Dedicated to Deposits: Deals, Data, and Discussion

New CD and Savings Account Auction Service at MoneyAisle


MoneyAisle was just launched today. It's an online auction marketplace where consumers can have banks bid against each other on CDs and savings accounts in live auctions for each consumer request. This Boston Herald article reports that MoneyAisle "is coming out of stealth mode today after nearly three years of work and millions of dollars of investment. The company already has 43 employees ready to jump into action this morning."

I just gave MoneyAisle a try. It has several nice features:

  • Register and start auctions without giving any personal info (only an email address was required)
  • It's very simple to use
  • You can start auctions without commitments

I only have one dislike, but it's a major one: I didn't get any decent deals. I initiated one auction for a 6-month CD and one for a high yield savings account. I selected the state of Texas. Here are the results:

  • 6-Month CD, $10K initial deposit - Winning bid: 3.28% APY at The Newburyport Five Cent Savings Bank. This is the same rate listed on the bank's rate table
  • High Yield Savings Account, $10K initial deposit - Winning bid: 3.10% APY at Beverly National Bank. This is the same rate listed for their online savings account.

In my last weekly summary you can find many banks offering higher yields for both 6-month CDs and savings accounts. MoneyAisle's simplicity makes it worthwhile for you to use before you commit on a CD, but I would recommend not to rely on it as your main source of rates. Use my blog and the resources that I list here before you commit on a CD. Let me know in the comments if you have any better luck with the deals.

Thanks to Shrazzy who mentioned this new service in the Finding-the-best-deals post.



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Comments
11 Comments.
Comment #1 by Anonymous posted on
Anonymous
This is nothing new.

Many times in the past 20 years, a company pups up with a stupid idea which never worked for a simple reason:

Banks never compete to undermine each other.

The sole purpose is to get investors excited and invest in the idea, so few people with reap a tremendous profits and then will either sell the company to a bigger sucker or list it on the stock market for more profits of uneducated investors.

Its a waist of time to even place a bid, as is with companies who auction Bonds, Mortgages, T-bills, CDs and other securities.

Rob

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Comment #2 by Anonymous posted on
Anonymous
Agreed. MoneyTree, MoneyAisle, and other bank competing LOAN AND ACCOUNT websites are for suckers. They are not the cheapest rates you can get.

A rate for 40,000 cash for savings showed up as 3.40% while I am getting higher rate right now.

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Comment #3 by Anonymous posted on
Anonymous
Well said Rob, I will add this too:
Ben is giving away money at 2% as much as Banks are willing to take.

Until "Print me a Buck Ben" has the window open sign, do not expect the Banks to give good rates to consumers.

The auction web site is a waist of time and does not provide a service that is expected to do. It is an open wish list that never delivers the goods.

I would never bid on it.......

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Comment #4 by O-Qua Tangin Wann (anonymous) posted on
O-Qua Tangin Wann
I just did a test run at MoneyAisle, for a Money Market Account. I put in that I can deposit $100,000.

The top bid: 3.4%.

So, it is bullsh*t!

I can get 4% APY at Alliant and AARP.

~O-Qua Tangin Wann

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Comment #5 by Lenny (anonymous) posted on
Lenny
It shouldn't shock you too badly that you can't get a good deal going through a third-party website, because the banks undoubtedly have to pay a fee to MoneyAisle, which means they have less money to pay to you.

Ever try Autobytel? Same thing. You'll get a much better deal on your own, since you won't have that Autobytel middleman jacking up the cost of the car.

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Comment #6 by Anonymous posted on
Anonymous
I don't really consider this a true auction process. I have a really hard time believing a bank is going to hire a person to bid for your money. They just enter in there usual current rate and if it matches your criteria and is the highest, their name pops up. Not what I call an auction.

Reminds me of the commercial where all the mortgage lenders are lined up and fighting over lending you money.

Might be a good service for the truely lazy...

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Comment #7 by Anonymous posted on
Anonymous
I tried to get a rate ("bid") for $100,000 deposit for 3 month and 6 month CD in Massachusetts.
Countrywidebank.com gives better rates. enough said.

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Comment #8 by Anonymous posted on
Anonymous
1) Short-term it's mildly fun to watch. I priced 150K moneymarket in IL and got 3.4% - lower than my current deposits at Countywide, AARP and Alliant.

2) Mid-term, it may be a slight downer for higher rates. Certain people who do not now view BankingGuy or FW will see this, will be drawn out of their caves to try it, will perhaps see that an anonymous winning-bidder bank will pay more than their "family bank" is, and will make some kind of switch. This will lead to what is sometimes called the "FatWallet Effect" - those banks/CUs offering higher rates will be swamped, and will lower their rates or drastically reduce their customer base.

A swing towards a more efficient marketplace in a particular investment category ALWAYS leads to regression of returns towards the mean - ALWAYS.

3) Long-term it doesn't matter, because they won't be around. If you want to find the best rates go to the aforementioned blogs. others like them, or Bankrate or others like them.

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Comment #9 by Banking Guy (anonymous) posted on
Banking Guy
Scott left the following comment in the finding-deals post:

I tried it today and bid for $100k 6 Month, Got an offer for 3.70% from newdominionDIRECT.com, Checked their site and saw their normal rate for that CD was 3.40% So a decent premium over regular rate.

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Comment #10 by tuphat (anonymous) posted on
tuphat
FWIW -- Review of MoneyAisle from an industry perspective:

http://www.netbanker.com/2008/06/moneyaisle_launches_realtime_d.html

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Comment #11 by Kevin Cafferty (anonymous) posted on
Kevin Cafferty
Hi everybody, I hope I'm not crashing the party here, but I work on MoneyAisle and wanted to clear something up:

"I don't really consider this a true auction process. I have a really hard time believing a bank is going to hire a person to bid for your money. They just enter in there usual current rate and if it matches your criteria and is the highest, their name pops up. Not what I call an auction."

My response: Our auction system, while automated, is more dynamic than what has been described above. It has to be automated to allow users access to it 24/7, but it's more complicated than banks simply entering their current rates.

As for other comments about our rates: if you can find a better rate for your deposit elsewhere, that's great news. We're only finishing up our first week out in the world and as more banks are added to our system the rates offered, based on the competition created, will go up. Considering MoneyAisle is free to use and doesn't take up much of your time, my feeling is that it's worth it to check.

Kevin Cafferty
Senior Web Producer, neoSaej

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