Best Bank Account Interest Rates


Summary for Week Ending February 11, 2012

Economic data was light this week. The main driver of Treasury yields was the market's worries over a Greece bailout. Yields rose for the first four days of the week from optimism that Greece would receive a second bailout. Yields fell on Friday as fears increased of a default by Greece. The week ended with higher Treasury yields, but the 10-year Treasury yield remains under 2.00%.

We heard more from Bernanke this week in a Senate budget committee hearing. One Senator did a good job at pointing out to Bernanke the serious downsides of maintaining zero interest rates. The best we can hope for is that we won't see the FOMC push out its low rate commitment like it did last month. The Fed's new late-2014 commitment appears to have caused a change to the Fed funds futures charts. Those charts at the CME Group exclude most of the future FOMC meetings in 2012 and 2013. That makes sense since Bernanke admitted that it would take dramatic improvement in the economy for the Fed to pull in the late-2014 commitment.

The summary of the yields is shown below (Numbers are based on Yahoo bond rate data and the CME Group FedWatch.)

Treasury Yields:

  • 6-month: 0.11% up from 0.08% last week
  • 2--year: 0.27% up from 0.23% last week
  • 5--year: 0.82% up from 0.76% last week
  • 10-year: 1.98% up from 1.92% last week
  • 30-year: 3.14% up from 3.12% last week

Fed funds futures' implied probability for a higher rate by:

  • Dec 2013: 39.1%
  • Sep 2014: 80.5%

The FDIC was back in action this Friday with two bank closures. That brings the total number of bank failures for the year to 9. The pace of bank failures is slowing. Last year at this time there had been 18 bank failures.

Savings & Checking Account Rates

Rate cuts continue at UFB Direct. In three weeks UFB Direct has cut its Airline Rewards Savings account rate three times. The last cut was on Tuesday when its yield fell from 1.05% to 0.95%.

If you're going to choose an internet savings account with the highest yield, it's important to recognize that few accounts remain rate leaders over the long term. UFB Direct lasted for about 5 months. The current rate leaders are the two internet banks of New York Community Bank (AmTrustDirect and MyBankingDirect). Both continue to offer 1.15% APY on their money market accounts. Hopefully, these rates will continue, but as we learned with UFB Direct, they're unlikely to last for the long term. I reviewed AmTrustDirect's Premium e-Money Market Account in the previous week.

UFB Direct savings account was one of two internet savings accounts that had their rates drop below 1.00%. The other was SFGI Direct which cut its savings account yield from 1.01% to 0.91%. I now have just 7 accounts on my list with yields of at least 1.00%.

Reward Checking Accounts

Rates held steady in my short list of nationally available reward checking accounts. Several continue to have rates of at least 2.00% APY on balances up to $25K. That's looking better each day as internet savings account rates fall below 1.00%.

Also holding steady this week are the two remaining members of the 4.00% club: Coppermark Bank and Southwest Airlines FCU. These are reward checking accounts that pay 4.00% APY on balances of $25K. Neither are available nationwide. Coppermark Bank is local to parts of Oklahoma and Texas. Southwest Airlines FCU is primarily limited to Southwest Airlines employees and a few other employee groups.

To find the highest reward checking rates in your area, please refer to our reward checking rate table. This can be used to find accounts available nationwide and accounts with higher rates in your state. If you're new to these tables, my new rate table guide should be useful, and if you're new to reward checking, my blog post, 10 Common Traits of High-Yield Reward Checking, should also be useful.

Rate Hikes:

  1. None

Rate Cuts:

  1. UFB Direct Savings - 0.95% [was 1.05%]
  2. SFGI Direct Savings - 0.91% [was 1.01%]
  3. Capital One Checking - 0.60% [was 0.75%]
  4. airbanking Savings - 0.50% [was 0.95%]

Certificate of Deposit Rates

My recap of CD rate changes and the list of CD deals will now be in my survey of the best CD rates. This recap will now focus on banking news of the week and liquid accounts.

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

Banking News/Resources Savings/Checking Accounts - Nationwide
  • No new posts this week
CD Deals/Resources - National Checking/Savings/CC Bonuses Reward Checking Accounts
  • No new posts this week
CD and Money Market Deals - Local Posts from Previous Weeks The rates listed below are based on Annual Percentage Yield (APY). No minimum balances are required unless noted. MMA next to the rates indicate a money market account. Most MMAs have check writing and ATM cards. Online savings accounts usually lack both of these. Previous weekly summaries are available at this page.

Rates as of February 11, 2012

Checking/Savings/Money Market Accounts:

  • Noteworthy Accounts Available Nationwide:

Reward Checking Accounts:

  • Noteworthy Accounts Available Nationwide:

Certificates of Deposit:

Various Deposit Account Deals

Bank Account Alternatives

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