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Best Bank Account Interest Rates - Summary for December 12, 2017


Best Bank Account Interest Rates - Summary for December 12, 2017

The December FOMC meeting started today. The meeting announcement is scheduled for 2:00 PM ET Wednesday. A Fed Funds rate hike of 25 bps is widely expected. The more interesting news will come from the FOMC forecasts that are also scheduled to be released at 2:00 PM ET Wednesday. The forecasts include both economic projections and Fed Funds rate projections. The last projections showed that the majority at the FOMC anticipated three rate hikes in 2018. Some economists have predicted that tomorrow’s projections will increase this to four rate hikes in 2018. That may be a bit too optimistic as Economist Tim Duy describes in his Bloomberg article:

I anticipate the Fed will largely retain the policy rate forecast for 2018. This may come as a surprise given the dovish Fed minutes, but the recent surge in short-term rates indicates that financial markets are waking up to the reality that solid economic growth will prompt the bank to keep hiking rates despite low inflation.

Tim Duy concluded the article with a disturbing prediction:

All else equal, the stage will be set for an inversion of the yield curve by the end of next year.

This year we’ve seen the yield curve flatten for both Treasury yields and CD rates. Early this year it appeared only a matter of time before we would see 3% 5-year CDs. Except for a few rare cases, those CDs never came. However, internet savings account rates and short-term CD rates increased significantly. We now have internet savings accounts with APYs as high as 1.65% and nationally-available 1-year CD APYs as high as 1.80%.

If Tim Duy is correct and we see an inverted yield curve next year, 5-year CD rates may continue to disappoint next year.

The trend of a flattening yield curve took a break this week. Most Treasury yields (both short- and long-dated) went up in the last week. The only exception was the 2-year note which had no yield change in the last week. For the year, the flattening yield curve is apparent. Short-dated yields have risen considerably this year while long-dated yields have fallen.

The odds of a Fed rate hike on Wednesday as indicated by the Fed funds futures continue to be 100%. The odds of at least two rate hikes by next June increased slightly to 84.5% (up from 83.4% last week).

The following numbers are based on Daily Treasury Yield Curve Rates and the CME Group FedWatch.

Treasury Yields:

  • 1-month: 1.26% up from 1.21% last week (0.52% on Jan 3)
  • 6-month: 1.49% up from 1.48% last week (0.65% on Jan 3)
  • 2--year: 1.83% same as last week (1.22% on Jan 3)
  • 5--year: 2.18% up from 2.15% last week (1.94% on Jan 3)
  • 10-year: 2.40% up from 2.36% last week (2.45% on Jan 3)
  • 30-year: 2.79% up from 2.73% last week (3.04% on Jan 3)

Fed funds futures' probabilities of future rate hikes by:

  • Dec 2017 - up by at least 25bps: 100% same as last week
  • Dec 2017 - up by at least 50bps: 12.4% up from 9.8% last week
  • Jun 2018 - up by at least 25bps: 100% same as last week
  • Jun 2018 - up by at least 50bps: 84.5% up from 83.4% last week
  • Jun 2018 - up by at least 75bps: 41.7% up from 38.7% last week

Savings and Money Market Account Rates

The above graph shows the rate trends of the average savings account rates. These average rates are based on all the rate data that we have collected over the years. This is an interactive graph. You can choose the look-back period (from 3 months to 5 years). As you can see in the graph, average savings account rates are rising slowly. They are still below the average from five years ago.

Rate hikes at internet banks have picked up in the last two weeks. The expected Fed rate hike may be having an impact.

We now have a new rate leader. Colorado Federal Savings Bank increased the rate of its new Premier Savings Account by 20 bps to 1.65% APY. This rate requires a minimum balance of $50k, and only new customers are eligible to open the account.

For a no-minimum savings account, DollarSavingsDirect and Salem Five Direct share the top spot with a 1.50% APY.

Live Oak Bank moved closer to these leaders at the start of December by raising its savings account rate 5 bps to 1.45% APY. It’s also a no-minimum savings account.

Last week Nationwide Bank increased the rate of its money market account by 10 bps to 1.40% APY for balances of at least $10k.

SFGI Direct increased the rate of its no-minimum savings account by 5 bps to 1.36% APY. If you’re looking for a top rate and an account that has a long history of being competitive, SFGI Direct’s savings account is a good choice.

Several of the big internet banks are holding their savings account rates at 1.30% APY. The latest big internet bank to reach this level is Discover Bank which increased its Online Savings Account rate from 1.20% to 1.30% APY.

Nationwide Bank’s money market account is now in my 1.40% club. This club includes banks and credit unions that offer nationally-available savings and money market accounts with non-promo rates of at least 1.40% APY. The count is now up to eight. The others in the club include Northpointe Bank’s Ultimate Money Market (1.50% APY), Incredible Bank’s savings account (1.55% APY), UFB Direct Money Market Savings (1.41% APY), DollarSavingsDirect Savings (1.50% APY), Live Oak Bank Savings (1.45% APY), Popular Direct Plus Savings (1.40% APY) and PurePoint Financial Online Savings (1.40% APY). I’m excluding Colorado Federal Savings Bank’s Premier Savings Account since only new customers are eligible. I’m also excluding the Mega Money Market accounts from All America Bank and Redneck Bank since these have $35k balance caps.

Reward Checking Accounts

There were again no changes to my list of nationally available reward checking accounts. Reward checking rates have been slower to respond to the Fed rate hikes as compared to internet savings account rates. Since much of the rates of reward checking accounts are paid for by debit card activity, banks may continue to go slow with rate hikes.

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, Overview of Reward Checking and Our Reward Checking Table.

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.

CD Deals: I just wanted to include this reminder of a few noteworthy CD deals that are available.

Navy Federal Credit Union has a special 32-month IRA CD with a 2.75% APY and a $250k maximum balance. There’s a special 15-month CD with a 2.25% APY and a $50k maximum balance. As is typical with recent Navy Fed special CDs, these allow add-on deposits. Please refer to this blog post for more details.

We keep seeing shorter-term CD rates reaching 2%. The latest internet bank to push the envelope is Popular Direct. It just started to offer an 18-month CD with a 2% APY. I’ll have more on this soon.

For mid-term CDs, the best deal continues to be at USALLIANCE Financial which has a special 35-month CD that earns 2.40% APY.

For long-term CDs, Mountain America Credit Union continues to hold the top spot with a 2.80% APY 5-year CD.

Rates as of December 12, 2017

Checking/Savings/Money Market Accounts:

  • Noteworthy Accounts Available Nationwide:
Colorado Federal Savings Bank1.65% ($50k+) Premier Savings (New customers) - Account review
Incredible Bank1.55% ($25k+), 1.21% ($2.5k), IncredibleBank Savings - Account review
DollarSavingsDirect1.50% (no min)Dollar Savings Account - Account review
Salem Five Direct1.50% eOne Savings, for new customers only Account review
Northpointe Bank1.50% ($25k-$1m, guaranteed for 1 year) Ultimate Money Market - Account review
All America Bank1.50% (up to $35k), 0.50% ($35k+)Mega Money Market Account - Account review
Redneck Bank1.50% (up to $35k), 0.50% ($35k+)Mega Money Market Account
Live Oak Bank1.45% ($5 million max) Savings Account - Account review
UFB Direct1.41% ($5k min)Money Market Savings - Account review
Popular Direct1.40%Popular Direct Plus Savings - Account review
Nationwide Bank1.40% ($10k+), 1.15% APY (up to $10k)Money Market - Account review
PurePoint Financial1.40% ($10k min)Online Savings - Account review
EBSB Direct1.39% ($50k+), 0.20% ($5k+)Money Market Direct - Account review
Self-Help Federal Credit Union1.37% ($500k), 1.27% ($500) Money Market - Account review
SFGI Direct1.36%Savings account - Account review
United Bank (MA)1.36% ($500k max, guaranteed for 6mo) Advantage Money Market, Not available in all states, Account review
CIT Bank1.35% (up to $250k), 1.30% ($250k+) Premier High Yield Savings - Account review
Signal Financial Credit Union1.35% ($25k, enrollment in Premium Bundle) Premium Money Market - Account review
EverBank1.31% (1yr intro rate) 1.01% ongoing rateYield Pledge Money Market - Account review
Synchrony Bank (formerly GE Capital Retail Bk) 1.30%High Yield Savings - Account review
Nationwide Bank1.30%Online Savings - Account review
Barclays1.30%Online Savings - Account review
GS Bank1.30%Online Savings Account - Account review
Sallie Mae Bank1.30%MMA - Account review
Discover Bank1.30% (no min) Online Savings - Account review
BankPurely1.30% ($1 min) SavingPurely - Account review
ableBanking1.30% ($250 min)Money Market Savings - Account review
Radius Bank1.30% ($2.5k min)Radius High-Yield Savings - Account review
Capital One1.30% ($10k+), 0.60% (up to $10k)360 Money Market
UFB Direct1.30% ($25k+), 0.20% ($100) Premium Savings - Account review
CIBC USA (formerly The Palladin PrivateBank)1.30% (6mo intro rate) 1.10% blended APYSavings Account - Account review
McGraw-Hill Federal Credit Union1.30% ($75k), 1.10% ($20k),1.00% ($5k) (guaranteed through 12/31/18)Ascend Account - Account review
Northern Bank Direct1.26% ($250k max) Money Market - Account review
Ally Bank1.25%Online Savings - Account review
American Express Bank1.25%High Yield Savings - Account review
Alliant Credit Union1.25% ($100 min)High-Rate Savings - Account review
Bethpage Federal Credit Union1.25% ($500 min)Money Market
BBVA Compass1.25% ($10k min)ClearChoice MMA Promo - Account review
Hanscom Federal Credit Union1.25% ($25k min)Higher Yield Savings
EverBank1.21% (1yr intro rate) 0.71% ongoing rateChecking - Account review
Dime Savings Bank1.20% Dime Direct Money Market, new money - Account review
Discover Bank1.20% ($100k min), 1.15% ($2.5k) MMA - Account review
Chevron Federal Credit Union1.20% ($250k+), 1.10% ($2.5k+) MarketEdge Savings
My e-BAnC by BAC Florida Bank1.15%Super Saver - Account review
FNBO Direct1.15%Online Savings
MyBankingDirect1.15% ($5k+), 0.25% (less than $5k) Earn >More Money Market
SmartyPig1.15% ($10k min), 1.05% (less than $10k)SmartyPig Savings - Account review
Nationwide Bank1.15% ($10k), 1.00% ($1)Nationwide Member Checking Account
Connexus Credit Union1.15% ($100k), 1.00% ($50k,) 0.75% ($20k)MMA - active chk required
Northpointe Bank1.12% Ultimate Savings - Account review
Northeast Bank1.10%Pearl Money Market Promo, new customers - Account review
Quorum Federal Credit Union1.10% HighQ Savings
iGObanking.com1.10% ($25k min) MMA, New accounts and new money only, Account review
TIAA Direct1.10%($100k), 1.01% ($1) Money MarketInternet bank
Pacific National Bank1.06% Money Market Deposit Account - Account review
AloStar Bank of Commerce1.05%Savings account - Account review
Bank of Internet USA1.05% Smart Money Market
Bank of Internet USA1.05% Smart Savings

Reward Checking Accounts:

  • Noteworthy Accounts Available Nationwide:
Consumers Credit Union4.59% (up to $20k) Rewards Checking - debit card and $1k credit card requirements
Consumers Credit Union3.59% (up to $15k)Rewards Checking - debit card and credit card requirements
One American Bank3.50% (up to $10k), 0.25% ($10k+)Kasasa Cash - Account review
Consumers Credit Union3.09% (up to $10k)Rewards Checking - debit card with NO credit card requirements
Evansville Teachers Federal Credit Union3.00% (up to $15k), 0.00% ($15k+)Vertical Dividend Checking - Account review
Lake Michigan Credit Union3.00% (up to $15k), 0.00% ($15k+)Max Checking
Signature Federal Credit Union3.00% (up to $15k), 0.10% ($15k+)Choice Checking
Great Lakes Credit Union3.00% (up to $10k), 0.10% ($10k+)Ultimate Checking
Partner Colorado Credit Union3.00% (up to $10k), 0.50% ($10k+)High Interest Checking
American Bank & Trust2.51% (up to $10k), 0.25% ($10k+)Kasasa Cash
Industrial Bank2.50% (up to $15k), 0.25% ($25k+)Kasasa Cash
Capital Educators Federal Credit Union2.50% (up to $10k), 0.20% ($10k+)High Yield Checking
New Buffalo Savings Bank2.27% (up to $15k), 0.2497% ($15k+)Kasasa Cash - Account review
Bellco Credit Union2.25% (up to $25k), 0.25% ($25k+)Boost Interest Checking - Account review
Main Street Bank2.25% (up to $25k), 0.25% ($25k+)Kasasa Cash - Account review
Altra Federal Credit Union2.25% (up to $15k), 0.50% ($15k+)A+ Checking
Coastal Credit Union2.25% (up to $10k), 0.10% ($10k+) Go Green Checking - Account review that includes companion Go Green MMA
Georgia Bank Company2.15% (up to $25k), 0.40% ($25k+)Kasasa Cash - Account review
TruStone Financial Credit Union2.02% (up to $20k), 0.10% ($20k+)TruRate Checking - Account review
BankFirst2.02% (up to $10k), 0.15% ($10k+)Kasasa Cash
Finex2.018% (up to $25k), 0.20% ($25k+)Axcess Rewards Checking, Premier Account (formerly First New England Federal Credit Union)
XCEL Federal Credit Union2.01% (up to $25k), 0.03% ($25k+)Kasasa Cash Checking
Bay State Savings Bank2.01% (up to $20k), 0.25% ($20k+)Kasasa Cash - Account review
Legence Bank2.01% (up to $10k), 0.25% ($10k+)Kasasa Cash
5Star Bank2.00% (up to $25k), 0.15% ($25k+)Kasasa Cash Checking Account review
Country Bank2.00% (up to $20k), 0.25% ($20k+)Kasasa Cash Checking Account review
Elements Financial2.00% (up to $20k), 0.10% ($20k+)High Interest Checking - Account review
MainStreet Bank2.00% (up to $15k), 0.25% ($15k+)Kasasa Cash - Account review
Blue Federal Credit Union2.00% (up to $15k), 0.25% ($15k+)Extreme Checking (up to 4% w/account relationships) - Account review
All America Bank2.00% (up to $10k), 0.50% ($10k+)Ultimate Rewards Checking
Redneck Bank2.00% (up to $10k), 0.50% ($10k+)Redneck Rewards Checking
United Educators Credit Union2.00% (up to $10k), 0.25% ($10k+)Kasasa Cash
KS StateBank1.95% (up to $25k), 0.50% ($25k+)Check PLUS - Account review
Campus Federal1.95% (up to $10k), 0.05% ($10k+)Lagniappe 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
MemoryBank1.50% (up to $250k) EarnMore Interest Checking - Account review
Superior Choice Credit Union1.50% (up to $30k)AMP Checking
Marine Federal Credit Union1.26% (up to $10k), 0.05% ($10k+)Kasasa Cash Checking
Bank of Internet USA1.25% (up to $150k), 0.00% ($150k+)Rewards Checking
Heritage Bank1.25% (up to $25k), 0.10% ($25k+)eCentive Account

Certificates of Deposit:

Bank Account Alternatives - NOT FDIC Insured

Duke Energy PremierNotes1.41% rate for $50K+Duke Energy PremierNotes review
Vanguard Prime Money Market Fund1.24% 7-day yield
Ally Financial Demand Notes1.15% rate for $50k+
Ford Interest Advantage1.15% rate for $50k+Ford Interest Advantage review
Fidelity Money Market Fund1.00% 7-day yield
Vanguard Tax-Exempt Money Market Fund0.89% 7-day yield
Fidelity Municipal Money Market Fund0.63% 7-day yield
Related Pages: savings accounts, money market accounts, checking accounts, reward checking accounts, nationwide deals, Internet banks
jimdog   |     |   Comment #1
The FED is financially raping prudent savers, the poor and the middle class.
Nothing   |     |   Comment #2
The Fed goes where the money is...it isn't with those you cite. Where the money goes is where the economy goes.
Bozo   |     |   Comment #3
ZIRP (now relegated to the dust-bin) was a boon to some, a bust to others. For example, folks who diversified (and had a modicum in the market) did reasonably well. Over the past year, Mr. Market was up roughly 20%, well above historical averages.

I suspect the key is diversification. Plopping all one's eggs in one basket is seldom a good idea. Being a "saver" does not equate to having one's savings in fixed-income. Fixed-income is part, but not all, of a prudent asset allocation.
deplorable 1
deplorable 1   |     |   Comment #4
@Bozo: ZIRP absolutely destroyed my income as I didn't have too much in the market before that when I could earn 6-7% in a decent MMA why would I? The reason why ZIRP plus the financial crisis was so devastating for me was that before that I was using the million in credit I have to earn 5-7% on the banks money as well as my own savings therefore doubling my interest(kind of like free leverage). Then not only did rates drop but the financial crisis caused credit card companies to start arbitrarily decreasing credit lines and closing accounts left and right. Then all the 0% no fee balance transfers disappeared at the same time. This was like a triple whammy to my income. I was on the path to becoming a multi millionaire when all this bs went down. It is only now starting to get a bit better but I was forced into the stock market to seek yield and still lost a decade of compound interest. On the plus side I'm getting pretty good at picking high yield dividend paying stocks now. As they say necessity is the mother of invention.