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Are You Ready for a Cashless Society?Savings Account Rate Increases after the Fed Rate Hike
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POSTED ON BY Ken Tumin
As expected the Fed raised the funds rate to 4.50%. It still seems likely that there will be another rate hike at the next Fed meeting on March 28. After that, there's some of uncertainty.
The two banks that I expected to follow the Fed's rate hike and bump up their savings account rates didn't let me down. HSBC raised its Online Savings account rate from 4.25% to 4.80% APY yesterday. It's still only shown on the rates page and not any other pages. I would have thought HSBC would have been able to update all of its pages within a full day. Even though not all of the HSBC's website is showing 4.80%, this new rate has been confirmed by HSBC's customer service representatives and is guaranteed till 4/30/06. I would still like to see the details of this new rate on HSBC's website to make sure that it will apply to all deposits and not just new money as in the case of ING Direct's Winter Save Up Sale.
The other bank that I expected would increase its rates was Presidential Bank, and sure enough, Presidential finally did it this afternoon. This is the first rate increase at Presidential since last September. The Premier Savings increased from 4.12% to 4.37% APY. The Internet Checking Account increased from 4.00% to 4.25% APY.
Another Bank that made a rate increase was UFB Direct. Its Jumbo Money Market Account went from 4.35% to 4.50% APY. This account requires a minimum of $50K to earn interest and to avoid a $10/month fee. The High Yield Money Market Savings account which has no minimums remained at 4.00% APY.
Corus Bank had a rate increase on its Managed Money Market Accounts. However, every Tuesday the rates on these accounts are adjusted based on the 91-Day Treasury Bill Discount Rate. So there's no direct relationship to today's Fed meeting. The Money Market Account yield for deposits under $100K went from 4.38% to 4.47% APY. For deposits over $100K, the yield went from 4.53% to 4.63% APY. It should be noted that there was no change at Corus to its 6 and 12-month CDs. They remain at 4.70% and 4.94% APY.
The two banks that I expected to follow the Fed's rate hike and bump up their savings account rates didn't let me down. HSBC raised its Online Savings account rate from 4.25% to 4.80% APY yesterday. It's still only shown on the rates page and not any other pages. I would have thought HSBC would have been able to update all of its pages within a full day. Even though not all of the HSBC's website is showing 4.80%, this new rate has been confirmed by HSBC's customer service representatives and is guaranteed till 4/30/06. I would still like to see the details of this new rate on HSBC's website to make sure that it will apply to all deposits and not just new money as in the case of ING Direct's Winter Save Up Sale.
The other bank that I expected would increase its rates was Presidential Bank, and sure enough, Presidential finally did it this afternoon. This is the first rate increase at Presidential since last September. The Premier Savings increased from 4.12% to 4.37% APY. The Internet Checking Account increased from 4.00% to 4.25% APY.
Another Bank that made a rate increase was UFB Direct. Its Jumbo Money Market Account went from 4.35% to 4.50% APY. This account requires a minimum of $50K to earn interest and to avoid a $10/month fee. The High Yield Money Market Savings account which has no minimums remained at 4.00% APY.
Corus Bank had a rate increase on its Managed Money Market Accounts. However, every Tuesday the rates on these accounts are adjusted based on the 91-Day Treasury Bill Discount Rate. So there's no direct relationship to today's Fed meeting. The Money Market Account yield for deposits under $100K went from 4.38% to 4.47% APY. For deposits over $100K, the yield went from 4.53% to 4.63% APY. It should be noted that there was no change at Corus to its 6 and 12-month CDs. They remain at 4.70% and 4.94% APY.
