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Online Savings Account Rates Falling to All-Time Lows - Alternatives?

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You may be disappointed by the recent rate cuts at Ally Bank and Discover Bank. Both lowered their online savings account rates to 0.80%. For Ally, the 0.80% APY is an all-time low. The previous all-time low was in 2013 when the savings account rate reached a bottom of 0.84%. For Discover, the new 0.80% rate ties the all-time low that occurred in 2012 and 2013.

APYMINMAXINSTITUTIONPRODUCTDETAILS
0.60*%--Ally BankOnline Savings Account
0.60%--Discover BankOnline Savings
Rates as of September 27, 2020.

A few of the new and smaller online banks have been cutting their rates much more aggressively. WebBank is the latest example. It just recently lowered its online savings account rate to 0.40% (half of what Ally now offers).

In late April, WebBank was offering 1.66% APY while Marcus was at 1.55% and Ally was at 1.50%. Last year, WebBank looked promising when their online savings account rate reached 2.50% in May 2019. Since May of 2020, their rates have been falling like a rock. This week’s cut lowered the online savings account rate from 0.75% to 0.40%.

How low will rates go?

I am worried that we will see more rate cuts to online savings accounts. During the last zero bound years from 2008 to 2015, most online savings account rates bottomed out in a range of 0.70% to 1.00%. It took three to five years after the Fed first lowered the federal funds target to its zero bound (0-0.25%) before these online savings accounts reached their bottoms in 2012 and 2013. We’re now seeing new bottoms after only four to five months of this new zero bound period. In the next year, I’m afraid many other online banks may join WebBank with an online savings account rate that’s under 0.50%.

One reason I think we should expect more rate cuts is how banks have been cutting their CD rates. Ally Bank’s 5-year CD rate was recently cut to 1.00%, and its 11-month No-Penalty CD rate was cut to 0.75%. Other online banks have cut their 5-year CD rates far under 1%. These include Barclays (0.65%), VioBank (0.60%) and PurePoint Financial (0.50%). WebBank’s 5-year CD rate is now only 0.25%.

Alternatives for savers

Savers who prefer keeping their money in deposit accounts don’t have a lot of options. There are still many high-yield reward checking accounts with yields over 2%, but these have requirements and limitations. Also, these aren’t immune to rate cuts and balance cap cuts (as seen at The Bank of Denver and at ECCU). Nevertheless, I think it’s likely that rates of many reward checking accounts will hold up better than online savings accounts. I reviewed a few in this post that have long histories of high rates.

Savers should be cautious about companies that advertise products with high yields. One example is the fintech Linus which claims that customers can earn up to 4.50%. According to Linus’s FAQs, deposits are not insured by the FDIC or SIPC. The FAQs also state that “your deposit is protected from default using borrower collateral.” I can’t say how safe it is. All I can say is that accounts at Linus and at similar fintechs have more risk than at FDIC-insured or NCUA-insured institutions. For more discussion on the importance of FDIC and NCUA deposit insurance, please see my article, Safety of Your Money - Importance of Deposit Insurance.

Related Pages: savings accounts, nationwide deals, Internet banks
Comments
Buckeyes
  |     |   Comment #2
the Fed is forcing us into the market by going to a 0 funds rate so people can borrow cheap money to buy things they can't afford.  People who have been responsible?  Who cares about them?   All I want to be able to do is keep up with the fictitious inflation numbers published. Is that asking so much? I sent half my available savings to AMEX yesterday but I don't expect them to hold at 1% either. The other half is earmarked for the market, trying to find "safe" yield. Online banking is basically dead right now. I'm in better shape than some, as my CD's still earn 2% and don't expire until March, when I expect to take it up the you know what like everyone else. It looks like my retirement income will go down next year by over 5,000. Not sure about everyone elses situation but thats a gut punch to me. You asked for our alternatives.  Mattress is starting to look good. 
Blade
  |     |   Comment #4
Agreed. The Fed is forcing money back into the Casino and was already heading this direction at the beginning of 2019 when they couldn't maintain raised rates after the Christmas stock market temper tantrum. If they lost their nerve to keep rates up back then, with almost every economic indicator in the green, I hold out little hope we'll see any favorable rates for years to come now. The Fed put the economy on life support with unprecedented stimulus creating the question of who will be brave/stupid (depending on point of view) enough to remove the breathing and feeding tubes in the future to see if it can once again live on its own? Insanely rough time for savers - no doubt.
Buckeyes
  |     |   Comment #6
I was unclear with my post as to the move I made. I sent half my savings from Ally to Amex hoping the 1% holds. I then shot 40% to Etrade that won't clear till Tuesday, on purpose taking it out of Ally investing, so I can have a cooling off period before I am able to invest/gamble. I left the other 10% in Ally, my bank since the early 2000's, so I can pay bills and get furious at every time I sign in. Then I sacrificed a chicken to Jobu for luck. Just imagine, I am actually chasing a yield of 1%. Online banking has literally become a job for the insane. Good luck with whatever moves you guys are making.
Choice
  |     |   Comment #9
Right, Buckeyes, anything to keep me in a lower tax bracket! With lower interest rates it’s bankable and coupled with less need to chase rates!
Mikey1
  |     |   Comment #11
You do not want to invest in the market based simply on boastful promises without doing your homework. And you can still get burned badly. I’ve got hundreds of shares of Enron available if anyone has an offer greater than its value, which is zero.
Buckeyes
  |     |   Comment #18
of course you are right Mikey. I go to multiple sources and try not to chase a company like Amazon, and arent we all kicking ourselves over that! I'm an off and on investor for 20 years and once you think you know the game, you realize it's someone elses game and get hurt. As they say at the casino, don't "bet" any more than you can afford to lose.
CuriousDave
  |     |   Comment #52
Regarding your Enron shares, unless you are sitting with a significant unused capital loss carryover, you may as well take a tax write-off by finding a broker - if you still can - to take over the shares for one penny. You could even pay the broker a few dollars for taking them off your hands and you would still be ahead. Why hold onto them?
deplorable_1
  |     |   Comment #3
This list is intended for folks who just want to deposit money with no debit card/direct deposit hoops like rewards checking accounts.

The only FDIC insured alternatives for liquid savings are the small capped high yield accounts offered at some FI's. Each account will be capped at $500-$2,500 for the higher yield though. Just type in smaller dollar amounts in the search for savings and money market accounts here on DA and you will see the higher yield options. I won't list them all by name as I don't want to kill the deals due to the DA effect.

Another alternative is the prepaid debit card attached savings accounts from NetSpend and Insight. The NetSpend card pays 5% on the first $1,000 and .5% above that(no cap). The Insight card used to pay 5% on $5,000 but now pays 1% on $5,000. It's capped at $5,000 but the interest above $5,000 continues to compound at the same 1%. I have 8 of these accounts which is plenty for a emergency fund of liquid cash if necessary.

For non FDIC alternatives there are the corporate debt accounts:
Mercedes-Benz first class demand notes...........2.25%(accredited investors only)
GM Right Notes..................................................2.00%
Ford Interest Advantage.....................................1.2% - 1.4%
Duke Energy Premier Notes...............................1.2% - 1.4%
Ally Demand Notes.............................................0.75% -1.11%
During down markets these hold up better than Savings/MMA's and money market funds.

Obviously all these rates can also change but all these type of accounts tend to keep their rates higher than most other options long term.
lou
  |     |   Comment #15
Do you own any of the corporate notes?
deplorable_1
  |     |   Comment #21
I have all of them except for the Mercedes notes. Ally demand notes is basically my checking/bill pay account. GM Right Notes is my temporary holding account in between CD's, bank bonuses etc. I'm in the process of moving money out of the GM notes into add-on CD's at the moment. Might be a bit too risky at this time due to covid-19/auto loans etc. I keep all of them open with the minimum balance and move money to the highest yielding account as rates change.
milty
  |     |   Comment #26
@D1: I assume, if available, you are still pursuing CC/CDs? This has been something I have given much thought to, but then put on hold due to the glorious but short-lived rates of the roaring 18/19s. Any news on these?
deplorable_1
  |     |   Comment #37
Yes Milty I'm still doing that every month but I didn't want to kill the deal by mentioning it again on here. Earning 4% tax free(cc rewards) plus the rate on the CD's which isn't much.
thefed
  |     |   Comment #27
Deplorable_1-This is good information. How do you buy the notes?
thefed
  |     |   Comment #28
How do you buy these notes?
Rickny
  |     |   Comment #29
#28 FYI Theses notes are unsecured securities and are not FDIC insured

Ally derives nearly three-quarters of its revenues from the auto finance business. Ally had quarterly net loss of $319 million. Fitch gives Ally a BBB- rating which is the lowest investment grade rating. The rating is on negative watch.

I'm not implying they are going belly up but know what your getting into.
deplorable_1
  |     |   Comment #36
Right Rickny they are not FDIC insured which I mentioned in my post and I'm in the process of transferring the money into various add-on CD's due to the covid uncertainty at the moment. I did the same thing with GMAC demand notes back during the GM bankruptcy/financial crisis. I'll keep the minimum in them for now until this all blows over. Nobody has ever lost any money in these accounts that I'm aware of but it still pays to be cautious at this time.
Rickny
  |     |   Comment #40
d1 Many years so I had accounts in GE Intrest Plus which was the same product as Ally notes. At the time GE was one of the few companies that had AAA credit rating At that time I had no problem putting large sums of money in that account.
deplorable_1
  |     |   Comment #35
You can just apply on their website. You don't have to purchase the notes and they are 100% liquid 6 days or so after deposit.
calwatch
  |     |   Comment #48
Also, T-Mobile Money with $3,000 at 4% with a $200 deposit every month, and I Bonds and even EE Bonds if you are willing to stomach the 20 year holding period.
CuriousDave
  |     |   Comment #53
Did the opening of so many new accounts have any impact on your credit score? Did you close any of them and how did that impact your score?
Shelby
  |     |   Comment #5
As I have mentioned here for months...rates will/are falling like a brick and the kasasa accounts will be no exception. They will follow suit now! 
For those of us that locked in 3/5 year CD rates the last 12/24 months we have 3/4 years to ride this storm out until rates rise again.
Buckeyes
  |     |   Comment #7
good job Shelby. I was new to the CD game when I got my select CD's with Ally. If I had known that the pain is less than I imagined if I needed the dough back, I would have done more. But at least I did something.
Duck
  |     |   Comment #23
Very true Shelby I took everything last Nov an Dec an stuck it in Justice at 3.0% know I didn't an don't think anyone had seen this coming or anything like this before I'm gettin up there half century mark I really do not think 3-5yrs is going to be enough this time around between the fed an the fact we cant even pay the interest anymore we are in for a world of hurt . I really think if they cannot get a handle on whats goin on we might see a implosion IDK where bottom will be but think 10-20yrs is more of what I see for getting through this storm

Now I have just few grand left except what I have in safe an my monthly divies in a local savings that pretty much every single time I sign into it I see a new lower rate last time it was down to .95 I just use it to park that dividend $$$ an maturing CD's until I can roll it into something new but there hasn't an I can't see any except for some down n out looking to stave closing their doors.

Wait till tax man comes a callin this year surrounded by moe n curly I'm anticipating their gonna throw everything at us including the kitchen sink Federal State an County
#8 - This comment has been removed for violating our comment policy.
Cracker
  |     |   Comment #10
Chase is running a promo where if you deposit $15,000 of new money into a new savings account you will get a $200 bonus. You must keep the money on deposit for at least 90 days before the bonus will be paid. You also can't close the savings account for a minimum of 6 months or you forfeit the bonus. The account requires a $300 minimum balance to avoid the $5 monthly fee.

So basically, open the account, transfer in $15,000, wait 90 days for the $200 bonus, transfer out $14,900 after the 90 days, wait until the 6 months are up, and then close the account and get the final $300 back. The regular interest rate for the savings account is 0.01%.

I've done this before and just did it again. There is a 2 year waiting period before you can participate in this offer again.

https://accounts.chase.com/consumer/banking/online/savings?jp_aid_a=T_63093&jp_aid_p=cxo_account_dashboard%2FBanner
Mikey1
  |     |   Comment #12
I do this as well every two years and am due to reopen (will use the proceeds for the recent Ally promo). You can increase the overall return from CHASE by opening a checking account simultaneously (same promo rules of once every two years apply). You’ll get an additional bonus of around $300 or so with only the burden of scheduling a direct deposit (doesn’t have to be every month).
Hooked
  |     |   Comment #13
@Mikey1 - Chase currently has an even better deal. If you open both Checking and Savings at the same time, they will add another $100, totaling $600, with the same requirements.
P_D
  |     |   Comment #33
Does an ACH from your own account at another FI count as a direct deposit for the Chase deal? Or is a "real" ACH Direct Deposit required?
Hooked
  |     |   Comment #38
@P-D, the short answer is yes but not all FI would count. If you go to the Doctor of Credit website, type "Chase $600" in the search box, you will see this current Chase Checking + Saving bonus with all details and commentary from posters. In there, click on the link at "Direct deposit required" to see data points from posters as to which financial institutions had successfully met (or failed) the "direct deposit" requirement with an ACH transfer from the person’s other account to Chase. In the past 12 months, I have received many bank bonuses that required "direct deposit" when I merely did ACH transfers from my other bank accounts to the new bank.
OldTimerMike
  |     |   Comment #45
CHASE BANK ... https://account.chase.com/consumer/banking/LC92272
Buckeyes
  |     |   Comment #14
do you know if it's a hard pull? I believe I did this last year but I'm not completely certain.  Never mind as I went ahead and it opened the account anyway, adding it to my Chase credit card page., and now it says if you have done this before you are not eligible for 2 years..  It looks to me like Chase opened the account without verifying that.  
enduser
  |     |   Comment #16
I opted for the bonus route. This year by the end of November I will have cleared $3200 in bonuses.
2020 Bunus Earninings
Completed: BB&T CK $600, Fifth Third CK $250, SlickDeals HBC SV $125, CIT SV $300
In Process: CiTi $400, SoFi Cash $125, Wintrust CK $300, Wells Fargo CK $400, Suntrust CK $400, Suntrust SV $300

I also just reviewed my credit cards and retired two of them that are were outdated on the benefits they offered. I had them replaced with a different card from the same issuers with much better benefits and cash back offers, and I scored an additional $200 credit card statement credit on one and $150 on the other while at it. I carry no balance so the rate they charge is of no concern to me. My only requirements are no annual fees, and cash back or statement credits.

I also opened one of these low balance high interest rate accounts that deplorable speaks about. The one I selected makes $5.00 every month in interest. That's $60 dollars a year for doing nothing.
Buckeyes
  |     |   Comment #19
@Cracker I did a Chase triple play tonight. Opened up savings, investment and credit card, which should net me $600 in bonuses. Without your post I never would have pursued this. Thanks! Oh and Ally, you're fired.
Cracker
  |     |   Comment #20
Glad I could help. Ally's rates may be low, but their system works well with fast ACH transfers and large daily limits. I may move some money out, but not all of it. Overall, they're decent and their regular rates are no worse than most everyone else at the moment.

My short term plan is to cash in my maturing CDs and park the money in a liquid account to access whenever another good deal like Chase has comes along. No need to tie up my money at these pathetic rates.
deplorable_1
  |     |   Comment #57
Nice bonus list enduser. I did that last time rates were at 0%. Now they make you wait 12-24 mo. between bonuses now so I try to spread them out a bit.
That SoFi bonus $125 x 2 hit my account in 2 days fastest bonus I ever got a new record. I think I will do the direct deposit $75 x 2 now. Doc says the bonus posts as soon as the direct deposit is received.
FresnoMan
  |     |   Comment #22
I received an offer in the mail from Fifth Third Bank where you can earn $250 for opening up a checking account with no required minimum but making direct deposits totaling $1,000 within the first 60 days. By adding another $10,000 you can earn an additional bonus of $350. To me this was better than the Chase offer but unfortunately I don't have anything that provides for a direct deposit. Such as life, huh?
Hooked
  |     |   Comment #24
@FresnoMan - if your mailed in coupon is the same as the one I received, it says, ‘A qualifying Direct Deposit is an Automated Clearing House (ACH) credit, which may include payroll....etc’ so an ACH would qualify. A poster at Doctor of Credit said s/he called the bank to sign up with the unique offer code, and funded the account with a push from Marcus. In just a few days, s/he could already see online that the DD requirement had been met.

One more thing, to get the $350, my coupon says the additional deposit required is $15000 but I agree it is a good deal. I did a similar bonus last year. Good luck.
Rickny
  |     |   Comment #25
Did the Chase offer for $200. Already have a checking account with Chase. Logged onto my account and opened the savings account and funded in less than a minute.
P_D
  |     |   Comment #31
"if your mailed in coupon is the same as the one I received, it says, ‘A qualifying Direct Deposit is an Automated Clearing House (ACH) credit, which may include payroll....etc’ so an ACH would qualify."

Be careful with this.

There is a difference between an ACH transfer you make to transfer your money from one FI to another and an "ACH Direct Deposit." The latter is a transfer from a business or the government to your account. Both are ACH transfers, but the one you do from your FI is not an ACH Direct Deposit. So according to the language I see here, it doesn't appear to me that it would qualify. I would at least get a verbal clarification first before taking the deal to try to ensure it does.

Whenever a "Direct Deposit" is required, this is always the most pertinent question because the number of ACH Direct Deposits most people is limited to between zero and maybe one or two. So they may not be able to do the deal if inter-FI transfers from their own accounts don't qualify.

So the question is always: Is an ACH transfer the depositor makes from their account at another FI a qualified Direct Deposit for purposes of the deal.
Hooked
  |     |   Comment #39
@P-D, please also see my response to your question above. For Fifth Third Bank bonuses, in the past, they required people to apply in person, and did not have any "direct deposit" requirement that I was aware of. Now that people can even apply by phone, no doubt due to Covid, I think the "direct deposit" verbiage was added so that people don't have to open in branch and make deposits.

@FresnoMan, I hope you will take advantage of the coupon, especially since you can apply by phone. It was an easy bonus for me last year.
FresnoMan
  |     |   Comment #41
Thank you for your reply. And I appreciate your concern greatly. I did read the wording you mentioned regarding an ACH and thought the same thing. With the word MAY include sticking out to me considerably, the pessimist and me suggested I avoid it.

The Doctor of Credit poster that you mentioned reminds me of the same thing occurring when I performed the same action opening up an account at Huntington Bank. I have to say it's a small task to take the chance so I should take your advice. I did check the offer again and it clearly states the additional bonus kicks in for $10,000. So now I feel special.

Thanks again for your input and for taking the time in doing so.
Hooked
  |     |   Comment #42
@FresnoMan - your kind words made me feel special too. Speaking of the Huntington Bank, their current Huntington 25 Checking $500 bonus promotion is a good deal though not available nationwide. You only have to deposit $15k, withdraw the bulk of it, wait out three months and bonus will be paid within 14 days. There is a $25 monthly fee if the account does not have a minimum $25k balance but fees for the first two months are usually waived.
Buckeyes
  |     |   Comment #30
why was the Linux guy and the post reviewing his company removed? I suppose advertising is prohibited or was it something else? Also is there a list of posting rules anywhere? Thank you. 
Never mind I just saw the rules under the comment but I had already hit enter.  I really wish we were allowed to delete posts on our own.
Choice
  |     |   Comment #34
In the interim delete by using edit and put all periods in text...Ken, will get it!
w00d00w
  |     |   Comment #32
those with an existing whole or universal life insurance contract may currently be able to get a higher overall rate of return on additional temporary deposits there when compared to prevailing rates in the CD marketplace. at least worth checking the terms of your policy at this point.
Buckeyes
  |     |   Comment #43
So I backed off and will get out of the Chase investment promo. A $200 bonus on a 90 day commitment of a whopping 25K really isn't worth it, even though it would easily still be better than Point friggin 8 percent now around the country. I will not let Powell win. I can't be taking crazy chances yet again. What I did do is qualify once again for the credit card which pays a whopping $200 after spending $500, which is basically 2 cell phone and 2 cable payments. I don't quite get that promotion but yay, free money. I also will hope to hold 15K in my new savings account that Cracker spoke of for that $200 bonus. So sometimes time passing really does clear the mind, as something about that Ally drop to .8, no, point friggin 8, a record low for them, just exploded in my mind and I wanted blood. But the answer to that isn't going nuts in the market. Remember last year how everyone was successful? Yea well I lost 14K because of two energy stocks that blew up. Check stock GPOR and look what happened last year if you want to see misery. Anyway, sorry for the long post, but I'm thankful for this board where I can share stuff and you guys teach and share stuff. I'm Irish so..let's Carry On.
P_D
  |     |   Comment #44
I feel your pain Buckeyes. I'm very fortunate to have been able to create a bank deposit strategy to take advantage of the relatively higher rates of the past couple of years that will carry me through the next few years. But I still appreciate all the great information here from both the site itself and the members who post here. I am always looking for opportunities.

My biggest concern now is that the policies that created the economic growth environment that led to those higher rates will be undone after November and cause this temporary situation to turn into a catastrophically long depressed rate environment. The pandemic created an opportunity to blame the economic stress on the policies rather than on the pandemic itself, and I fear that it may cause people to throw the baby out with the bathwater. Reversing some of these policies now, after the economic blow of the pandemic, could well create a long and catastrophic depression.

On the other hand, once the pandemic passes, if the current policies remain in place, and hopefully strengthened even more, the economy could snap back to pre-pandemic levels like a rocket and bank rates could suddenly start climbing.

I think it all depends on November's results. I've never seen such a stark contrast.
OldTimerMike
  |     |   Comment #46
Rates have been going down for 4 years! We savers, the little guys, have been financing the high rollers of Wall Street for years. Any change in November will be better than now.
RichReg
  |     |   Comment #47
Ummm... DEPOSIT rates overall have been going down since the Financial crisis of '08. Even though they started to stage a comeback from 2018-2019, the Fed is now literally stonewalling them due to Covid or Trump or whatever else.

Yes, a change would be better...but will there ever be a favorable one?
GreenDream
  |     |   Comment #49
Sorry oldtimer but you are wrong. Deposit rates went down in 2008 (due to the "great recession", perhaps you heard about it) and stayed down until 2015/2016 when they finally started to climb back up and were rising for most of the past 4 years, peaking in 2019. It's only this past year that they've fallen once again.
RichReg
  |     |   Comment #50
Yeah, greendream: 'Started' to climb in 2015 is a nice way to put it, but in the real world (for us);;
I was getting my BEST CD deals from late 2017 to late 2019, the sweet spot.

Ooo la, la ..if only again ...but as most do here, I fear those days may never return. :(
Buckeyes
  |     |   Comment #51
with Europe and I believe Japan offering garbage rates, it gives us the excuse to make ours garbage as well. When Powell took the famous dump to 0 on a Sunday night I raced to my computer as fast as possible and locked in an Ally 1.9% 13 month select CD available at that time a half hour after it was announced. I had no idea that would be a mistake, as rates are going nowhere in the next 13 months. I should have done 2 years at least.  I'm new to the CD game and have been content with the savings rates offered until this collapse.  Again the original question was what are our alternatives? Perhaps explore bonuses like Enduser, or perhaps Bitcoin and gold like my friend. Or perhaps the dangerous dividend market yield play. I just don't know.
Reader1
  |     |   Comment #54
In relation to investing in Demand Notes (comment #3), When considering such an investment, DA readers should carefully assess and understand the risks involved by reading the prospectus for each investment carefully. Demand Notes are UNINSURED corporate obligations with a degree of risk that may not be proportional to the interest earned on the Notes. I have listed some relevant risk disclosures on two such Demand Notes (as examples) below:

1. Ally Demand Notes (Information extracted from Ally's website):

"Demand Notes are unsecured debt obligations of Ally Financial offered in the U.S. by prospectus only."

"(Ally) Demand Notes:
-Are not FDIC insured
-Are not bank guaranteed
-Are not deposits
-May lose value"


2. GM Right Notes (Extracts from the prospectus issued by General Motors Financial Company, Inc. for GM Demand Notes - Marketed and sold as the GM "Right Notes"):

"The interest rate paid on the Notes may not bear any relation to the investment risk."
"The Notes are not a money market fund or other type of diversified investment."
"The Notes are not equivalent to a deposit or other bank account, and investments in the Notes are not insured by the Federal Deposit Insurance Corporation or any other source. The Notes are not a brokerage account."
"GM Financial is the sole obligor on the Notes."
"The Notes are not transferable."
P_D
  |     |   Comment #55
Years ago I had a lot of money in GE Capital's similar demand note product. But those were different times. These are all unsecured, subordinated debt that is last on the debt line in the event of bankruptcy or default.

In my opinion the risk premium on these is way too low today to make them a sensible option.

The safe rate today for a liquid account is 0.8-1.0%. Makes little sense to take that much risk for a hundred extra beeps, especially since the spread is likely to narrow in the near term.
P_D
  |     |   Comment #56
.................................................
losingtrader
  |     |   Comment #58
Might I suggest a fixed deferred annuity , that is treated for accumulation purposes as a CD, but obviously subject to risk of insurer default. Worst case: Every state has a guaranty fund to cover defaults up to 250k per insurer but it normally takes several years to get money back in the event of a "failure" because insurers are typically put into rehabilitation for a period of time before insolvency and you aren't permitted to withdraw during that time.

The latter is the worst case.
Midland National , A+ rated by AM Best , is offering 3.25 on a 7 year annuity ( taxed at the end and you want to do this in a retirement account if you'll be under 59.5 at the end of the annuity)
Security Benefit (A- with Best) is offering 3.0 on $100k and 3.1 over 125k on a 4 year annuity.
Each allows at least interest to be withdrawn during the term.

There's also Upstream Life paying 5.50 on yr 1 and 4.65 on years 2-15. It's rated B++ by Best.
I won't placemoney with them because they are losing huge sums paying these rates while maintaining a AAA portfolio of bonds. I'm not clear what they are doing, but after speaking with them I want no part of it even if there's the Texas Guaranty Fund
Buckeyes
  |     |   Comment #59
so as an alternative, thanks to cracker who i am grateful posted this, no harm no foul,  i attempted to open an account at Chase. What a disaster that has been. First they won't accept my transfer from Ally without talking to them. This has never happened before. Second, twice I called and listened to awful hold music only to be disconnected both times after about 25 minutes. The third call I tried they said the wait was over 30 minutes. I don't think so!. I guess I am too small of a customer for them to worry about, even though I was transferring the entire 15k to get the bonus. I know someone at Chase, true story, whose job is to kiss the rear end of million dollar clients.  He's not a close enough friend that I could go to for help.  No online chat either. I've been reading online reviews and although Karen Finerman on CNBC views JPM as best in breed, not many others do, with lots of complaints about awful customer service. Live and learn. I'm not calling them again. If they have questions THEY can call ME.  I'll let them eventually cancel the transaction and try something else with another bank in a worst case scenario. So alternative #1 for me looks to be an epic fail. In these days of online chat, I refuse to sit on hold for 45 minutes at this stage of the epidemic. Cable used to be a 30 minute hold.  Now it's 30 seconds.   I also waited on online chat hold for 15 seconds with American Express last Friday. That's the way it should be. 
dale26s
  |     |   Comment #60
I maintain a small Chase free checking which allows me to easily do this every 2 years

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