About Ken Tumin

Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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How Savings Account & Reward Checking Rates Changed in 2010


As 2010 comes to a close I thought it would be interesting to look back at how rates have changed this year on popular savings accounts and reward checking accounts. As we all know, this was another year of across-the-board rate cuts on deposit accounts. The intent of the post isn't to remind everyone of this, but just to compare rate cuts and other changes that have occurred in the different accounts.

I looked at 10 accounts from banks and credit unions: 5 savings accounts and 5 reward checking accounts. One of the 5 savings accounts is Incredible Bank's checking account. I grouped it with the savings accounts since customers can use it just like a savings account. I picked what I thought were popular savings accounts that maintained top rates during the year.

For the reward checking accounts, I picked the accounts that made my February list of top reward checking accounts with at least 2 years of history.

One thing that makes reward checking comparisons difficult is that rates are not the only thing that change. In addition to rate cuts, many banks have reduced balance caps (the balance that qualifies for the top rate). I noted these types of changes in the table.

I wish I could say the worst is over in terms of rate cuts, but there are many unknowns for next year. The Fed's ultra low interest rate policy will likely continue for much of next year. Also, the Fed's new debit card interchange rules may have significant effects on reward checking accounts.

Sample of Savings & Reward Checking Rate Changes in 2010


Savings/Chk Accounts APYs on Jan 1, 2010 APYs on Dec 29, 2010 Percent Drop
Incredible Bank Checking 2.02% 1.35% 33.2%
Alliant CU Savings 2.00% 1.35% (1) 32.5% (1)
CNB Bank Direct Savings 1.70% 1.20% 29.4%
CapOne InterestPlus Savings 1.60% 1.25% 21.9%
Ally Bank Savings 1.50% 1.09% 27.3%
Reward Checking  
Consumers CU 4.09% up to $25K 3.09% up to $10K 24.4% (2)
First New England FCU 4.10% up to $15K 3.51% up to $15K (3) 14.4% (3)
Danversbank 4.01% up to $25K 3.01% up to $25K 24.9%
Capital Bank 4.01% up to $25K 4.01% up to $10K (4) 0% (4)
Southern Community Bank & Trust 4.00% up to $25K 3.00% up to $25K 25.0%
Note 1 - Alliant CU: Rate is scheduled to fall to 1.15% APY effective 1/1/2011.
Note 2 - Consumers CU: Balance cap reduction not factored into change.
Note 3 - First New England FCU: Top rate now requires relationship status.
Note 4 - Capital Bank: Balance cap reduction not factored into change. Account went from nationally available to available only to NC residents.
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51hh   |     |   Comment #2
The table is good as samples of interest rate drops and trends, but it certainly cannot serve as a base for any apples-to-apples comparisons. 
darkdreamer4u   |     |   Comment #3
Hard times last year, more hard times upon us next year, me thinks.
glxpass   |     |   Comment #4
Very interesting table, but I'd add a third column for RCA rate drops effective January 1, 2011, such as Randolph Bank and Trust going from 4.75% APY to 2.5% APY, with a footnote about its new debit card requirement also effective on 1/1/2011: at least 6 debit card transactions of at least $20 each.  To steal another plummeting bank's name:  That's incredible!  :)
SaveYurMoney   |     |   Comment #5
This stinks.  If you don't have a lot of money in savings you are pretty much letting the bank have your money for free. 
Bozo   |     |   Comment #6
Surprisingly enough, having one's "bond" component in a CD will no doubt beat a bond fund going forward. Assuming a balanced fund of 60% stocks and 40% bonds, with a moderate duration (say 5 years) in the bond allocation, even a modest increase in bond yields over the next year will drag on the price per share of the balanced fund. Those scratching for yield would do better by cashing in their balanced fund, investing 60% in a low-cost index fund of total market (VTI comes to mind) and plunking the 40% otherwise allocated to bonds in a PenFed 7 year CD, yielding 3.25%. By the time the PenFed CD matures, you'll be able to plunk it back into a bond fund. But you won't. Retail CDs  tend to be so much better than bond funds. Bond funds are only good when rates are tending lower.

TiredOfMakingBankstersRich   |     |   Comment #7
Thanks to Ben Bernanke for the terribly low rates by way of ZIRP.  As a result, the banksters make record bonuses, while the savers get ****ed.

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