Best Bank Account Interest Rates - Summary for September 20, 2016

The FOMC meeting began today. At 2:00pm on Wednesday, the FOMC statement should be released along with the quarterly economic projections, which include the fed funds rate “dot plot” projections. Fed Chair Janet Yellen will then be holding a press briefing at 2:30.

I’m afraid most are expecting that the Fed will once again hold steady on interest rates. Here’s how economist Tim Duy summed up his expectations in this Bloomberg article:

The doves at the Federal Reserve will rule the roost again this week. But the hawks grow increasingly restless and their concerns will look more valid, assuming the economy gains further ground in the final months of the year. December remains on the table at this point

However, the chance of a surprise rate hike on Wednesday may be higher than many believe. The reason for this comes from the Fed’s “dot plot” which provides the Fed’s expectations for future rate hikes. The last one published in June suggested two rate hikes this year. If they choose not to raise rates on Wednesday and they adjust the dot plot to suggest only one rate hike this year, that would send a strong signal of a December rate hike. As Tim Duy described in his blog post, that creates some issues that could be eliminated by just hiking rates this Wednesday. However, I wouldn’t get your hopes up. As we have seen many times before, the Fed can easily find reasons to hold off on rate hikes.

The Fed funds futures show an 18% chance of a September rate hike which is up slightly from last week. The futures also show a slightly higher chance of rate hikes by December and February. On the downside, all Treasury yields fell from last week.The following Treasury yields and Fed funds future probabilities are based on Daily Treasury Yield Curve Rates and the CME Group FedWatch.

Treasury Yields:

• 1-month: 0.17% down from 0.25% last week
• 6-month: 0.49% down from 0.54% last week
• 2--year: 0.79% down from 0.80% last week
• 5--year: 1.20% down from 1.26% last week
• 10-year: 1.69% down from 1.73% last week
• 30-year: 2.43% down from 2.47% last week

Fed funds futures' probability of at least one additional rate hike by:

• Sep 2016: 18% up from 15% last week
• Dec 2016: 60% up from 56% last week
• Feb 2017: 62% up from 59% last week

Savings & Checking Account Rates

For the most part, banks continue to hold steady on their savings and money market account rates. If we don’t see a Fed rate hike on Wednesday, banks will likely continue to hold steady for the rest of 2016.

One positive change to my list of top nationally available savings and money market accounts is the addition of Northpointe Bank’s UltimateSavings account with a 1.12% APY for balances from $10k to $500k. The rate is guaranteed for 12 months from the time the account is opened. However, the account has some issues which are described in this account review.

One negative change to my list is the removal of PenFed’s Access America Checking. PenFed slashed the top rate from 1.01% to 0.50% for balances between $20k and $50k. The new rate is now too low for the list. This account was one of the few bright spots this year at PenFed. It has been a disappointing year with the only noteworthy PenFed CD being a 15-month special in January.

With the removal of PenFed’s Access America Checking account, the number of accounts in the 1% club falls to 20. Northpointe Bank’s UltimateSavings doesn’t qualify for the club since its 1.12% APY is promotional. The 1% club is the group of nationally available checking, savings and money market accounts that have rates of at least 1% APY. I exclude accounts that have promotional rates that are scheduled to fall after a certain amount of time. Also, I exclude accounts in which the 1%+ rate is available only for new customers. The ones on the promotional category include HSBC, EverBank, The Palladian PrivateBank, Northeast Bank, iGObanking.com’s MMA and Salem Five Direct.

Reward Checking Accounts

Banks and credit unions are also in a holding pattern with their reward checking accounts.

Like the savings and money market list, we have a new addition to the nationally available reward checking list. The new reward checking account is being offered by Bellco Credit Union. It’s called the Boost Interest Checking, and it pays 2.25% APY on balances up to $25k. Anyone can join Bellco Credit Union via an association membership.

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 reward checking, please refer to my blog post, 10 Common Traits of High-Yield Reward Checking.

Certificate of Deposit Rates

I’m now publishing my CD survey as a separate post. Please refer to my survey of the best CD rates. This recap will focus on banking news of the week and liquid accounts.

Checking/Savings/Money Market Accounts:

• Best Savings Account Rates (Nationwide and by State)
• Best Money Market Rates (Nationwide and by State)
• Best Checking Account Rates (Nationwide and by State)

• Noteworthy Accounts Available Nationwide:

Reward Checking Accounts:

• Best Reward Checking Account Rates

• Noteworthy Accounts Available Nationwide:

Certificates of Deposit:

• Best CD Rates (Nationwide and by State)
• Best IRA CD Rates (Nationwide and by State)
• Survey of the Best CD Rates (Nationwide and Local)

Bank Account Alternatives - NOT FDIC Insured

• Investment Discussion Forum

• Series I Savings Bond Purchases from May 2016 through October 2016

Accounts Removed Due To Low Rates Or No Longer Available

Removed, Rate Too Low

Post Publication Edits

9/23/16: My Direct Banking Earn More Money Market rate raised.