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Retirement Savings: How Much Should I Save Each Month?More Drops in Online Savings Account Rates: ETrade, GMAC, Indymac..
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POSTED
ON BY Ken Tumin
The effect of last month's Fed rate cut continues to be felt. Some banks moved fast with large rate cuts (HSBC Direct), others had their rates creep down (AmTrustDirect), and others probably planned to wait a few weeks before cutting. Etrade is one of the wait-then-cut banks. It dropped the yield on its Complete Savings account from 5.05% to 4.70% APY today.
Perhaps there needs to be another category for the banks that are making two big rate cuts. E-LOAN did this with two 25 basis point rate cuts. Now GMAC Bank has done it. GMAC Bank dropped its Money Market Yield from 4.90% to 4.75% APY. Before the Fed rate cut, it had been 5.30% APY. Below is summary of the recent rate cuts of online savings and money market accounts:
There are still some online savings accounts that are holding on to their pre-Fed-rate-cut yields. It's likely these are just the wait-then-cut banks. It's either part of their strategy or they're just slow. I'll do a review of some of these banks in the next few days.
Thanks to the readers who have been providing updates on the rates.
Perhaps there needs to be another category for the banks that are making two big rate cuts. E-LOAN did this with two 25 basis point rate cuts. Now GMAC Bank has done it. GMAC Bank dropped its Money Market Yield from 4.90% to 4.75% APY. Before the Fed rate cut, it had been 5.30% APY. Below is summary of the recent rate cuts of online savings and money market accounts:
- IndyMac Internet First MMA: 5.50% APY (was 5.60%, 5.75%)
- KeyDirect MMS: 5.30% APY (was 5.35%)
- Etrade Complete Savings: 4.70% APY (was 5.05%)
- GMAC: 4.75% APY (was 4.90%, 5.30%)
There are still some online savings accounts that are holding on to their pre-Fed-rate-cut yields. It's likely these are just the wait-then-cut banks. It's either part of their strategy or they're just slow. I'll do a review of some of these banks in the next few days.
Thanks to the readers who have been providing updates on the rates.