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 Week Ending November 10, 2012


Best Bank Account Interest Rates - Summary for Week Ending November 10, 2012

For many savers the concern with the re-election of President Obama is that we will get more of the same in terms of a weak economy and a Fed that's fighting the weak economy with what seems like an endless zero interest rate policy. The economy won't be helped if the President and Congress can't quickly reach a compromise to prevent the January fiscal cliff. As for the Fed policy, it's unlikely that we'll see any changes. Fed Chairman Bernanke is expected to serve out his term, and if he chooses not to serve a third term in January 2014, President Obama is likely to choose a new chairman who is an inflation dove such as Janet Yellen. The only way we are going to see higher interest rates in the next 5 years is if there is sustained economic growth and lower unemployment.

The worries about the upcoming fiscal cliff was a major factor this week that drove down Treasury yields. The 10-year and 30-year Treasury yields had the largest declines. The summary of Treasury yield changes over the last week and the expectation of future Fed funds rates are shown below. Numbers are based on Yahoo bond rate data and the CME Group FedWatch.

Treasury Yields:

  • 6-month: 0.12% same as last week
  • 2--year: 0.25% down from 0.28% last week
  • 5--year: 0.64% down from 0.72% last week
  • 10-year: 1.61% down from 1.71% last week
  • 30-year: 2.73% down from 2.90% last week

Fed funds futures' probability of rate hike by:

  • Sep 2014: 27% down from 36% last week
  • Jan 2015: 40% down from 57% last week

No banks failed on Friday. The total number of bank failures for the year remains at 49. At this time last year there had been 87 bank failures for the year.

Savings & Checking Account Rates

This was a quiet week for rate changes. Only one bank had a rate change, and that was Salem Five Direct. It might seem like very good news with Salem Five Direct raising its eOne Savings Account yield from 1.00% to 1.25% APY for balances up to $500K. However, this applies only to new customers. If you already have this eOne savings account, you'll need to call to find out your current rate. When I contacted a Salem Five Direct CSR, I was told that "rates vary as to when an account was opened and which promotion a customer received." In my opinion, this lack of transparency is not a good sign, and it doesn't give me confidence that Salem Five Direct will remain a rate leader over the long run.

Salem Five Direct now is even with EverBank with a 1.25% APY. Unlike Salem Five Direct, EverBank is transparent with its rates. The 1.25% rate only applies to new customers, and it will last 6 months from account opening. The intro rate only applies to balances up to $100K for the checking and $50K for the money market account. After the intro period ends, the rate will fall to the standard rate. The money market standard rate is currently 0.76%. This is also the standard rate for the top tier of the checking account.

The top non-promo rate that's available to new customers continues to be the Y.E.S Money Market Account at Connexus Credit Union. This is a tiered-rate account that has a top yield of 1.15% APY for balances of at least $100K. It also requires an active checking account (which can be the reward checking account).

The best non-promo yield that's currently available at an internet bank is 1.05% APY. Five internet banks are currently offering this yield on their money market and savings accounts. One of those internet banks is Incredible Bank, and it just recently had its 3-year anniversary. As I mentioned in this week's post, Incredible Bank has been a rate leader since it was launched in 2009.

Three years of being a rate leader is a good sign, but as we have seen with many other internet banks, it doesn't guarantee we'll continue to see top rates. The latest example of an internet bank that became a dud is CNB Bank Direct. I removed it from my list when its savings account rate dropped to 0.51%. This month the rate fell again, and it's now 0.41%. CNB Bank Direct is an internet division of an Ohio community bank. It was launched with top rates in 2008, and the rates have stayed competitive until the last 3 months. Since August the rate has been falling like a rock.

Reward Checking Accounts

There weren't any rate cuts for the few nationally available reward checking accounts in my list below. However, there continues to be rate cuts for several other reward checking accounts that are only locally available. Thanks to DA member pearlbrown who has been reporting on these in the DA reward checking forum. The last two have been especially disappointing with the rates falling from around 2.25% to 1.25%. One even has a small $10K balance cap. I have always thought smaller balance caps should allow banks to offer higher rates, but I've seen many banks with $10K balance caps keep cutting their rates. The latest example of this in the list below is the reward checking account at First Tech Federal Credit Union. It has a $10K balance cap, and its yield fell from 2.57% to 1.78% on November 1st.

To find the highest reward checking rates and balance caps in your state or nationwide, please refer to our reward checking rate table. If you're new to these tables, my rate table guide should be useful. If you're new to reward checking, please refer to my blog post, 10 Common Traits of High-Yield Reward Checking.

Rate Hikes:

  1. Salem Five Direct savings intro yield - 1.25% [was 1.00%]

Rate/Balance Cap Cuts:

  1. None

Certificate of Deposit Rates

My recap of CD rate changes and the list of CD deals will now be in my survey of the best CD rates. This recap will now focus on banking news of the week and liquid accounts.

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

Banking News/Resources Savings/MMA - National CD Deals/Resources - National Checking/Savings/CC Bonuses Reward Checking Accounts
  • No new posts this week
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.

Rates as of November 10, 2012

Checking/Savings/Money Market Accounts:

  • Noteworthy Accounts Available Nationwide:

Reward Checking Accounts:

  • Noteworthy Accounts Available Nationwide:

Certificates of Deposit:

Various Deposit Account Deals

Bank Account Alternatives - NOT FDIC Insured

Historical Rates from the Federal Reserve (Federal funds, Treasury bills, CD's)
lou   |     |   Comment #1
"The only way we are going to see higher interest rates in the next 5 years is if there is sustained economic growth and lower unemployment."

Although I agree with Ken that it is highly unlikely rates will go up if we don't have lower unemployment, one should not discount the possibility of high inflation and/or bond vigilantes forcing rates to go higher. Greece, Spain and some other countries have very high unemployment rates and little or no growth while also having very high interest rates.
Anonymous   |     |   Comment #2
I no longer believe real inflation has much of an effect on higher interest rates as does the Federal Reserve's monetary policy.  Here in the U.S., we all are witness to the Fed's manipulation of how inflation rates are figured and adjusted to suit their own agenda.
Kaight   |     |   Comment #3
Having taken too much risk and gone "long" with some CD funds prior to the election, I was relieved Tuesday evening with President Obama's victory.  I think we can rely on the President for low or no real growth for the next four years.  I expect rates to remain low.  Heck, just the new regulations alone his administration is in process of bringing on line should do the trick and suppress economic activity.

Despite my personal benefit, I didn't vote for the President.  I thought Romney would restore the USA to economic health, so I voted for the country over myself.  However, only a fool looks a gift horse in the mouth.  I feel sorry for younger people, though, and for the less fortunate.  Their prospects are quite poor at this point.  And their inability to recognize that is not my fault.