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 June 22, 2013


Best Bank Account Interest Rates - Summary for Week Ending June 22, 2013

The big news this week was the sharp rise in Treasury yields after the FOMC meeting when Chairman Bernanke described the FOMC’s plans to end its bond purchase program (QE) within the next year. According to this Bloomberg article, the “Treasury 10-year note yields climbed the most since the start of the Iraq war.” Even though Chairman Bernanke stressed that the slowing of the bond purchases will depend on continued improvements in the economy, the markets took his remarks as a sign that the end is near for QE.

The question for savers is how will this affect deposit account rates. We have seen several cycles of rising and falling Treasury yields over the last four years. I’m hesitant to say that we’re at a turning point now. There are many factors that could cause the Fed delay the tapering of the bond buying. So I doubt we’ll see a steady climb in Treasury yields. Nevertheless, the economy continues a sluggish growth which should continue to put some upward pressure on Treasury yields, and that should also put some upward pressure on bank rates, especially on CD rates.

It will probably take longer for this to affect savings account rates. The tapering of the bond purchases is only the start of a long process of normalization. Chairman Bernanke said that increases in the target Fed funds rate is unlikely to take place until long after the bond-buying ends. The latest FOMC projections show 14 out of 19 of the members believe the first rate hike will likely take place sometime in 2015.

You can see the large increase over the last week of Treasury yields below. In addition, there was a large increase in the expectation for Fed rate hikes by 2015. Numbers are based on Daily Treasury Yield Curve Rates and the CME Group FedWatch.

Treasury Yields:

  • 6-month: 0.09% up from 0.08% last week
  • 2--year: 0.38% up from 0.29% last week
  • 5--year: 1.42% up from 1.04% last week
  • 10-year: 2.52% up from 2.14% last week
  • 30-year: 3.56% up from 3.28% last week

Fed funds futures' probability of rate hike by:

  • Jan 2015: 76% up from 53% last week
  • Apr 2015: 89% up from 70% last week

No banks failed this week. The total for the year remains at 16. At this time last year there had been 31 bank failures.

Savings & Checking Account Rates

This was a quiet week for rate changes. No nationally available savings or money market accounts on my list below had rate cuts this week.

Even though there were no rate changes, I did add two new internet savings accounts to the list. There is some confusion about the banks offering these.

The first new one is from another online division of BofI Federal. It’s called Bank X, and it has been offering an online savings account for the last two months with a yield of 0.95%. Some readers have asked why doesn’t BofI Federal just offer these new products or rates under its original brand, Bank of Internet USA. This is the original brand and the original bank name of BofI Federal that started in 2000. When I reviewed BofI Federal’s 10K, I found an overview of the bank’s business strategy regarding its distribution channels for its deposit products. It said that it planned to have “Multiple national online banking brands with tailored products targeted to specific consumer segment.” So that’s probably the reason for brands like Bank of Internet USA, UFB Direct, Net Bank and now Bank X.

Another reason why BofI Federal may be offering new products and new rates under different brands is to give them more flexibility in making changes. For example, they probably didn’t worry that much when they slashed UFB Direct’s money market rate down to 0.20%. UFB Direct doesn’t have the reputation of Bank of Internet USA. This has me wondering how much we can trust Bank X in keeping the savings account rate competitive. They do “pledge to keep the yield on your account higher than the Top 50 National Annual Percentage Yield (APY) averages …” However, they don’t mention what this average is. If BofI Federal wanted to prove its intent to keep rates competitive, they should not have slashed the rate of its UFB Direct savings and money market accounts to 0.20%. I plan to remind readers of this every time BofI Federal comes out with a new brand or product.

The other new savings account that I added is from GE Capital Bank. In the last month GE Capital Bank has begun offering an online savings account with a 0.90% APY. Like Bank X, this is also confusing. In this case the confusion is due to the name which is close to GE Capital Retail Bank. These are two separate banks that are both part of the General Electric Company. In January of this year GE Capital Retail Bank finalized the acquisition of MetLife Bank’s online deposits business. So from the consumer internet side, GE Capital Retail Bank is essentially the old MetLife Bank. GE Capital Bank has a different FDIC charter. According to GE Capital Bank’s About page, they are a “Utah state-chartered industrial bank owned by General Electric Capital Corporation” and they “act as a multi-product commercial finance bank, and use deposit accounts to fund [their] commercial loans and leases.” So now we have two GE internet banks, and this new one is currently the best deal with a 0.90% savings account with no minimum balance requirements.

Connexus Y.E.S. Money Market Account continues to hold the top spot with a top-tier APY of 1.15% for a $100K minimum balance. An important downside of this account is that it requires an active checking account and direct deposit.

MyBankingDirect’s money market account is still the best deal for those who don’t want checking requirements or balance caps. It still has a 1.05% APY. This rate has held since June 2012.

Reward Checking Accounts

This was also a quiet week for nationally available reward checking accounts with no rate changes. We did see some rate cuts on local reward checking accounts. Thanks to DA members Pearlbrown and Wisemansway who have posted on these cuts in the DA reward checking subforum.

If you’re lucky, you’ll have some local reward checking accounts that are better deals than the ones that are nationally available. I reviewed one of these this week. It’s the e-Star Checking from Tradition Bank in Houston, Texas. The account has a 2.50% APY for balances up to $25,000. The highest rate that’s nationally available with a $25K balance cap is only 2.02% APY at ABCO Federal Credit Union.

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.

New Additions:

  1. Bank X HighX Savings account - 0.95%
  2. GE Capital Bank Online Savings account - 0.90%

Rate Hikes:

  1. None

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
  • No new posts this week
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.

Rates as of June 22, 2013

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)
Margaret   |     |   Comment #1
Oh how I hope the end of QE is nigh.
Anonymous   |     |   Comment #2
I find use of the term "normalization" amusing.  What we have been experiencing these last several years is the new normal.  QE is now normal.  Bernanke notwithstanding, this will go on for as long as there are fools willing to lend a bankrupt USA money at ridiculously low rates of interest.  Once they wise up?  Want to know what happens?  Study Argentinian history.  
Anonymous   |     |   Comment #3
GE Capital Retail Bank (formerly MetLife Bank) was originally given the name of GE Capital Bank.  Apparently someone in the company noticed this name duplication and had to rename the MetLife acquisition.  I got a letter notifying me of the subsequent new name change from GE Capital.  I did not understand the reason for the new name when I got the letter, but which is obvious now.