Bank Deals Blog http://www.depositaccounts.com/blog/ DepositAccounts.com provides advice and tools to help choose the right account for short and mid-term investments. www.depositaccounts.com Sat, 11 Feb 2012 09:06:11 GMT webmaster@depositaccounts.com webmaster@depositaccounts.com Two Banks in Illinois & Indiana Closed by Regulators http://www.depositaccounts.com/blog/2012/02/two-banks-in-illinois-indiana-closed-by-regulators.html http://www.depositaccounts.com/blog/2012/02/two-banks-in-illinois-indiana-closed-by-regulators.html Sat, 11 Feb 2012 02:52:00 GMT Two banks failed this Friday which brings the total number of failures for the year to nine. Last year at this time there had been 18 bank failures. This shows how the pace of closures has slowed. ... Two banks failed this Friday which brings the total number of failures for the year to nine. Last year at this time there had been 18 bank failures. This shows how the pace of closures has slowed.

Charter National Bank and Trust in Illinois was the first failure. The FDIC arranged for Barrington Bank & Trust Company, N.A. to assume all deposits. SCB Bank in Indiana was the second failure. All deposits were assumed by First Merchants Bank, N.A.

Both of the acquiring banks have not posted their plans for CDs from the failed banks. The FDIC has the same paragraph for both banks in the Q&As regarding the CD rates:

Interest on deposits accrued through close of business on February 10, 2012 will be paid at your same rate. [The failed banks'] rates will be reviewed by the new bank and may be lowered; however, you will be notified in writing of any changes. You may withdraw funds from any transferred account, regardless of whether your interest rate changes, without early withdrawal penalty until you enter into a new deposit agreement with the new bank.

On February 1st we saw what an acquiring bank can do to CD rates. When Tennessee Commerce Bank (TCB) failed on January 27, Republic Bank assumed its deposits. On Tuesday January 31st Republic Bank decided to cut all TCB CD rates to 0.05% effective Saturday January 28. This shows why it's a good idea for CD holders to be proactive when their banks fail. You may lose weeks of interest if you wait for your bank to notify you.

Credit Union Liquidations

I had missed the first credit union liquidation of the year. It was Eastern New York Federal Credit Union in New York which was liquidated by the NCUA on January 27. The NCUA was able to find another credit union to assume all of the members, assets, loans and debts.

Below is the summary of Friday's bank failures and the recent credit union liquidation.

8th Bank Failure of 2012 (1st in Illinois)

  • Closed Bank: Charter National Bank and Trust, Hoffman Estates, IL
  • FDIC Press Release
  • Size: 2 branches, $93.9 million in assets and $89.5 million in deposits
  • Acquiring Bank: Barrington Bank & Trust Company, N.A., Barrington, IL
  • Possible Uninsured Deposits: all deposit accounts, including brokered deposits, have been assumed by Barrington Bank & Trust Company, N.A.
  • Rate Changes: Charter National Bank and Trust’s rates will be reviewed by the new bank and may be lowered (FDIC's Q&A)
  • Estimated Cost to Deposit Insurance Fund: $17.4 million
  • Enforcement Action: OCC 4/29/10 Consent Order, OCC 12/20/11 PCA
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 265.66% at DepositAccounts.com (see financial rating note)
9th Bank Failure of 2012 (1st in Indiana)

  • Closed Bank: SCB Bank, Shelbyville, IN
  • FDIC Press Release
  • Size: 4 branches, $182.6 million in assets and $171.6 million in deposits
  • Acquiring Bank: First Merchants Bank, N.A., Muncie, IN
  • Possible Uninsured Deposits: all deposit accounts, excluding the Cede & Co. deposits, has been assumed by First Merchants Bank, N.A.
  • Rate Changes: SCB Bank’s rates will be reviewed by the new bank and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $33.9 million
  • Enforcement Action: OTS 5/16/11 C&D Order
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 198.26% at DepositAccounts.com (see financial rating note)

1st Credit Union Liquidation of 2012 (Jan 27)

Financial Ratings Notes: 0 star is lowest at BauerFinancial, 1 star is lowest at Bankrate.com & DepositAccounts.com, Texas Ratios over 100% is considered at risk. Ratings are based on September 2011 data.

References:

]]> Survey of the Best CD Rates for February 10, 2012 http://www.depositaccounts.com/blog/2012/02/survey-of-the-best-cd-rates-for-february-10-2012.html http://www.depositaccounts.com/blog/2012/02/survey-of-the-best-cd-rates-for-february-10-2012.html Fri, 10 Feb 2012 22:58:00 GMT A few of the internet banks cut their CD rates this week. Ally Bank 's 5-year CD rate fell from 1.79% to 1.74% APY. This 5-year CD isn't high enough to make my 5-year CD list. I still include this CD ... A few of the internet banks cut their CD rates this week. Ally Bank's 5-year CD rate fell from 1.79% to 1.74% APY. This 5-year CD isn't high enough to make my 5-year CD list. I still include this CD due to its mild early withdrawal penalty of 60 days of interest.

The other two internet banks that cut rates were American Express Bank and Nationwide Bank.

American Express Bank's 2-year CD rate plummeted from 1.30% to 0.80% APY. That knocked it off my 2-year CD list. I hope I'll never have to include sub-1.00% rates on my 2-year CD list. If you're looking for a 2-year CD from a bank, CIT Bank's 2-year Achiever CD with a 1.26% APY is the best deal. Not only does it have a top rate, but it also has an add-on and bump-up feature (see my CIT Bank CD review).

Nationwide Bank reduced its 4-year CD rates by 5 basis points. The Jumbo 4-year CD rate is now 1.70% APY. Nationwide Bank's 4-year CD remains on top for nationally available banks.

For the 5-year CDs, there's a new bank leader. State Bank of India (New York) is offering a 2.02% APY on its 5-year CD. I did another review of this bank and its CDs on Thursday. People in any state can open a CD by mail, but as I described in my review, the bank doesn't make it easy.

State Bank of India's 5-year CD yield just edges out US Bank's 59-month CD special which continues to have a 2.00% APY. You will probably find the CD application process easier at US Bank. However, US Bank has a very harsh early withdrawal penalty (see my US Bank CD review).

As you can see below, the best long-term CD rates are from all-access credit unions like PenFed, Fort Knox FCU and Andrews FCU. Their CD rates exceed the banks by up to 50 basis points.

Update 10:00pm ET 2/10/2012: Digital Credit Union CD rates fell soon after the post was first published. The 5-year Jumbo CD rate is now 1.86% APY with a relationship and 1.61% APY without a relationship. All DCU CDs have been removed from the lists below.

Local CD Deals

We lost another 3-percent CD this week. El Paso Area Teachers FCU reduced its 5-year Jumbo CD yield from 3.03% to 2.98% APY. That leaves only two institutions in the 3-percent club: 3.35% APY 10-year CD at San Antonio Credit Union (SACU) and the 3.03% APY 6-year CD at Tecumseh Federal Bank in Nebraska. You can find a few more institutions with 3.00%+ CDs in our CD rate tables, but these are small banks in low populated areas or small credit unions with very narrow fields of membership.

I added two local deals this week. The first addition is a 2.33% APY 5-year Jumbo CD at Schools Federal Credit Union in Los Angeles. This is a relationship rate. Without a relationship, the rate is 10 basis points lower. The non-Jumbo rates are just a little bit lower.

The second addition is from Dupaco Community Credit Union which has branches in the Tri-State Area of Illinois, Iowa and Wisconsin. I added its two competitive CD specials: a 1.30% APY 15-month CD and a 1.91% APY 35-month CD.

Long-Term CD Break Strategy

For the short-term CDs in my lists, you might notice CDs with the note "5-year CD closed after X years". These take into account the yield after the early withdrawal penalty is applied. Since Ally Bank's 5-year CD only has a 60-day interest penalty, it's still a good deal when closed early even with the recent rate cuts.

The risks of planning for early withdrawals of long-term CDs was recently highlighted by another credit union which raised the early withdrawal penalty on existing CDs. The credit union is CEFCU which is based in Illinois. I have more details in this blog post. CEFCU is now the second credit union which has raised the early withdrawal penalty on existing CDs. Last year Fort Knox FCU did the same thing (see my blog post).

Note About the CD Survey

As I described in my rate table overview, you can use our CD rate tables to find the best rates for both nationally available CDs and local CDs. This CD survey blog posts are intended to highlight nationwide CD deals that may not be apparent in the tables. For example, I'll include the post-penalty yields of a few long-term CDs.

The CD survey blog posts are also intended to highlight the local CD deals that are available in large metro areas. There are many high CD rates, but most of these are at small banks in rural areas or at small credit unions with very narrow fields of membership. In these local CD surveys, my focus is on local CD deals that are in big cities or that are available in large areas of a state.

Yields Accurate as of February 10, 2012

Under 1-Year CD Rates

  • Noteworthy Local Deals

1-Year CD Rates

  • Noteworthy Local Deals

18-month CD Rates

  • Noteworthy Local Deals

2-Year CD Rates

  • Noteworthy Local Deals

3-Year CD Rates

  • Noteworthy Local Deals

4-Year CD Rates

  • Noteworthy Local Deals

5-Year CD Rates

  • Noteworthy Local Deals

Over 5-Year CD Rates

  • Noteworthy Local Deals

Note: All rates listed above are Annual Percentage Yields (APY) which factor in compounding.

Edit 10:00pm ET 2/10/2012: Digital Credit Union CD rates fell soon after the post was first published. All DCU CDs have been removed from the lists.

]]> TD Ameritrade Online Cash Services Account & Bonus Review http://www.depositaccounts.com/blog/2012/02/td-ameritrade-online-cash-services-account-bonus-review.html http://www.depositaccounts.com/blog/2012/02/td-ameritrade-online-cash-services-account-bonus-review.html Fri, 10 Feb 2012 15:14:00 GMT Several online brokers now provide checking account services with their brokerage accounts. A popular one is Charles Schwab and its Schwab Bank High Yield Investor Checking . Also popular is Fidelity ... Several online brokers now provide checking account services with their brokerage accounts. A popular one is Charles Schwab and its Schwab Bank High Yield Investor Checking. Also popular is Fidelity Cash Management Account. Both offer FDIC-insured accounts, no monthly fees, free checks and ATM fee reimbursements. TD Ameritrade has joined in with its Online Cash Services. Like Schwab and Fidelity, TD Ameritrade offers FDIC protection, no monthly fees, free checks and ATM fee reimbursements. TD Ameritrade is now offering an extra incentive for its Online Cash Services. TD Ameritrade brokerage customers can receive up to $200 for opening the Online Cash Services account and performing the following activities:

  • $100 for making 4 debit card purchases valued at a minimum of $10 each by 3/31/12
  • $100 for using online bill pay to pay 4 bills totaling $100 by 3/31/12

Here's the link to the TD Ameritrade promotion page link. Credit for this find goes to FW member dzyr4tt who posted it in this FW thread. Below is the offer's small print. Note, it requires bill pay payments "be made to valid, third-party service providers or merchants".

Offer valid for TD Ameritrade clients who sign up for a TD Ameritrade Visa® debit card and/or bill pay by 3/31/12. Clients who successfully sign up for the TD Ameritrade Visa® debit card and make 4 purchases valued at a minimum of $10 each by 3/31/12 will receive $100 cash. Clients who successfully enroll in TD Ameritrade’s bill pay service and pay 4 bills totaling $100 by 3/31/12 will receive $100 cash. Bill pay payments must be made to valid, third-party service providers or merchants. Any bill pay transactions prior to 1/15/12 will not be counted toward the offer. Offer is not transferable and not valid with IRAs or other tax-exempt accounts, accounts using the Amerivest service, or TD Ameritrade Institutional accounts. Offer not valid for existing debit card holders or bill pay users. ATM withdrawals do not qualify as valid purchases. Please allow 2-3 weeks from the date TD Ameritrade receives your request for Online Cash Services to receive your debit card. The $100 credits will be applied to the account 5-7 business days from offer end date of 3/31/12. Limit one debit card offer and one bill pay offer per account. TD Ameritrade reserves the right to restrict or revoke this offer at any time. This is not an offer or solicitation in any jurisdiction where we are not authorized to do business. (Offer code: OCSDBT100 & OCSBP100).

If you don't have a TD Ameritrade brokerage account, you should be able to open one and then take advantage of this promotion. There are also promotions for opening a new TD Ameritrade brokerage account. The FW thread lists several partner offers that allow you to earn Airline miles such as Delta SkyMiles, United MileagePlus and American Airlines AAdvantage. There's also an offer in which you can get a cash bonus of between $100 and $600 based on the amount you fund the brokerage account with.

Money in the brokerage account isn't FDIC insured unless you invest in brokered CDs or other FDIC-insured accounts. TD Ameritrade CD Center page describes the brokered CDs that you can purchase with your brokerage account.

TD Ameritrade provides an Insured Deposit Account (IDA) for its Online Cash Service. According to TD Ameritrade's small print:

Cash in the IDA is held at TD Bank, N.A., TD Bank USA, N.A., or both. Assets at each bank will be eligible for FDIC insurance of up to $250,000 per depositor. Because there are two banks in the IDA program, IDA balances could be covered for up to $500,000 per depositor. TD Bank N.A. and TD Bank USA, N.A. are affiliates of TD Ameritrade.

One downside with TD Ameritrade's IDA is that the interest rate is very low (0.01% rate). This is actually a downside with all the checking accounts from the online brokers. Schwab Bank High Yield Investor Checking used to offer a competitive interest rate. It's now very low with a rate of 0.10% as of 2/10/2012.

]]> Top Savings Account Rate in Texas at Collin Bank - Local Only http://www.depositaccounts.com/blog/2012/02/top-savings-account-rate-in-texas-at-collin-bank-local-only.html http://www.depositaccounts.com/blog/2012/02/top-savings-account-rate-in-texas-at-collin-bank-local-only.html Fri, 10 Feb 2012 15:10:39 GMT Collin Bank is offering a good deal on its Affinity Savings Account. It has an interest rate of 1.26% APY on all balances of $100 and above. This is listed in the bank's Affinity Savings page as of 2/ ... Collin Bank is offering a good deal on its Affinity Savings Account. It has an interest rate of 1.26% APY on all balances of $100 and above. This is listed in the bank's Affinity Savings page as of 2/10/2012. There is a $15 monthly service fee if a $2,500 minimum balance isn't maintained.

I last reported on this bank in July 2010 when it was offering some competitive CD rates. Its current CD rates are not competitive.

It appears that a branch visit is required to open an account. It's a small bank, but it's expanding. It recently added an office in Plano. Its main office is located in Frisco.

The bank has an overall health score at DepositAccounts.com of 4 stars (out of 5) with a Texas Ratio of 19.70% (average) based on September 2011 data. Please refer to our financial overview of Collin Bank for more details. The bank has been a FDIC member since 2008 (FDIC Certificate # 58610).

How This Savings Account Rate Compares

This rate is 11 basis points higher than the best savings account rate that's nationally available. The best rate is 1.15% APY at Flagstar Bank (4-mo intro rate), at My Banking Direct and at AmTrustDirect. These rates are accurate as of 2/10/2012.

The one downside with savings accounts is that typically there is no rate guarantee. Rates can fall at anytime, and they can fall substantially. The latest example of this is the savings account at UFB Direct. For five months, this account had a top yield of 1.30%. In the last three weeks the rate has fallen 35 basis points. The yield is now 0.95% as of 2/10/2012.

Searching for The Highest Savings Account Rates

The best rates can be from savings accounts, money market accounts or checking accounts. You can use our tables to find the best rates:

]]> Top CD Rates at State Bank of India - NYC & Chicago Branches http://www.depositaccounts.com/blog/2012/02/top-cd-rates-at-state-bank-of-india-nyc-chicago-branches.html http://www.depositaccounts.com/blog/2012/02/top-cd-rates-at-state-bank-of-india-nyc-chicago-branches.html Thu, 09 Feb 2012 18:00:23 GMT State Bank of India is a foreign bank, but it has U.S. branches with FDIC insurance in New York and Chicago . I first reported on the New York branch in 2005. They have long offered competitive CD rat ... State Bank of India is a foreign bank, but it has U.S. branches with FDIC insurance in New York and Chicago. I first reported on the New York branch in 2005. They have long offered competitive CD rates, and they can open CDs by mail for people in any state. Currently, the best deal is the 5-year CD which has a 2.02% APY. Minimum deposit is $5,000. Early withdrawal penalty is 270 days of interest. This rate and a description of the CD features are listed in the bank's CD accounts page as of 2/09/2012. According to this page, rates should remain effective through February 14.

The Chicago branch can also open CDs by mail. Its short-term CD rates are currently higher than the New York branch. The best ones include a 1.16% APY 1-year CD and a 1.51% APY 3-year CD. These require a minimum deposit of $95K. For a $2,500 minimum deposit, the rates are 10 basis points lower. These rates are listed at the rate sheet at the SBI Chicago deposit department page as of 2/9/2012. According to the rate sheet, these rates are effective through February 14.

In the past when I called the New York branch, I experienced delays in reaching customer service. I did not have any delay today. For the New York branch, I called (212) 521-3282, and I was immediately connected with a knowledgeable customer service representative. For the Chicago branch, I called their toll-free number at 800-724-5780. I had to go through an automated answering service, but I was able to connect with a CSR without much wait.

The main downside with the New York branch is the lack of online banking. I was told they will mail you a document of the CD after you mail in the application and check. The rate will lock at the time they receive the application. Also, they require you to have one of the forms notarized. At maturity, they require you to mail or fax a letter instruction. They can either mail you a check or do a wire transfer.

The instructions at the Chicago branch were similar to what I was told by the New York branch. One exception is that the Chicago branch rep said they do offer online banking in which you can check on your CD balance.

There's also a branch in California that's called State Bank of India (California), but its CD rates are currently not as competitive as the NYC or Chicago branches.

The New York, Chicago and California branches all have separate FDIC charters. However, for the New York and Chicago branches, the FDIC states the following:

State Bank of India, New York, NY (FDIC Cert# 33682) and State Bank of India, Chicago, IL (FDIC Cert# 33664) are branches of the same banking institution. Therefore, deposits held in these two branches do NOT receive separate FDIC insurance coverage. Deposits held in the same capacity at each office would be added together prior to applying the insurance limit for that ownership type.

Refer to the FDIC page for the State Bank of India, New York and the FDIC page for State Bank of India, Chicago for more details. According to Wikipedia, State Bank of India is the largest bank in India.

How These CD Rates Compare

The 5-year CD rate at State Bank of India, New York is currently the best 5-year CD rate that's available nationwide at a bank. The next best is 2.00% APY for a 59-month special CD at US Bank.

Higher rates are available at all-access credit unions. The best 5-year CD rate that's nationally available is 2.60% APY at Digital Credit Union. This requires a $25K minimum deposit and Relationship Checking. Without this relationship, the rate is 2.35% APY for a $25K minimum and 2.25% APY for a $500 minimum deposit.

For a 1-year CD, the best rate is 1.16% APY at Pentagon Federal Credit Union.

These rates are accurate as of 2/9/2012.

Searching for the Best CD Rates

To search for the best nationwide CD rates and the best CD rates in your state, please refer to the CD rates section of DepositAccounts.com.

]]> Double Check Your Ally Bank CD Interest http://www.depositaccounts.com/blog/2012/02/double-check-your-ally-bank-cd-interest.html http://www.depositaccounts.com/blog/2012/02/double-check-your-ally-bank-cd-interest.html Thu, 09 Feb 2012 17:55:00 GMT If you have Ally Bank CDs, you might want to double check the interest that Ally credited to your account for 2011. A reader informed me that Ally had not paid interest in 2011 to one of his 5-year CD ... If you have Ally Bank CDs, you might want to double check the interest that Ally credited to your account for 2011. A reader informed me that Ally had not paid interest in 2011 to one of his 5-year CDs. After several calls and over a month, Ally finally fixed the problem with his CD and credited the proper interest. Below is an excerpt of his first email to me about this issue:

They have not paid interest in 2011 to one of my 5-year CD accounts. I contacted them more than 3 weeks ago regarding the issue, and it has not yet been resolved. They could not give me an exact answer about the reason for this, and I don't see any results after contacting them several times.

I had tried to help by emailing my Ally contact to spur action, but it's not clear if that had helped. The reader just notified me that Ally finally fixed the issue:

Finally Ally credited my CD with last year's interest, which posted yesterday, and apparently it will be counted towards 2011 interest payments in the amended 1099-INT form that they will send me by the end of February.

I talked to someone in the executive resolution center. I was told that a lot of customers are having this issue due to "some" system error. Surprisingly, instead of finding the source of the error and solving it for all the accounts involved, they are dealing with this on a case by case basis, correcting the interest on the accounts for which they receive customer complaints. This is very worrisome, as I don't know what would have happened if I didn't catch the error. They "hope" that the error will be solved during the year so that this does not happen again, but of course, they could not assure this. They did offer to close the CD and open a new one replicating the terms hoping that the issue will not arise in the new CD.

To be honest, I am very disappointed with Ally. Who knows what other system issues they might have. I will take a closer look at all my accounts regularly from now on.

Ally customers who are not careful to review their accounts may miss this error, and it appears Ally may not fix the error unless there's a complaint. I doubled checked the interest credited on my Ally CDs, and all of the CDs were properly credited. This is probably a good practice for any of your bank accounts. It doesn't hurt to double check how the bank or credit union credits the interest. I'm surprised a bank could make such a mistake, but I suppose with any software, there's always the possibility of a bug.

Hat tip to the reader for sharing his experiences and getting the word out on this issue. If you had a good or bad experience at your bank or credit union, please consider sharing your experience using our bank review service.

]]> Top CD Rates at Dupaco Community Credit Union in Parts of IA, IL & WI - Local Only http://www.depositaccounts.com/blog/2012/02/top-cd-rates-at-dupaco-community-credit-union-in-parts-of-ia-il-wi-local-only.html http://www.depositaccounts.com/blog/2012/02/top-cd-rates-at-dupaco-community-credit-union-in-parts-of-ia-il-wi-local-only.html Thu, 09 Feb 2012 17:52:58 GMT Dupaco Community Credit Union is offering two CD specials with very competitive rates: 1.91% APY for 35 months and 1.30% APY for 15 months. Minimum deposit is $5,000. The credit union also has competi ... Dupaco Community Credit Union is offering two CD specials with very competitive rates: 1.91% APY for 35 months and 1.30% APY for 15 months. Minimum deposit is $5,000. The credit union also has competitive rates on its standard long-term CDs. The two best are a 2.41% APY 5-year CD and a 2.01% APY 4-year CD. These rates are listed in the credit union's certificate rates page as of 2/9/2012.

Dupaco used to have a good deal on its High-Yield Savings Account. It's still a good deal for those who already have this account. The top yield is 1.61% APY for a $200K balance. However, Dupaco is no longer allowing members to open new accounts. The Investors Choice Money Market Account appears to still be available, and it pays a top rate of 1.00% APY for a $100K balance as of 2/9/2012.

Membership is open to anyone who lives or works in one of 28 counties of Iowa, Illinois and Wisconsin. Please refer to the credit union's Becoming a Member page for the full details. Membership requires a minimum balance of $25 in the savings account.

Dupaco Community Credit Union branches are located in the Iowa cities of Asbury, Dubuque, Dyersville, Cedar Rapids, Manchester, in the Illinois city of Galena, and in the Wisconsin city of Platteville.

The credit union has an overall health score at DepositAccounts.com of 5 stars (out of 5) with a Texas Ratio of 6.96% (excellent) based on September 2011 data. Please refer to our financial overview of Dupaco Community Credit Union for more details. The credit union is federally insured by the NCUA (Charter # 64049).

Searching for the Best CD Rates

To search for the best nationwide CD rates and the best CD rates in your state, please refer to the CD rates section of DepositAccounts.com.

]]> Senator Asks Bernanke About Savers Being Punished http://www.depositaccounts.com/blog/2012/02/senator-asks-bernanke-about-savers-being-punished.html http://www.depositaccounts.com/blog/2012/02/senator-asks-bernanke-about-savers-being-punished.html Wed, 08 Feb 2012 16:43:00 GMT Last week I reviewed Fed Chairman Ben Bernanke's testimony before the House Committee on the Budget on the economic outlook for 2012. Yesterday, Bernanke gave a similar testimony in the Senate Budget ... Last week I reviewed Fed Chairman Ben Bernanke's testimony before the House Committee on the Budget on the economic outlook for 2012. Yesterday, Bernanke gave a similar testimony in the Senate Budget Committee Hearing, and like last week, Bernanke was asked a few tough questions about zero interest rates.

I think it's important to know what members of Congress are asking Bernanke and what Bernanke is saying to them. First, it's nice to see that members of Congress are expressing similar concerns that we have. It probably won't change Bernanke's plans, but at least he's hearing the concerns. Second, it can guide us on an online petition that I discussed on January 26th. I will have more on the petition later this week.

This Washington Post article has a good review of Tuesday's Senate hearing. The main takeaway from the article is that it's going to take a lot more reduction in the unemployment rate before the Fed changes its commitment of ultra low rates until late 2014.

I reviewed the C-SPAN video of the Senate hearing. In the two hours of Chairman Bernanke's testimony, I found the following exchange between Senator Pat Toomey (R-PA) and Chairman Bernanke most relevant for savers. This exchange started at approximately 1:28:30 into the hearing. I transcribed this exchange below, and I highlighted the exchange that specifically talked about savers.

Senator Pat Toomey (R-PA):

It seems unlikely to me anyway that the Fed would pursue such a extremely accommodative monetary policy as it has been pursuing and is pursuing if it weren't for the employment mandate. I'm concerned about some of the unintended consequences of maintaining zero interest rates, negative real interest rates. And I wonder if you would comment on some of these.

When I think about some of the implications, we have savers being punished for this, at least twice, once by virtue of the fact that after sacrificing their whole lives to accumulate savings, they get no return, and then, the very real possibility that the value of those savings will be eroded.

Secondly, we're encouraging excessive risk taking.

Thirdly, it seems to me this drives a misallocation, certainly has the potential, to drive a misallocation of investment, and I would argue, the risk of creating bubbles. In fact, it's hard not to see the U.S. Treasury market as a bubble right now.

Lastly, doesn't this enable the excessive deficits that we're running here, in part because they're funded at artificially low interest rates?

So these are some of the concerns I have from this policy, and I wonder if you would just comment on them.

Chairman Bernanke:

I don't know if I can cover all of them.

Let me first say that there are single mandate central banks like the Bank of England and the ECB, which have policies very similar to the Fed. Given that inflation is close to target, I don't think we would be doing radically different things if we had a single mandate at this particular point in time.

We're quite aware of these costs and risks. I've talked about them in speeches. It's one of the reasons we discuss the efficacy and risks associated with the policies as part of the overall discussion.

With respect to say savers, for example, it's true that low interest rates reduce the returns that savers get on their savings, but I would make the general point that savers just don't necessarily hold say Treasury bonds. They also hold corporate debt, stocks and a variety of other securities. And the returns of those securities depend very importantly on the strength of the economy. So we're trying to strengthen the economy. We're helping to improve the returns to savers.

To some extent on risk taking, to some extent, part of the reason for the policy is to move people away from very conservative liquid positions slightly more into riskier positions that involve investment and lending and so on that would help promote strength in the economy. We don't want to go too far, and we're very attentive to that, and we have greatly expanded our ability to monitor the financial system and to watch out for problems and to try to address them. I've been in many conversations with insurance companies, pension funds, and so on.

On misallocation, we're trying to get the economy back to a more full employment situation. When we're this far away from full employment, it's not obvious that the investments that are being made are the right investment. They may be insufficient, for example, because there's not enough demand for product.

I guess the last comment I would make, you asked me before about deficits, and I understand that concern, but I think that the effect of fed policy, independent of all the other factors, on Treasury rates is modest, and in any case, rates will rise eventually, and if the investors would lose confidence in U.S. federal fiscal policy, there is nothing the Fed could do to prevent those rates from rising. So I trust that Congress would understand that independent of the Fed's policy here, which is aimed at strengthening the economy which also helps deficits, that it's extremely important to be looking ahead and making appropriate plans for stabilizing the deficit.

]]> Competitive CD Rates at Quontic Bank in New York - Local Only http://www.depositaccounts.com/blog/2012/02/competitive-cd-rates-at-quontic-bank-in-new-york-local-only.html http://www.depositaccounts.com/blog/2012/02/competitive-cd-rates-at-quontic-bank-in-new-york-local-only.html Wed, 08 Feb 2012 16:39:02 GMT Quontic Bank is offering several competitive mid-term and long-term CD and IRA CD rates. These include a 1.51% APY 2-year CD, a 1.76% APY 3-year CD, a 2.01% APY 4-year CD and a 2.27% APY 5-year CD. Mi ... Quontic Bank is offering several competitive mid-term and long-term CD and IRA CD rates. These include a 1.51% APY 2-year CD, a 1.76% APY 3-year CD, a 2.01% APY 4-year CD and a 2.27% APY 5-year CD. Minimum deposit is $1,000. These rates are listed in the bank's rate sheet as of 2/8/2012.

It's a small bank with two branches in Great Neck and Astoria, New York. It appears that a branch visit is required to open an account.

The bank has an overall health score at DepositAccounts.com of 5 stars (out of 5) with a Texas Ratio of 7.22% (excellent) based on September 2011. Please refer to our financial overview of Quontic Bank for more details. The bank has been a FDIC member since 2005 (FDIC Certificate # 57807).

How These CD Rates Compare

If you live in New York City and are looking for the best CD rates, you may want to see if you can join one of the NYC credit unions that offer top CD rates. The highest CD rates are offered by Self Reliance New York FCU. This credit union is one of the very few that still lists a CD with 3.00% rate (3.05% APY 5-year CD). As you can read in the comments of my last Self Reliance post, membership into this credit union isn't easy. Top CD rates are also available in NYC at LOMTO FCU and Greater Metro FCU, but these also have limited membership eligibility.

The best 5-year CD rate that's nationally available is 2.60% APY at Digital Credit Union. This requires a $25K minimum deposit and Relationship Checking. Without this relationship (which is difficult to get), the rate is 2.35% APY for a $25K minimum and 2.25% APY for a $500 minimum deposit.

The best nationally available 5-year CD rate at a bank is 2.00% APY (59-month CD special) at US Bank.

These rates are accurate as of 2/8/2012.

Searching for the Best CD Rates

To search for the best nationwide CD rates and the best CD rates in your state, please refer to the CD rates section of DepositAccounts.com.

]]> Competitive 5-Year CD Rate at BBVA Compass in Several States http://www.depositaccounts.com/blog/2012/02/competitive-5year-cd-rate-at-bbva-compass-in-several-states.html http://www.depositaccounts.com/blog/2012/02/competitive-5year-cd-rate-at-bbva-compass-in-several-states.html Tue, 07 Feb 2012 15:17:21 GMT It has been a while since BBVA Compass has offered competitive CD rates. BBVA Compass currently has one CD rate that's competitive. It's a 5-year CD with a 2.00% APY. Minimum deposit is $5,000, and th ... It has been a while since BBVA Compass has offered competitive CD rates. BBVA Compass currently has one CD rate that's competitive. It's a 5-year CD with a 2.00% APY. Minimum deposit is $5,000, and the maximum is $1 million. This is listed on its CD rates page as of the morning of 2/7/2012. Rates may vary by area. I've confirmed this rate for several locations including Southern California, Houston Texas and Jacksonville Florida.

BBVA Compass provides few CD details on its website. I had to call their Telephone Banking Department at 1-800-266-7277 (option 2) to find out some important details. I was told the early withdrawal penalty is equal to $25 plus 1% of the amount withdrawn. You can start the application by phone, but a branch visit is required to complete the application process. I was told they require new customers to live within 60 miles from a branch.

BBVA Compass hasn't been too friendly to depositors in the last year. As I described last year, it has added new and larger fees on its checking accounts. It also has not won many fans from its partnership with SmartyPig. Since BBVA Compass has become SmartyPig's bank partner, SmartyPig rates have gone down substantially.

BBVA Compass branches are located in Alabama, Arizona, California, Colorado, Florida, New Mexico and Texas.

BBVA Compass is the 31st largest bank in the nation and operates 716 branches in Texas, Alabama, California, Arizona, Florida, Colorado and New Mexico. It's under the bank holding company Banco Bilbao Vizcaya Argentaria S.A., the second largest bank in Spain.

The bank has an overall health score at DepositAccounts.com of 4 stars (out of 5) with a Texas Ratio of 14.75% (above average) based on September 2011 data. Please refer to our financial overview of BBVA Compass for more details. The bank has been a FDIC member since 1964 (FDIC Certificate # 19048).

How This CD Rate Compares

The best 5-year CD rate that's nationally available is 2.60% APY at Digital Credit Union. This requires a $25K minimum deposit and Relationship Checking. Without this relationship, the rate is 2.35% APY for a $25K minimum and 2.25% APY for a $500 minimum deposit.

The best 5-year CD rate at a bank is 2.00% APY (59-month CD special) at US Bank.

These rates are accurate as of 2/7/2012.

Searching for the Best CD Rates

To search for the best nationwide CD rates and the best CD rates in your state, please refer to the CD rates section of DepositAccounts.com.

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