Rates are Falling - ING Direct, E-LOAN... Where to Lock in a High Rate?
POSTED
ON BY Ken Tumin
ING Direct responded quickly to yesterday's rate cut by the Feds. The Orange Savings Account yield dropped from 4.50% to 4.30% APY, the low tier rate of the Electric Orange Checking dropped from 4.00% to 3.50% APY, and all of the Orange CD rates fell below 5% APY. When the Fed was hiking rates from 2004 to 2006, ING Direct was never this fast to respond.
Emigrant Direct's savings account rate is holding at 5.05% APY, but their My Way CD rates have fallen from 5.10% to 4.55% APY. Like ED, E-LOAN's savings account rate hasn't changed (still at 5.25% APY), but their CD rates have fallen. The 3-month CD yield fell from 5.55% to 5.35% APY. The 5-year yield fell from 5.55% to 5.30% APY. The yields on CD terms from 2 to 4 years fell from 5.41% to 5.20% APY.
There are still some opportunities to lock in a high rate. Even though Indymac's 5.75% APY 4-month internet CD special is now only listed at 5.00% APY, Indymac is still listing 5.70% APY on its Internet Custom Term CDs with terms of 5 and 6 months (see my latest Indymac CD post). Countrywide Bank still has its national offer of 5.65% APY for a 12-month CD and 5.75% APY for those in California (see my latest Countrywide CD post). Please see my latest weekly summary for more CD options, and please make sure to check the bank's website for the latest rates since rates are changing fast.
Emigrant Direct's savings account rate is holding at 5.05% APY, but their My Way CD rates have fallen from 5.10% to 4.55% APY. Like ED, E-LOAN's savings account rate hasn't changed (still at 5.25% APY), but their CD rates have fallen. The 3-month CD yield fell from 5.55% to 5.35% APY. The 5-year yield fell from 5.55% to 5.30% APY. The yields on CD terms from 2 to 4 years fell from 5.41% to 5.20% APY.
There are still some opportunities to lock in a high rate. Even though Indymac's 5.75% APY 4-month internet CD special is now only listed at 5.00% APY, Indymac is still listing 5.70% APY on its Internet Custom Term CDs with terms of 5 and 6 months (see my latest Indymac CD post). Countrywide Bank still has its national offer of 5.65% APY for a 12-month CD and 5.75% APY for those in California (see my latest Countrywide CD post). Please see my latest weekly summary for more CD options, and please make sure to check the bank's website for the latest rates since rates are changing fast.
I am starting to think a US savings account may be the wrong place to keep my money. Where can I open a british or japanese account to get out of dollars and that will convert my dollars cheaply?
I am not making a recomendation but if you are looking for rates outside of usa try Ever Bank in usa, of course no outside of usa banks are insured by fdic...also if you have never used them they do offer 2 USA 6% accounts (savings and checking) that they will pay for 3 months and then drops to the 5% range.
Metroplexual,
>>Where can I open a british or japanese account to get out of dollars and that will convert my dollars cheaply?
It is not necessary to have a Brit or Japanese account to buy Pounds or Yens.
Trading of Pounds / Yens can be done using a regular brokerage account in US and trading CurrencyShares. Check FXB an FXY for Pounds and Yens respectively.
Personally I prefer trading FMX (Mexican Peso).
- SVG
At what point is ease of use erased by a less-than-competitive rate?
As for FNBO, I wouldn't count on them factoring a need for amends into their new rate. My bet would be no more than 5%.
About foreign currency accounts, you might want to consider EverBank's accounts. Please see my EverBank post for more info.
It's a great rate, along with 4% checking account.
http://www.flushingsavings.com/site/fsb-specials.html
Most banks (except ING I guess) don't want to be the first (having people jump ship) so they will eat a loss for a very short period of time. That being said I would think most at ING are not that rate sensitive since they have been below market for awhile, so what's another 20 basis points.
And yes banks have less of a lag (if at all) for rate drops, but a large lag for increases. All about the bottom line.