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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Best Bank Account Interest Rates - Summary for April 23, 2011


Best Bank Account Interest Rates - Summary for April 23, 2011

I hope everyone is having a pleasant Easter weekend. Many banks released their first quarter earnings this week. One thing in common reported by both the mega banks and the regional banks has been an increase in deposits. Also, many banks have been reporting weak loan demand. I'm afraid that won't help savers. With plenty of deposits and weak loan demand, banks won't have much incentive to raise deposit rates.

The Fed's monetary policy isn't helping savers either, and we'll hear the latest news from the Fed next Wednesday after their third FOMC meeting of the year. Before the Fed starts to hike rates, they will take several other steps that will slowly reverse this super-easy monetary policy. The Fed's statement after the meeting may give hints about the timeline of those steps. We may also hear some clues when Bernanke gives the Fed's first news conference after the meeting.

The market's expectation for rate hikes in December and early next year went down a little this week. Details can be seen in the following summary which is based on bond rate data and the CME Group FedWatch.

Fed funds futures' implied probability for a higher rate by:

  • Dec 2011: 31.3% down from 33.0% last week
  • Jan 2012: 48.3% down from 54.1% last week
  • Mar 2012: 60.0% down from 67.1% last week

Treasury Yields:

  • 5--year: 2.14% no change from last week
  • 10-year: 3.42% down from 3.43% last week
  • 30-year: 4.47% no change from last week

Savings Account Rates

This was a slow week on savings account rate changes. One bank that cut its internet savings account rates was Emigrant. Rates fell by 10 basis points at both DollarSavingsDirect and EmigrantDirect. I had stopped listing DollarSavingsDirect on my weekly list a few months ago when its yield dropped to 1.00%. It's hard to believe that just over two years ago it was paying 4.00%.

Rate cuts that were announced in February took effect this week at AmericaNet Bank, Evantage Bank and Redneck Bank. The yield of their Mega Money Market Accounts fell from 1.75% to 1.50% APY for balances up to $35K. Amounts over $35K continue to earn 1.00% APY. These accounts continue to be closed to new customers.

There are currently two banks that are offering around 1.50% APY on all balances. The Morrill and Janes Bank continues to offer 1.51% APY on all balances over $1,500 on its checking account. It has now been over six months since my first report of this bank. The other bank is Tennessee Commerce Bank which is offering a tiered-rate savings account with yields that range from 1.50% to 1.60%. Although this bank just started to offer this promotion, they do have a good history of maintaining competitive rates for past promotions.

Even though the above two banks have pretty good rate histories, there's no guarantee that their rates will remain on top. If you want a guarantee that a rate won't drop, the best deal is currently at Salem Five Direct which is offering 1.25% APY with the rate guaranteed until April 1, 2012.

Rate Hikes:

  1. None

Rate Cuts:

  1. AmericaNet/Evantage/Redneck Banks Mega MMA - 1.50% up to $35K (was 1.75%)
  2. Dollar Savings Direct - 0.90% (was 1.00%)
  3. Emigrant Direct - 0.80% (was 0.90%)

Certificate of Deposit Rates

CD rates were fairly steady this week. The few rate cuts that did occur were mostly on the shorter terms for maturities under 2 years.

As I described on April 15th, the best deal for a time frame of around one year is the Treasury's I Bond. Those high gas prices did have an effect on CPI-U, and this will result in six months of a very good I Bond rate (at least 4.60%). In my new I Bond review I described the potential returns you can get for terms of 11 to 15 months. However, there's one big downside. The Treasury limits I Bond purchases to a maximum of $10K per calendar year per social security number.

Another good non-CD deal that's better than most short-term CDs is what I described in the savings account section. It's Salem Five Direct's savings account promo which guarantees 1.25% APY until April 1, 2012. This easily beats the vast majority of CDs with terms under 1-year.

Best Local CD Rates

If you want at least a 2.00% yield, you will need a CD term of at least 3 years. You can find some shorter terms with yields over 2.00%, but they're local deals. I reviewed some of these in my Survey of the Best Local CD Rates. I also described a few local 5-year CDs with yields of at least 3.00%.

Reward Checking Accounts

I reported on a new nationwide reward checking account this week with a yield of 3.01% APY for balances up to $25K. It's at First National Bank in Ohio, and they are currently allowing people in any state to open accounts online. This bank joins Danversbank as the only two banks offering nationally available reward checking accounts paying at least 3% APY on balances up to $25K. Even though Danversbank has a long history of being a reward checking rate leader, the future of its reward checking has some uncertainty due to Danversbank's acquisition by People's United.

Higher rates for balances up to $25K are still possible, but you'll need to look for banks and credit unions in your state. Texas happens to be one of the better states with many banks and credit unions offering over 3.00% APY. In this Tuesday post I reviewed two that are available to all Texas residents and two that are available to Houston residents. In that post a reader noted Union Square Credit Union and its reward checking account which tops Texas reward checking accounts with a yield of 4.51% APY on balances up to $25K. As I described in my review, unfortunately, not many can qualify for this account since the credit union is primarily limited to Wichita County residents.

To find reward checking accounts available nationwide or to find those that are only available in your state, please refer to the reward checking section of DepositAccounts.com.

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

Banking News/Resources

Savings/Checking Accounts - Nationwide

CD Deals - National

Checking/Savings Bonuses

Reward Checking Accounts

CD and Money Market Deals - Local

Posts from Previous Weeks

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. Previous weekly summaries are available at this page. Quick Links: Refer to the following links for the savings accounts and CDs that interest you: Liquid Account Rates: Savings Accounts, Reward Checking, 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.

Rates as of April 23, 2011

Checking/Savings/Money Market Accounts:

  • Noteworthy Accounts Available Nationwide:

3-Month Certificates of Deposit:

  • Noteworthy Accounts Available Nationwide:

6-Month Certificates of Deposit:

  • Noteworthy Accounts Available Nationwide:

9-Month Certificates of Deposit:

12-Month Certificates of Deposit:

  • Noteworthy Accounts Available Nationwide:

18-Month Certificates of Deposit:

  • Noteworthy Accounts Available Nationwide:

24-Month Certificates of Deposit:

  • Noteworthy Accounts Available Nationwide:

36-Month Certificate of Deposit:

  • Noteworthy Accounts Available Nationwide:

48-Month Certificate of Deposit:

  • Noteworthy Accounts Available Nationwide:

60-Month Certificate of Deposit:

  • Noteworthy Accounts Available Nationwide:

84-Month Certificate of Deposit:

Various Deposit Account Deals

Bank Account Alternatives

Historical Rates from the Federal Reserve (Federal funds, Treasury bills, CD's)