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Rainbow (Installment) Savings Account Rate Update

Monday, January 3, 2011 - 9:26 PMWilshire Bank - Details
I was in the Garden Grove branch today, and these were the Rainbow Savings Account rates.

$ 100K maximum per customer. In my experience, they enforced a similar restriction on other types of accounts (Flex CD, $ 95K max).  Rates without auto-transer from a Wilshire account are ~ 0.25% lower.  These rates are from 0.50% (12 month) to 0.65% (36 month) higher than the corresponding rates at Hanmi Bank.

With auto-transfer from a Wilshire account, the rate/APY is:

12 Month - 2.00%/2.02%

18 Month - 2.00%/2.02%

24 Month - 2.25%/2.28%

30 Month - 2.25%/2.28%

36 Month - 2.75%/2.79%
CTMCTM41 posts since
May 6, 2010
Rep Points: 138
1. Sunday, March 27, 2011 - 2:51 AM
Don't these rates have to be averaged with those of the funding account to get the 'actual' interest rate?

E.g., if the Rainbow account is funded from a Wilshire eLink account (paying 0.85% APY), the effective interest rate earned on the 12- or 18-month Rainbow contracts would be approximately 1.44% rather than the stated 2.02% rate.
SteveRaySteveRay1 posts since
Mar 27, 2011
Rep Points: 1
2. Sunday, March 27, 2011 - 2:25 PM
If you are making a comparison to a conventional CD of the same duration, you are approximately correct.

Ken created an example spreadsheet to calculate the effective interest rate, at the link below:

If you look at the installment savings account as a series of discrete investments, each earns the stated rate for the fraction of the term it is on deposit.
CTMCTM41 posts since
May 6, 2010
Rep Points: 138