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Bank Deals Weekly Summary for April 26, 2008


Quick Link for Rates, Recap of this week's posts

The Fed is meeting again next week, and the general consensus is that they'll cut the Fed funds rate by 25 basis points. There continues to be a trend of increasing long term CD rates, and with inflation on the rise, some may wonder if next week will be the last Fed rate cut. I'm not so sure. According to this article:
Merrill Lynch expects the U.S. Federal Reserve will eventually cut interest rates to 1%, although the pace of cuts will slow. The economic rebound will be "disappointingly modest" in 2009 and yields on 10-year bonds will dip below 3%, David Rosenberg, Merrill’s North American economist told clients in a note.

It seems possible that we could see a repeat of the 2002-2004 interest rate environment.

So you may want to consider some long term CDs in your cash portfolio. If rates do shoot up, you always have the option to do an early closure of the CD. If you choose a long-term CD without a large early withdrawal penalty, you won't lose too much. On the other hand, if you choose to stick with all short term CDs, and the Merrill's economist is correct, you may not have many decent cash options available when those short term CDs mature.

CD Rates Recap

Several banks raised their long term CD rates this week. These banks included Discover, GMAC, E-LOAN, AmTrustDirect, Element Financial and UFB Direct. In addition, there were some decent long term CD specials at several large banks. Wachovia came out with a 4.75% APY 60-month CD, US Bank has a 4.50% APY 59-month CD, and M&I Bank has a 4.50% APY 60-month CD. For those with very large savings, you can even get over 5% APY for a 60-month CD from Huntington (see the recap section below).

For shorter term CD deals, National City continues to offer a special 5% APY 48-month CD and a 4.25% APY 24-month CD. These require a checking account, without a checking the yields are 4.75% and 4.00% (see post).

Alliant Credit Union continues to offer a 4.40% APY CD with terms from 12 to 17 months ($25K minimum). Xceed Financial Credit Union continues to offer a 5% APY 5-month CD ($25K maximum).

Savings Account Rates Recap

It looks like this may be the last week with Alliant Credit Union's 4.35% savings account at the top of the list. Readers have reported being told that Alliant's board has decided to lower the savings account rate to 4% APY starting in May. Even with a 4% APY, it'll still be near the top, and it'll remain as one of the best savings account deals (see post).

I added Amegy Bank's savings account to my list this week. The savings account has a yield of 3.65% APY for balances over $1,000 (3.35% APY for balances between $1K and $10K). I first reported on it in October 2007 when the yield was 5.20% APY so it does have some history. However, it still lacks some important internet features like ACH transfers (see post).

One big disappointment this week was at Zions Bank which made a large rate cut on its Deseret Money Market Account. The yield for balances under $50K fell from 3.05% APY to 2.53% APY.

Reward Checking Recap

I added 5 more reward checking accounts (see recap below). Unfortunately, none of these new ones are available nationwide. Only one out of the 5 has a 6% yield, however, the other 4 out of 5 still have yields of 5% or higher. So even though this rate environment is having an effect on these reward checking accounts, it hasn't been nearly as bad as its effect to online savings accounts. I still have 7 in my nationwide list with yields around 6%.

For a list of all reward checking accounts (including ones available nationwide), please see my new High Yield Checking website.

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

Savings and Money Market Accounts - National

CD Deals - National

Checking/Savings Account Bonuses

Reward Checking Accounts

CD and Money Market Deals - Local

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. The top lists include banks and credit unions with broad availability and with minimums around $10K or less. Previous weekly summaries are available for Apr 19th, Apr 12th, Apr 5th, Mar 29th, Mar 22nd, Mar 15th, Mar 8th, Mar 1st and Feb 23rd.

Quick Links: Refer to the following links for the savings accounts and CDs that interest you: Liquid Account Rates: Savings Accounts, Reward Checking, Local checking/savings, Bank alternatives CD Rates: 3 Mo CDs, 6 Mo CDs, 9 Mo CDs, 12 Mo CDs, 18 Mo CDs, 24 Mo CDs, 36 Mo CDs, 48 Mo CDs, 60 Mo CDs, 84 Mo CDs, CDs by state Comments: read and discuss

As of April 26, 2008

Checking/Savings/Money Market Accounts:

3-Month Certificates of Deposit:

6-Month Certificates of Deposit:

9-Month Certificates of Deposit:

12-Month Certificates of Deposit:

18-Month Certificates of Deposit:

24-Month Certificates of Deposit:

36-Month Certificate of Deposit:

48-Month Certificate of Deposit:

60-Month Certificate of Deposit:

84-Month Certificate of Deposit:

High Yield Reward Checking Accounts - Open to All

Checking and Saving Accounts at Local Banks/Credit Unions

CD Specials at Local Credit Unions/Banks Over the Last Month

  • Alabama deals and CD rates
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  • District of Columbia deals and CD rates
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  • Washington State deals and CD rates
  • West Virginia deals and CD rates
  • Wisconsin deals and CD rates
  • Wyoming deals and CD rates

Terms of 60 Months and Over

Terms of 24 Months to Under 60 Months

Terms of 12 Months to Under 24 Months

Terms of Under 12 Months

Bank Account Alternatives

Historical Rates from the Federal Reserve (Federal funds, Treasury bills, CD's)
Sofa King Frustrated
Sofa King Frustrated   |     |   Comment #1
It is believed that the inflation rate is 4% per year.

So, with the upcoming Fed Funds cut, and the cuts that many believe (not just Merrell Lynch) will follow, there will soon no longer be any 4% savings accounts left.

Can you just imagine if the Fed Funds rate did drop down to 1%?

Anonymous   |     |   Comment #2
I beleive it would be financial suicide for the Fed to lower interests rates all the way to 1.00%.

Wasn't it the extremely low rates that got this country into a financial crisis to begin with?

With inflation on the rise, many beleive the Fed Funds rate is too low right now.

As for Merrill Lynch's economists, take it with a grain of salt. Why did so many people lose millions over the last couple of years in their retirement portfolios that were managed by Merrill Lynch?
Chester   |     |   Comment #3
Does anyone know if Vintage Bank of Texas requires an in-branch visit to open up their Rewards Checking account:


Currently 4.25% APY with no balance cap.

Also, does one need to be a Texas resident?

Thank you