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Review of the Best Bank Deals of 2014


Review of the Best Bank Deals of 2014

We’re ending another year with the Fed’s zero interest rate policy (ZIRP). Even with no hints of rate hikes from the Fed and with the 10-year Treasury yield falling from 3.00% to 2.17%, we saw small upward movements of deposit rates. That’s a good sign that once we finally approach a Fed rate hike, we may see some significant upward movement. Will there be a Fed rate hike in 2015? I’m planning another article for tomorrow that will offer some of my predictions and deposit account strategies for the New Year. In this article, I’ll review how deposit account rates changed during the year. I’ll also review some of the best bank deals that were offered in 2014. Hopefully, we’ll see even better deals in 2015.

Looking just at internet banks, the rates of the top savings accounts and CDs did rise this year.

Internet Savings Accounts

When 2014 started, only 4 internet banks were offering non-promotional savings or money market accounts with 1% APYs. That 1% club has grown quite a bit this year. There are now 12 internet banks with rates of at least 1% APY with the top rate of 1.25% APY at UFB Direct.

5-Year CDs

If you exclude last year’s hot PenFed CD deal and if you look only at internet banks, the top 5-year CD rates have risen. When 2014 started, the top three 5-year CD APYs at internet banks were 2.16%, 2.15% and 2.05%. Now the top three 5-year CD APYs at internet banks are 2.40%, 2.35% and 2.30%.

Best Deals of 2014

The one aberration in the 5-year CD rate trend is PenFed. Last year PenFed was offering a 3.04% APY 5-year CD. That was way above what any other bank or credit union was offering. I haven’t been able to get any hints about January’s PenFed CD rates. Unfortunately, PenFed’s CD rates fell in February, and they haven’t come close to 3% since that time.

Another great CD deal in 2014 was the Prime Rate CD at Tobyhanna Federal Credit Union (soon to be Valor Credit Union). It was a 3.04% APY 7-year CD with unlimited add-on deposits. TobyFCU still offers this Prime Rate CD with a 3.00% APY, but this rate now only applies to balances up to $100K.

For nationally available CDs, those CD deals at PenFed and TobyFCU had the highest rates. A few all-access credit unions came out with some long-term CD deals that weren’t quite as good, but were noteworthy. One is still offering the deal.

NASA Federal Credit Union began offering its 49-month CD special in February. It then increased the rate by 25 basis points to 2.25% APY in June, and that rate is still available as of 12/31/2014.

The other noteworthy deal came from Chartway Federal Credit Union. In October Chartway came out with several competitive rates on its new web-only CDs. The 5-year CD rate was 2.52% APY for a $10K minimum deposit. That rate ended in December.

Best Short-Term CD Deals

For those who didn’t want to go long on their CDs, several credit unions had some very competitive short-term CD deals in 2014.

The all-access credit union Xceed Financial began offering a special 1.50% APY 17-month CD last January, and this special lasted through much of 2014.

For part of September and October, Kinecta Federal Credit Union was offering a Jumbo 2-year CD with a 2.00% APY. In addition to being open to Greater Los Angeles residents, anyone could join Kinecta via an association membership.

Also in September, Agriculture Federal Credit Union was offering a special 30-month No Penalty CD with a 1.50% APY.

The all-access Connexus Credit Union has been offering a 12-month Step-Up CD with a blended rate of 1.374% APY. It’s also a No Penalty CD that allows for one penalty-free early withdrawal. This CD special was scheduled to end today.

What Was Your Favorite Bank Deal of 2014?

The above is just a sample of the best bank deals of 2014. Please leave a comment about what you considered to be the best bank deal of 2014.

With the economy showing real signs of strength, I’m optimistic that we’ll see even better bank deals in 2015. Tomorrow, I’ll list some of my predictions and deposit account strategies for the New Year.

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Anonymous   |     |   Comment #1
A CSR at NASA FCU told me yesterday that the 49 month CD promotional rate will rise to 2.30% on January 1, 2015.
cumulus   |     |   Comment #15
Better! Website shows APY=2.35% today.
Anonymous   |     |   Comment #16
Just wait until the Feds raise rates this year and this NASA rate would be a smart deal...for it!
Shorebreak   |     |   Comment #2
My favorite bank deal of 2014 was offered by Navy Federal Credit Union in February on their 5,6 and 7-year share certificates.
5-year 2.47% dividend on $20K deposit.
6-year 2.66% dividend on $20K deposit.
7-year 3.00% dividend on $20K deposit.
Anonymous   |     |   Comment #3
My favorite:  the  7 year certificate at Tobyhanna
Anonymous   |     |   Comment #4
Has anyone heard what PenFed's January rates will be?
Anonymous   |     |   Comment #5
these rates are pathetic!!!
Anonymous   |     |   Comment #6
Ken, thank you for your work in 2014. Here's hoping for the return of the American free market economy in 2015.
scottj   |     |   Comment #7
Best deal for me in 2014 was Penfed 5 year 3.04%, since I opened that last January I have been lucky with going almost all year with no CDs maturing, only CD to mature was yesterday, First Priority 5 year 3.50%, sad to see that one end :(. But yea rates suck now but I don't let it bother me as I have a great year. Wishing Ken and the rest here a Happy New Years!!
Anonymous   |     |   Comment #8
The low rates of return look a little better when you factor in the added subsidies that you get from Obamacare due to the lower income that you receive from the low cd rates.
Anonymous   |     |   Comment #9
Win-win!  :-)
scottj   |     |   Comment #10
Also a couple years ago I decided to heck with getting such low rates on my IRA CDs so I moved them to an IRA Brokerage account and started trading, Mostly BAC and INTC and gains our well over 40%, best of all since it's in my IRA it is not counted as income so does not effect me getting subsidies! 
Anonymous   |     |   Comment #11
Not a CD person's mindset...different "ballgame/risk" entirely!
Anonymous   |     |   Comment #12
Good move. INTC pays about 2.5% dividend also.  May be wise to put in a stop limit to protect your gain though.
OldGuy   |     |   Comment #13
I appreciated XCEL FCU's 24-month 2% APY CD and CapEd's 36-month 2.12% APY "Black Friday" CD promotions.  You had to scramble to take advantage of these, but the application processes were simple and the CSRs very helpful.
cumulus   |     |   Comment #14
> The all-access Connexus Credit Union has been offering a 12-month Step-Up
> CD with a blended rate of 1.374% APY. It’s also a No Penalty CD that allows
> for one penalty-free early withdrawal. This CD special was scheduled to end
> today.
This deal has been extended; new termination date = 1-31-15.