumbo CDs can be a good way to put the cash portion of your investment portfolio to work for you in a risk free way. While you probably won’t make phenomenal returns, you will be able to preserve your capital.

Short-term CD Laddering

In some cases, you might not be interested in long-term CD laddering. Instead, you might want access to your money more often. You can set up a CD ladder to put your money to work for you using CDs that mature in three, six, nine and 12 months. When your three month CD matures, you can take the money that you need (in any) and put the rest into another 12 month CD. This way, every three months, you have access to your funds. A small emergency fund in a high yield savings account can help you when you need immediate liquidity. Another option is to consider a no penalty CD. A few banks offer these types of CDs, which allow you to withdraw your funds early without fees. As with all investments, though, this flexibility comes with a caveat. You will earn lower yields on a no penalty CD – sometimes as much as 0.5% or even 1% lower. However, if access is what you want, it may be worth the trade off to include no penalty CDs in your CD ladder.

It is important to note that you have to pay income tax on the interest you earn from your CDs. The interest earned is reported as income on your Form 1040 each year, even if you don’t withdraw any money. You should receive a statement of your interest income from your bank. Consult with a tax professional to make sure that you are properly reporting your income from your CD laddering strategy.

Diversifying Your CD Ladders

Like any other type of investment, it is possible to diversify your CD investments. You can have long term ladders, meant to hedge against falling interest rates, used along with short term ladders that allow you take advantage of rising interest rates. Having a mix of long and short term CD laddering can also help you stagger maturity times so that liquidity is less of a problem.

Bottom Line

Even though cash investments are low yielding, their safety makes them vital to a well-rounded portfolio. You can enhance your cash yields with CDs, and you can offset the limited liquidity of CDs while hedging against changes to interest rates by employing a CD laddering strategy.

Doral Bank Direct has a very competitive 1-year CD with a 1.90% APY. Minimum deposit is $1,000. This rate and the other CD rates are listed in the bank's CD page as of 2/2/2010.

In my last post on this bank a reader mentioned the following about this bank:

I was told I had to send my CD back. Are you serious? Who sends an actual CD form? Since there is no way in the world I have the CD form, they are sending me an affidavit to sign to say I lost it. And even if I had the CD, they send you a check in the mail upon closing.

I emailed Doral for more details about their CD closure process. They do in fact require you to mail back the certificate. Here are the details that I received:

In order to close out your CD you must send us the original Certificate that was sent to you with your Welcome Package. Please sign at the bottom where it indicates "Endorsements". You have a 10 day (calendar days) grace period in which to send in your documentation so that we can process your request to close out the account.

This is the first time I've seen an internet bank require you to mail back a paper certificate. On the plus side, they can transfer the funds using ACH back to the account that was used to fund the CD. Here are those details that I received:

If you opened the account online we can send the funds via ACH to the original funding account on file. If you wish to do a wire transfer you must let us know in advance so that we can send to you the form. You would have to return the form back to us via mail and there would be a $25.00 fee in which you would incur. We can also send out a check to you for the funds if you wish.

For opening the CD I was told last year that "Once you submit your online application, the rate is locked in for the next 30 days."

Doral Direct's Savings Account used to have a competitive rate. This "high-yield" savings account is currently only paying a pathetic 0.50%.

Doral's first FAQ gives an overview of the bank:

Doral Bank Direct is an online banking product provided by Doral Bank, FSB (Doral Bank). Doral Bank is a wholly owned subsidiary of Doral Financial Corporation (NYSE:DRL), a diversified financial holding company with banking operations in the United States and Puerto Rico.

Doral Bank initiated operations in New York in 1999 as a FDIC-insured, federal savings bank emphasizing on bringing financial services to underserved communities, including the growing Hispanic community, currently the nation's largest minority.

Doral Bank, FSB is a FDIC member (FDIC Certificate # 34905).

As I mentioned in a previous post, Doral Financial Corporation had some financial problems in the past. However, Doral Bank, FSB has some respectable ratings for safety and soundness: 4 stars (sound) at Bankrate.com and 3½ stars (good) at BauerFinancial. Both ratings are based on 9/30/09 data. It should be noted that the other bank subsidiary of Doral Financial (Doral Bank based in Puerto Rico) has the lowest ratings at both BauerFinancial and Bankrate.com. There was a case last year when the FDIC closed not only the troubled banks of a bank holding company but also the relatively healthy ones. Refer to this FDIC press release for the details.

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Legacy Bank is offering two competitive CD specials. The best one is a 2.90% APY 25-month CD. The other one is a 1.90% APY 13-month CD. Minimum deposit is $2,500, and the maximum is $95,000. The money market special has 1.75% APY for balances of $10,000 guaranteed for the first 90 days. These specials and rates are listed on the bank's home page as of 2/02/2010.

There's an online application, but in the middle of the first application page it states that you may be required to physically come into the bank to open any deposit accounts.

It's a small one-office bank located in Milwaukee, Wisconsin.

The bank's ratings for safety and soundness are a little weak: 2 stars (problematic) at BauerFinancial and 2 stars (below peer group) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 1999 (FDIC Certificate # 34818).

American Eagle Bank of Chicago continues to offer a competitive 29-month CD special with a 2.50% APY. It had been 2.75% last year. Minimum deposit is $1,000. The bank also has a promotion for its Platinum NOW Checking account with a 1.75% APY guaranteed for 3 months. Direct deposit is required. Minimum balance is $500 to obtain APY and to avoid a $10 fee. These rates are listed in the bank's Chicago promotions page as of 2/2/2010.

One nice feature to note of the bank's CDs is a mild early withdrawal penalty. According to the small print at the bottom of the bank's rate table, it's 90 days of interest for terms over 12 months.

Accounts can only be open by residents of the Chicago metro area and current customers.

This promotion appears to only be available in Chicago. The bank's other branch in South Elgin doesn't list these promotions.

American Eagle Bank of Chicago's ratings for safety and soundness remain the same as I reported last year: 3½ stars (good) at BauerFinancial and 2 stars (below peer group) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 2007 (FDIC Certificate # 58514).

Update 2/19/2010: The 12-month CD rate has increased to 2.10% APY for $10K minimum. However, the 24-month CD rate has fallen to 2.00% APY

Cascade Bank is offering some good deals on CDs and checking accounts. Its two most competitive CDs are the 2.00% APY 12-month CD and a the 2.50% APY 24-month CD. Minimum deposit is $10,000. The bank's Main Street Checking is also a good deal with a 1.60% APY for balances of $100K to $250K. It's 1.90% APY for over $250K. For more typical balances of $2.5K to $100K, the rate is 1.25% APY. Minimum balance of $1K is required to avoid a monthly service charge. These rates are listed in the bank's deposit rates page as of 2/2/2010.

Two small perks if you open one of the bank's checking account include a free sandwich maker and up to $25 in cash ($2 for each old check card or pad of checks). This is one reason to keep those old checks.

It appears that a branch visit is required to open an account. Branches are located in several cities in Washington State including Bellevue, Issaquah, Shoreline, Burlington, Everett and Marysville.

The bank's ratings for safety and soundness are a little weak: 2 stars (problematic) at BauerFinancial and 1 star (lowest) at Bankrate.com. Both ratings are based on 9/30/09 financial data. The bank has been a FDIC member since 1957 (FDIC Certificate # 28823).