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Best Bank Account Interest Rates - Summary for Week Ending May 4, 2014


Best Bank Account Interest Rates - Summary for Week Ending May 4, 2014

The FOMC meeting last week provided few clues about future rate hikes. The bond-buying tapering and the interest-rate forward guidance continue with no changes. A lot will depend on a strengthening economy. So we’ll need many more days like last Friday with a better-than-expected jobs report. Even if we see a consistent and strong improvement in the economy, the Fed will be in no rush to raise rates. The latest evidence of this came from Dallas Fed President Richard Fisher who’s known to be an inflation hawk. As reported by the Wall Street Journal, Fisher said on Sunday that "it’s too soon for the Federal Reserve to begin thinking about raising interest rates." He said that he expects the bond-buying tapering to complete in October. "Then we have to see how the economy is doing, including these broader measures of unemployment, and where we stand, before we can talk about how we might move the short-term rate." If the economy shows steady growth this year, the Fed may start debating amongst themselves in 2015 when to begin the rate hikes. This will be the time when we’ll wish for more inflation hawks at the Fed. If inflation doves win the debate, I think we’ll be lucky to see a rate hike in 2015.

Treasury yields fell last week even with a better-than-expected jobs report. The change in Treasury yields and Fed funds futures in the last week are shown below. The following numbers are based on Daily Treasury Yield Curve Rates and the CME Group FedWatch.

Treasury Yields:

  • 1-month: 0.01% same as last week
  • 6-month: 0.05% up from 0.04% last week
  • 2--year: 0.42% down from 0.43% last week
  • 5--year: 1.67% down from 1.72% last week
  • 10-year: 2.60% down from 2.68% last week
  • 30-year: 3.37% down from 3.45% last week

Fed funds futures' probability of rate hike by:

  • Jan 2015: 15% up from 14% last week
  • Apr 2015: 38% up from 33% last week
  • Jul 2015: 69% down from 70% last week
  • Oct 2015: 92% same as last week

Savings & Checking Account Rates

Last week was another quiet week in the savings and money market accounts that I track below. Only one bank had a rate change. Union Federal Savings Bank cut its money market account rate from 0.90% to 0.85%.

The number of institutions offering a non-promo 1% savings or money market account continues to be five. SFGI Direct is the latest one in this club with its 1.01% APY savings account. Three of those five are MySavingsDirect savings account, the iGObanking.com money market account and the SmartyPig savings account. All of these are offering a 1.00% APY. The highest rate continues to be at Connexus Y.E.S. Money Market Account which has 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. Note, I exclude EverBank and Salem Five Direct. Only new customers can earn over 1% at these banks.

Out of the above five, the accounts at Connexus Credit Union and SmartyPig have the longest history of top rates.

Reward Checking Accounts

Last week was also a quiet week for the nationally available reward checking accounts. There were no rate or balance cap changes. However, one bank announced monthly requirement changes. INOVA Federal Credit Union sent out email to customers informing them that starting July 1st, customers will have to make at least 5 debit card purchases per month each totaling at least $51. This will replace the current debit card usage requirement of 15 purchases per month of any amount. Thanks to DA member AtlantaWolf who reported this news in the DA forum.

INOVA’s Ovation Checking is currently the best nationally available reward checking account in the nation with a 3.00% APY for balances up to $20K. This requirement change may be difficult for those who have multiple reward checking accounts or prefer to use cash-back credit cards for large purchases.

There continues to be six banks and credit unions in my table below offering reward checking yields of 2.00% or above for balances of at least $15,000.

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:

  • none

Rate/Balance Cap Cuts:

  • Union Federal Savings Bank savings - 0.85% [was 0.90%]

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 Last Week's Posts

Banking News/Resources Savings/MMA - National
  • Nothing new this week
CD Deals/Resources - National Checking/Savings/CC Bonuses
  • Nothing new this week
Reward Checking Accounts CD and Money Market Deals - Local
  • Nothing new this week
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 May 5, 2014

Checking/Savings/Money Market Accounts:

  • Noteworthy Accounts Available Nationwide:
Connexus Credit Union1.15% ($100K) 1.00% ($50K) 0.75% ($20K)MMA - active chk required
EverBank1.10% (6mo intro rate) 0.61% ongoing rateMMA/Checking - account review
SFGI Direct1.01%savings account, account review
MySavingsDirect1.00%savings account - account review
iGObanking.com1.00% ($100K) 0.75% ($75K) 0.50% ($25K)savings account (no check writing) account review
SmartyPig1.00%savings account - account review
Salem Five Direct1.00%savings, for new customers only
First Trade Union Bank0.95% ($2.5K)FT High-Yield Savings, account review
GE Capital Retail Bank (formerly MetLife)0.95%Savings
Incredible Bank0.95% ($2.5K min)MMA account review
CIT Bank0.95% ($25K) 0.90% ($100)savings account, account review
Bank5 Connect0.90% (min $100)online savings account (not available for MA and RI residents)
GE Capital Bank0.90%online savings account
Sallie Mae Bank0.90%MMA account review
Union Federal Savings Bank0.85% (min $2.5K)MMA account review
Barclays0.90%Savings account review
Redneck Bank0.90% (up to $35K) 0.50% (over $35K)MMA
AmericaNet Bank0.90% (up to $35K) 0.50% (over $35K)MMA
Evantage Bank0.90% (up to $35K) 0.50% (over $35K)MMA
Palladian Private Bank0.90% (min $10K)savings account
Ally Bank0.87%savings
Ally Bank0.85%MMA
Discover Bank0.85% (min $500)savings account, account review
Colorado Federal Savings Bank0.85% ($2.5K min)savings account, account review
FNBO Direct0.85%savings account
GE Capital Retail Bank (formerly MetLife)0.85% ($10K)MMA
Mutual of Omaha Bank0.85% (min $25)MMA, account review
Capital One 3600.80% ($100K) 0.75% ($50K)360 Checking
American Express Bank0.80%savings account, account review
Sallie Mae Bank0.80%savings account, account review
MyBankingDirect0.80% (min $5K)MMA
ableBanking0.80% (min $1K)MMA
Bank5 Connect0.76% (min $100)checking account (not available for MA and RI residents)
Bank of Internet USA0.75%MMA
Capital One 3600.75%360 savings account
Clear Sky Accounts0.70% (max $250K)savings account, account review
Alliant Credit Union0.70% (min $100)savings account, account review
Nationwide Bank0.66% (min $1K)MMA
Incredible Bank0.66% ($1K min)checking, account review
Alliant Credit Union0.65%Checking (req's elec. dep & e-stmts) account review

Reward Checking Accounts:

  • Noteworthy Accounts Available Nationwide:
Consumers Credit Union4.09% (up to $10K) 0.20% ($10K-$25K) 0.10% ($25K+)Rewards Checking - with cc requirements
INOVA Federal Credit Union3.00% (up to $20K) 0.15% ($20K+)Ovation Checking (not available to PA residents)
Lake Michigan Credit Union3.00% (up to $15K) 0.00% ($15K+)Max Checking
Great Lakes Credit Union3.00% (up to $10K) 0.05% ($10K+)Ultimate Checking
Belvoir FCU2.53% (up to $15K) 0.05% ($15K+)CUXcel Checking
Lee Bank2.50% (up to $15K) 0.50% ($15K+)Kasasa Cash
Capital Educators Federal Credit Union2.50% (up to $10K) 0.20% ($10K+)High Yield Checking
Flanagan State Bank2.25% (up to $10K) 0.25% ($10K+)Kasasa Cash
Security Bank2.05% (up to $15K) 1.00% ($15K-$25K) 0.30% ($25K+)Security Bonus Checking
XCEL Federal Credit Union2.01% (up to $15K) 0.30% ($15K+)Kasasa Cash Checking
ABCO Federal Credit Union1.76% (up to $25K) 0.20% ($25K+)Premiere Checking
Provident Credit Union1.76% (up to $25K) 0.11% ($25K+)Super Reward Checking
Connexus Credit Union1.75% (up to $25K) 0.25% ($25K+)Xtraordinary Checking
First Tech Federal Credit Union1.58% (up to $10K) 0.16% ($10K+)Dividend Rewards Checking
Aspire Federal Credit Union1.51% (up to $10K) 0.25% ($10K+)Kasasa Cash
First American Bank1.50% (up to $15K) 0.15% ($15K+)Everyday Rewards Checking
Community Bank of Raymore1.50% (up to $10K) 0.10% ($10K+)Rewards Checking
Community Bank of Pleasant Hill1.50% (up to $10K) 0.10% ($10K+)Rewards Checking
Redneck Bank1.50% (up to $10K) 0.50% (over $10K+)Redneck Rewards Checking
AmericaNet Bank1.50% (up to $10K) 0.50% ($10K+)AmericaNet Rewards Checking
Evantage Bank1.50% (up to $10K) 0.50% ($10K+)Evantage Rewards Checking
West Texas National Bank1.26% (up to $25K) 0.25% ($25K+)Ultimate Checking
Heritage Bank1.26% (up to $25K) 0.10% ($25K+)eCentive Account
Bank of Blue Valley1.25% (up to $15K) 0.10% ($15K+)$1K/month debit card req (account review)
Bank of Internet USA1.25% (up to $150K) 0.00% ($150K+)Rewards Checking
BankFirst Financial Services1.25% (up to $25K) 0.15% ($25K+)Kasasa Cash
Avidia Bank1.06% (up to $25K) 0.05% ($25K+)eChecking
Legence Bank1.05% (up to $25K) 0.25% ($25K+)Kasasa Cash
North Country Savings Bank1.05% (up to $25K) 0.75% ($25K+)Advantage Checking
First New England Federal Credit Union1.01% (up to $15K) 0.10% ($15K+)extra 1% w/relationship
State Bank of Toledo1.00% (up to $25K) 0.15% ($25K+)Hometown Rewards Checking

Certificates of Deposit:

Various Deposit Account Deals

Bank Account Alternatives - NOT FDIC Insured

Ally Financial Demand Notes1.25% rate for $50k+Ally Demand Notes review
Duke Energy PremierNotes1.25% rate for $50K+Duke Energy PremierNotes review
Ford Interest Advantage1.10% rate for $50k+Ford Interest Advantage review
GE Interest Plus1.05% rate for $50k+
Vanguard Prime Money Market Fund0.01% 7-day yield
Vanguard Tax-Exempt Money Market Fund0.01% 7-day yield
Fidelity Money Market Fund0.01% 7-day yieldreviews on Fatwallet
Fidelity Municipal Money Market Fund0.01% 7-day yield
TIAA-CREF Money Market Fund0.00% 7-day yield

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

gli   |     |   Comment #1
Interestingly enough - the change to Inova's 15 transactions to 5 transactions of $51 or over is a good one in a specific situation (Evolve Money - if they have your mortgage lender/energy/water company there) one can easily make 5 transactions separately to meet said requirement.

However - I am wary of applying for Inova's rewards checking because of the tales of hard credit pull + denial/difficulties... anyone care to share how their own experience went?
Anonymous   |     |   Comment #2
Changing the requirements for higher interest for INOVA reward checking is a deal killer.  Using debit cards if pretty risky to begin with and now, they want even higher amount transactions to receive the interest.  Will pull the money out of the account June 30th
James Barnes
James Barnes   |     |   Comment #3
Given the good jobs report, why did the yield fall on the 10 year Treasury?
Anonymous   |     |   Comment #6
Because the Fed knows the unemployment number no longer accurately represents the health of the economy. The labor participation rate fell and that's the important number. Many claim retirees are dropping out of the labor market so it's not a problem. However, if no one steps in to replace a retiree the number of workers declines. Gains in productivity aside, fewer workers is not a desirable outcome in a recovery. Unless, of course, those still employed enjoy higher taxes and watching their unemployed neighbor soak up the midday sun.
Anonymous   |     |   Comment #8
#6. That's a very important comment because a household where one or more members is no longer in the workforce will almost universally have a reduction in income and a significant reduction in some spending--something indeed undesirable for the production of growth of an economy, whether or not  the economy is recovering. The media has been slow to get this point.
51hh   |     |   Comment #4
$51 x 5 = $255; that is worse than the typical $5 x 15 (transactions) = $75 or even $10 x 15 = $150.  So don't fall for the gimmicks. 

One uses Evolve Money for cash rewards; not for such wasteful $51 x 5 charges. 
gli   |     |   Comment #5
Not really 51hh, why not make 5 payments of say $100 to principal or just towards one's own mortgage payment?  That is not a payment that can normally be paid for via CC without substantial fees anyway - there is nothing wasteful about it - as I said in my comment above, electricity, water and mortgage are several areas where this could be easily met.

Your particular mileage may vary - hence - individual situations. But don't hastily brand this change as bad - it is less hassle (a 1/3rd of the number of transactions) for the same interest rate.
Anonymous   |     |   Comment #7
NO, its, BAD, very BAD... good bye INOVA....   Another on bites the dust....
51hh   |     |   Comment #9
No, if you're talking about paying $100 x 5 = $500 toward your mortgage for INOVA requirement (via Evolve Money), you are indeed wasting your resource.  You should pay your mortgage via Visa GCs, which earns 5% cashback from certain cashback cards (not to be revealed here).  Anyhow, one should incur minimal changes for RCA requirements and use all resources (e.g., Evlove Money, Amazon Payment, Serve) for cashback purposes.

If you think INOVA is a good deal, be my guest.  I am afraid that you are in the very minority. 

Note: You are not aware of the full power of Evolve Money; hint: they accept GC payments.
51hh   |     |   Comment #10
Correction: minimum charges (not changes).

In your scheme, pay $51 x 5 for INOVA requirement, you waste 4% cashback.  That is: you can get a 5% card --> buy GC (1% fee) --> pay mortgage with GC via Evolve Money --> a net 4% ($10.2 gain monthly).  If you do not have a 5% card, then your usage for INOVA is ok; not best.  BTW, you can only pay toward "additional principal" that way with Evolve Money; not toward monthly payment since most banks require full monthly payment all at once.

Again, my point is that the INOVA change of terms is for the worse and is an insult for our intelligence.   
gregk   |     |   Comment #11
You think Inova's doing this just aggravate and insult its depositors.  Almost certainly, rather, it's to weed out the $1 and $2 transaction crowd that probably infect most of the RCA's being offered out there.  Still, it's confusing to me why Inova wouldn't simply require say $250 in total charges per statement cycle as alternative to going the 5/$51 route.  Can anyone speculate what advantages accrue to them in the one case that wouldn't in the other?
Anonymous   |     |   Comment #12
It would not be a DOA deal if they would accept pin debit card purchases, but for signature only, you are better off using a credit card. PERIOD
51hh   |     |   Comment #13
Hi Greg,

You raised several interesting points.  Certainly they did not make the changes to aggravate and insult :-), but I am just humored how most banks/FI paronize us by defining changes as "enhancements."

To compare the $51 x 5 vs. $255, I think the difference between the two will be small.  But maybe it is the characteristics of RCA to require multiple debit card transactions.  Maybe the fee the banks get will be larger for $51 x 5.  or it is simply how the credit union manager designs.

More fundamentally, this RCA is useless for most of us due to the low rate and low limit (now the high debit card lower limit).  $51 x 5 or $255 at once makes no difference.  It is a useless product from my perspectives.

JMHO without retribution, and to each her/his own.
Anonymous   |     |   Comment #14
Can BB or Serve account be funded by debit card in credit mode and if so, would that satisfy the high purchase levels required by INOVA and would what would the fees be for doing this with BB or with Serve?
DCGuy   |     |   Comment #15
GE Capital Retail Bank will officially change its name to Synchrony Bank on June 2, 2014.  That action will eliminate any possible confusion with the GE Capital (Industrial) Bank which will retain that name.  Current account holders will keep their account numbers and routing numbers.  So bye-bye to MetLife Bank and GE Capital Retail Bank.
ct   |     |   Comment #16
It is likely they have a little data to make that choice based on avg purchase levels.

They are assuming it is a bit more difficult to make $51 purchases than say scheming $1 ones which is true unless you have a utility or other payment that accepts multiple payments via CC with no fees.

It is interesting they are only requiring 5.
I'd also guess they figure they'll get rid of the moochers so the avg person will have more than 5 when you figure in the $10-20 purchases too.