The fiscal cliff discussions will likely impact the economy for the next few months unless a surprising compromise comes quickly. If there isn't a compromise, many economists are warning that it could put the economy back into a recession. For savers concerned about future interest rates, anything that weakens the economy will likely result in a longer delay before rates are increased.
There are already talks by some on the Fed that mid 2015 is too early for the FOMC rate guidance. This week the #2 official at the Fed, Vice Chair Janet Yellen, said in a speech that the federal funds rate may need to stay near zero until early 2016.
We might not see mid-2015 date pushed out to early 2016. Instead, the Fed may choose combinations of unemployment rate and inflation thresholds for raising the fed funds rate. Janet Yellen gave support to these thresholds in her speech. Also, the FOMC meeting minutes from October were released this week, and they suggest that the Fed is considering these thresholds. We may first see them in December. So instead of waiting for mid 2015 for higher rates, we may need to wait for the unemployment rate to drop below some level or for inflation to rise above some level. One example that Yellen gave was 7% unemployment and 3% inflation.
The worries about the upcoming fiscal cliff didn't have quite the effect that they did last week. Treasury yields fell, but the declines were smaller. 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.
- 6-month: 0.11% down from 0.12% last week
- 2--year: 0.23% down from 0.25% last week
- 5--year: 0.61% down from 0.64% last week
- 10-year: 1.58% down from 1.61% last week
- 30-year: 2.73% same as last week
Fed funds futures' probability of rate hike by:
- Sep 2014: 26% down from 27% last week
- Jan 2015: 42% up from 40% last week
Just one small Georgia bank failed this Friday. That brings the total number of bank failures for the year to 50. At this time last year there had been 90 bank failures for the year.
Savings & Checking Account Rates
This was a quiet week for rate changes. None of the banks on my list of top nationally available savings and money market accounts changed rates. Salem Five Direct, TIAA Direct and EverBank remained tied for the top spot with a 1.25% yield.
TIAA Direct remains closed for new customers. It has been almost 4 months since TIAA Direct stopped accepting new applications.
The 1.25% is just a promotional yield that's being offered by Salem Five Direct and EverBank. For the case of Salem Five Direct, there's no guarantee about how long this will last for new customers. Another downside is that Salem Five Direct is not publicly disclosing rates that existing customers are earning. If you don't carefully review your statements, it may take several months before you realize your rate has dropped.
EverBank is more 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.
Next week three banks will be raising their money market account yields from 1.00% to 1.10%. AmericaNet, Evantage and Redneck Bank are scheduled to make this rate hike on November 22nd. However, this yield only applies to balances up to $35,000. The portion of the balance over $35,000 will continue to earn only 0.50%.
Reward Checking Accounts
For the second straight week 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 and balance cap reductions 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.
If you include accounts that are only locally available, we still have two that offer 4% APY on balances up to $25K. Southwest Airlines FCU is still offering its LUV Reward Checking that pays 4.00% APY on balances up to $25K. This isn't really a local deal, but the credit union's field of membership is narrow. It's primarily limited to Southwest Airline employees and employees of some other companies. The other institution is Coppermark Bank with branches in Oklahoma and Texas. Its reward checking account is also still paying 4.00% APY on balances up to $25K.
If you can't get a good local deal like the ones above, you may have to settle for reward checking accounts that are available nationwide. The two best deals offer around 2% for balances of up to $25K. These are ABCO Federal Credit Union with a 2.12% APY and Provident Credit Union with a 2.01% APY. Both of these are all-access credit unions that make it easy to qualify for membership via an easy-to-join association.
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/Balance Cap Cuts:
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 PostsBanking News/Resources
- Hometown Community Bank in Georgia is 50th Bank to Fail This Year
- Fed's Yellen Suggests Zero Interest Rates Into 2016
- Understanding Deposit Insurance Coverage with Multiple Beneficiaries
- Where to Find Help To Pay for Medical Home Improvements
- Survey of the Best CD Rates for November 16, 2012
- Competitive 1-Year CD Rate at the New Internet Bank ableBanking
- Special 1-Year CD Rate at Chartway Federal Credit Union - Easy Membership
- Checking Account Bonus of Up to $100 at Amalgamated Bank
- Checking Account $100 Bonus at First Community Credit Union in Houston - Local Only
- ING DIRECT's 2012 Black Friday Sale Preview
- Top CD Rates at Consumers Credit Union in Michigan - Local Only
- Money Market Special With Rate Guarantee at CrossFirst Bank in KC Metro - Local Only
- Top 30-Month CD Rate Continues at Navy Army Community Credit Union in Texas - Local Only
- 6-Month CD Rate Special at Cambridge Savings Bank - MA Only
Checking/Savings/Money Market Accounts:
- Best Savings Account Rates (Nationwide & by State)
- Best Money Market Rates (Nationwide & by State)
- Best Checking Account Rates (Nationwide & by State)
- Noteworthy Accounts Available Nationwide:
- TIAA Direct - 1.25% MMA/Savings (not accepting new customers) account review
- EverBank - 1.25% MMA/Checking (6mo intro rate) 0.76% ongoing rate, account review
- Salem Five Direct - 1.25% savings, for new customers only (~0.75% for existing customers)
- Connexus Credit Union - 1.15% ($100K) 1.00% ($50K) 0.75% ($20K) active chk required
- Incredible Bank - 1.05% MMA ($2.5K min) account review
- CIT Bank - 1.05% ($25K) 0.90% ($0) Savings, account review
- MyBankingDirect - 1.05% (min $5K)
- Union Federal Savings Bank - 1.05% MMA (min $2.5K) account review
- Sallie Mae Bank - 1.05% MMA account review
- SmartyPig - 1.00% ($50K max), account review
- Barclays - 1.00% Savings account review
- Acacia Federal - 1.00% Metro Checking, account review
- Acacia Federal - 1.00% MMA (min $25K), account review
- Evantage Bank - 1.00% MMA (up to $35K) 0.50% (over $35K) [rises to 1.10% Nov 22]
- AmericaNet Bank - 1.00% MMA (up to $35K) 0.50% (over $35K) [rises to 1.10% Nov 22]
- Redneck Bank - 1.00% MMA (up to $35K) 0.50% (over $35K) [rises to 1.10% Nov 22]
- ableBanking - 0.96% MMA (min $1K)
- Ally Bank - 0.95% MMA/savings
- UFB Direct (BofI Federal) - 0.95% MMA account review
- AloStar Bank of Commerce - 0.91% ($50K) 0.50% ($0) MMA
- SFGI Direct - 0.91% account review
- American Express Bank - 0.90%, account review
- Sallie Mae Bank - 0.90% Savings account review
- Incredible Bank - 0.88% Checking ($1K min) account review
- ING Direct - 0.85% ($100K) 0.80% ($50K) Electric Orange Checking
- Colorado Federal Savings Bank - 0.85% ($2.5K min) account review
- Alliant Credit Union - 0.80% (min $100) Savings account review
- Discover Bank - 0.80% Savings (min $500) account review
- UFB Direct (BofI Federal) - 0.80% Savings account review
- Clear Sky Accounts - 0.80% (max $250K) account review
- Nationwide Bank - 0.76% MMA (min $1K)
- ING Direct - 0.75% Orange Savings
- Alliant Credit Union - 0.75% Checking (req's elec. dep & e-stmts) account review
- One United Bank - 0.75% ($100K) 0.70% ($25K) 0.65% ($1K) E-Money Market
Reward Checking Accounts:
- Best Reward Checking Account Rates for a $10,000 Balance - Nationally Available
- Best Reward Checking Account Rates for a $25,000 Balance - Nationally Available
- Noteworthy Accounts Available Nationwide:
- Consumers Credit Union - 3.09% (up to $5K) 0.20% ($5K-$25K) 0.10% ($25K+)
- Lake Michigan Credit Union - 3.00% (up to $15K) 0.00% ($15K+)
- Capital Educators Federal Credit Union - 2.50% (up to $10K) 0.20% ($10K+)
- ABCO Federal Credit Union - 2.12% (up to $25K) 0.30% ($25K+)
- Provident Credit Union - 2.01% (up to $25K) 0.16% ($25K+)
- INOVA Federal Credit Union - 2.00% (up to $20K) 0.15% ($20K+)
- First Tech Federal Credit Union - 1.78% (up to $10K) 0.21% ($10K+)
- Pacific Resource Credit Union - 1.75% (up to $15K) 0.50% ($15K+)
- Community Bank of Pleasant Hill - 1.75% (up to $10K) 0.50% ($10K+)
- Community Bank of Raymore - 1.75% (up to $10K) 0.50% ($10K+)
- Connexus Credit Union - 1.75% (up to $25K) 0.50% ($25K+) Xtraordinary Checking
- Heritage Bank - 1.71% (up to $25K) 0.10% ($25K+)
- First New England Federal Credit Union - 1.52% (up to $15K) 0.10% ($15K+) (extra 1% w/relationship)
- BankFirst Financial Services - 1.50% (up to $50K) 0.25% ($50K+)
- Legence Bank - 1.50% (up to $25K) 0.25% ($25K+)
- Bank of Blue Valley - 1.50% (up to $15K) 0.20% ($15K+), $1K/month debit card req (account review)
- Avidia Bank - 1.36% (up to $25K) 0.05% ($25K+)
- West Texas National Bank - 1.26% (up to $25K) 0.25% ($25K+)
- Bank of Internet USA - 1.25% (all balances)
- North Country Savings Bank - 1.15% (up to $25K) 0.75% ($25K+)
- State Bank of Toledo - 1.00% (up to $25K) 0.15% ($25K+)
Certificates of Deposit:
- Survey of the Best CD Rates for November 16, 2012 (Nationwide & Local)
Various Deposit Account Deals
- Bank Promotions
- Best IRA CD rates, local and nationwide deals
- Latest CD and Savings Account Deals with No Major Deposit Limitiations
Bank Account Alternatives - NOT FDIC Insured
- Ally Financial Demand Notes - 1.75%, Ally Demand Notes review
- Duke Energy PremierNotes - 1.50% rate for $50K+, Duke Energy PremierNotes review
- Ford Interest Advantage - 1.10% rate for $50k+, Ford Interest Advantage review
- GE Interest Plus - 1.10% rate for $50k+
- Vanguard Tax-Exempt Money Market Fund - 0.07% 7-day yield
- Vanguard Prime Money Market Fund - 0.03% 7-day yield
- Fidelity Money Market Fund - 0.01% 7-day yield (reviews on Fatwallet)
- Fidelity Municipal Money Market Fund - 0.01% 7-day yield
- TIAA-CREF Money Market Fund - 0.00% 7-day yield
- PayPal Money Market Fund has ended effective 7/29/11
- FW Thread on Treasury Bills
- Series I Savings Bond Purchases from Nov 2012 thru Apr 2013, I Bond Article, I Bonds as CD Alternatives