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Rates Slashed at AARP Financial Savings Center


AARP Financial Savings Center cut the rates today on both its High Yield Savings account and its Jumbo Secure Money Market account. The new yield is 4.05% APY for both. The Jumbo MMA yield had been 4.75% APY, and the savings account yield had been 4.50% APY. A reader informed me of his conversation with a CSR who said that the new rate will only apply to accounts opened from today. Those who had accounts opened prior to today are still getting the old yields. They will be grandfathered in for now, but there's no guarantee how long this will last.

I was afraid the rates would be cut, but I was hoping it wouldn't be this big and this soon. I'm afraid we'll probably see more cuts since other accounts managed by Waterfield and Affinity are only between 2.70% and 3.75% (see post).

With the current rate, it's now not much higher than what Alliant Credit Union offers. Since you don't have to worry about the issues of having a middle-man between you and the bank, Alliant's savings account with a 4% APY is looking more attractive (see my Alliant review).

For more details about AARP Financial Savings Center and the the savings and money market accounts, please refer to the following past posts:

Thanks to all the readers for noting this change.
Related Pages: money market accounts, savings account

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  |     |   Comment #1
Thanks for the posting, Bank Guy!

I agree that with the attention your blog has been getting concerning AARP, and with the sudden and huge rate drop, this news deserved a special posting on your blog.

I also agree with you that as of now, Alliant is the better way to go over AARP Savings.
  |     |   Comment #2
well, party is over ...
Bill Millville
  |     |   Comment #3
Not much of a party!

I'd love to know the total figures AARP Savings raised before the lowered the rate. Has to be into the tens of millions?

For me personally, I am one of the very lucky ones to have the problem of needing more than one good high-interest paying bank. I already have $300K in Alliant and did not want to go over that amount, as I have 4 qualifying beneficiaries to use, which gives me $400,000 total insurance.

So, I jumped on AARP Savings. Since both rates are equal now, I will keep my account open at AARP. But should AARP decide to lower their rate even further, I will transfer my money out to another bank, because AARP would not deserve my money, and I don't really like the fact that there is a middle-man involved.
  |     |   Comment #4
Bill, I'm in the same situation as you.

My AARP account still shows the 4.75% yield. I added POD Benificiares for extra FDIC insurance but I'm still short coverage.

As long as they keep the yield as it is right now I'll stay with AARP. As soon as my yield goes down to 4.05% I'll be moving a portion to Alliant CU so that I get complete FDIC insurance. I'm in the process now of opening a checking account with Alliant CU to help me move money out quickly when I need funds.
Bill Millville
  |     |   Comment #5
Smart move, anonymous.

The CSR rep at AARP Savings told me on the phone today that she has received a huge amount of calls from customers who are still getting the 4.75% APY wondering when our rate will drop as well.

The rep all but guaranteed me the rate will indeed drop for the existing customers, she just didn't know how soon.

Alliant CU is really great. I love them and their service. I have both the savings with them and their free checking. You can do unlimited transfers per month from your savings to checking if you do it at a participating ATM. (It is just 6 transactions per month if you pull money out of your savings either online or via phone).

NCUA coverage for Alliant is just like FDIC, except you don't need to put POD or ITF in the account title like you must do with FDIC.

Of course, the big question is if Alliant CU will lower their current 3.93% on their savings account.
O-Qua Tangin Wann
  |     |   Comment #6
Hello all blog readers:

Please note that AARP Savings will only be maintaining the higher rates for existing customers for 30 days.

I promised not to reveal who divulged this information to me, so please do not ask, but I have full confidence in the information's accuracy.

Obviously, decisions can be changed at any time, but the decision as of today is that AARP will be lowering the rates for existing account holders in 30 days.

I imagine if there were this huge outcry by existing customers, or if new account openings dropped by a staggering number, perhaps AARP Savings might delay this drop for fear of a mass exodus of funds.

But again, as of today, their decision is to drop the rate in 30 days.

~O-Qua Tangin Wann
  |     |   Comment #7
Did anyone get more than 1 code credited per social security #? per household? (either the earlier $20 bonus or the Code AA017 for the $25 bonus )
O-Qua Tangin Wann
  |     |   Comment #8
The ****s over at AARP Savings won't let you change the pin number on your ATM card!

I received my Jumbo Money Market Savings ATM card (it is ATM Card only and not Debit Card, at my specific request). It arrived with a pin they generated.

I called today to change my PIN, which virtually every other bank allows, and I was told absolutely that they do not allow one to select their own easy-to-remember PIN.

~O-Qua Tangin Wann
  |     |   Comment #9
"****s" for not allowing a PIN to be changed?? Isn't that a bit strong relative to the dilemma? Every institution has some sort of unique little annoyance(s). E.g., even Alliant, which is wonderful in so many ways (in addition to its 4.00 APY), makes its customers suffer 2-days of lost interest on ACH pushes to other banks-- vs. a loss of only 1 day for pushes from Provident, ETrade, GMAC, AmTrust, etc.
O-Qua Tangin Wann
  |     |   Comment #10
OK, "****s" is a little strong. You are correct.

It is hard not to feel frustration in these tough economic times.

Have you ever heard of bank that issues an ATM card and the forces you to have to only use their PIN number rather than allowing you to pick your own?

~O-Qua Tangin Wann
  |     |   Comment #11
Yes, I was surprised too when they said I couldn't change the PIN. I'd never encountered that strange restriction before. But I still prefer that to a password-secured website (not necessarily a bank) that assigns me a password like H78mQ1aA and then says I can't change it (and I don't like to use the "save password" function on my pc). As for the PIN, since this isn't a debit card you can concoct some sort of secret reminder and write in the signature band. E.g. if the PIN you usually use is 4215 and they assigned you 9847, you could write "+/- 5632." (in this example YOU would know it has to be "+" since "-" would take it below zero.) Or, you could relate it back to some other number that has meaning for you, eg, if you grew up on Smith street your formula could refer back to the street number or last four digits of the phone number, just referring to it as "Smith" on the signature band. Mine says "Stanford last 4. Reverse +3000." Of course, if you use the card much you'll get to know the PIN quickly. And as for how it's easy to get frustrated in these hard economic times...that's for sure!
  |     |   Comment #12
Rate drop on existing account

Looked in on my existing accounts and found new, LOWER rates. So the 30 day time period turned out to be more like a week.
  |     |   Comment #13
AARP lowered their MMF rate again today (08-13-08)!!!

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