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Best Bank Account Interest Rates - Summary for January 10, 2017

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Best Bank Account Interest Rates - Summary for January 10, 2017

Friday’s jobs report was considered to be solid, supporting the case for at least three Fed rate hikes in 2017. According to the Wall Street Journal:

The U.S. Labor Department’s December employment report should reassure Federal Reserve officials the job market finished 2016 on a solid footing, leaving them on track to gradually raise short-term interest rates this year.

Economist Tim Duy had this to say about the jobs report in his Fed Watch blog:

The labor market finished out the year on a solid note. Solid, not spectacular, and largely consistent with the Fed's expectations. Consequently, the final employment report for 2016 should not impact the Fed's median forecast for 75bp of rate hikes in 2017.

As we all know, the Fed and economists were too optimistic last year regarding rate hikes. At the start of 2016, four Fed rate hikes were expected. We only saw one hike in December.

For 2017, there are signs that predictions may be underestimating rate hikes. Tim Duy summed up the situation in his blog:

watch out for upside risks to the outlook; the economy gained some traction in the final months of 2016. It is reasonable to believe that traction will hold in 2017.

We should know soon if we’ll see multiple Fed rate hikes in 2017. The next Fed meeting with a press conference will be March 14-15. If the Fed chooses not to raise rates at that meeting, we’ll be lucky to get three rate hikes in 2017.

Last week the minutes from the Fed’s December meeting were released. According to this MarketWatch article, the minutes showed that the Fed wasn’t as hawkish as many had expected. That’s one factor why Treasury yields declined in the last week. All Treasury yields decreased from last week with the 10- and 30-year yield declining the most (7 basis points).

The chance of more Fed rate hikes in 2017 went down slightly from last week according to the Fed funds future contracts. By the June meeting, the futures are showing about a 65% chance that there’ll be at least one rate hike and an 18% chance that there’ll be at least two rate hikes. Those numbers are down from 70% and 22% last week. By December, the futures show about a 66% chance that they’ll be at least two rate hikes, down from 72% last week.

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

Treasury Yields:

  • 1-month: 0.51% down from 0.52% last week
  • 6-month: 0.60% down from 0.65% last week
  • 2--year: 1.19% down from 1.22% last week
  • 5--year: 1.89% down from 1.94% last week
  • 10-year: 2.38% down from 2.45% last week
  • 30-year: 2.97% down from 3.04% last week

Fed funds futures' probabilities of future rate hikes by:

  • Mar 2017 - at least one hike: 19.4% down from 24.4% last week
  • Mar 2017 - at least two hikes: 0.4% down from 0.9% last week
  • Jun 2017 - at least one hike: 64.9% down from 69.5% last week
  • June 2017 - at least two hikes: 18.3% down from 21.9% last week
  • Dec 2017 - at least one hike: 92.1% down from 94.0% last week
  • Dec 2017 - at least two hikes: 66.2% down from 71.8% last week

Savings & Checking Account Rates

I had hopes that after the holidays we would start to see some upward movements on savings and money market rates. That has not happened. There was only one change in the top nationally available savings and money market accounts listed below.

Self-Help Federal Credit Union increased the bottom tier of its money market account rate by 16 bps to 1.03% APY. The top tier is now 1.13% APY, but this requires a $500k minimum balance. For a one-time fee of $5, individuals can qualifying for Self-Help FCU membership by joining the Center for Community Self-Help.

With the change at Self-Help FCU, the number of accounts in the 1% club increases to 22. 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 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. There were no changes in the nationally available reward checking list.

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 & 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.

Hot CD Deal: I just wanted to include this reminder of Navy Federal’s special 17-month CD. Two things make this a hot deal: a 2.00% APY and an add-on feature that allows any number of additional deposits. The one caveat is that there’s a maximum balance of $50,000. If you’re not already a Navy Fed member, there’s a good chance you can join. Please refer to this blog post for more details.

Rates as of January 10, 2017

Checking/Savings/Money Market Accounts:

  • Noteworthy Accounts Available Nationwide:
InstitutionRatesNotes
The Palladian PrivateBank1.30% (6mo intro rate) 1.10% blended APYSavings Account - Account review
Redneck Bank1.25% (up to $35k), 0.50% ($35k+)Mega Money Market Account
State Bank of Texas1.25% ($100k min)Jumbo Money Market Deposit Account - Account review
Popular Direct1.15%High Rise Savings - Account review
Connexus Credit Union1.15% ($100k), 1.00% ($50k,) 0.75% ($20k)MMA - active chk required
Self-Help Federal Credit Union1.13% ($500k), 1.03% ($500) Money Market - Account review
Northpointe Bank1.12% ($10k min, 12 month rate guarantee)UltimateSavings - Account review
EverBank1.11% (1yr intro rate) 0.61% ongoing rateMMA/Checking - Account review
Incredible Bank1.11% ($2.5k), 0.05% ($250k+)IncredibleBank Savings - Account review
Northeast Bank1.10%Pearl Money Market Promo, new customers - Account review
Dime Savings Bank1.10% Dime Direct Money Market, new money - Account review
iGObanking.com1.10% ($25k min) MMA, New accounts and new money only, Account review
Salem Five Direct1.10% (rate guarantee through January 1, 2017)eOne Savings, for new customers only Account review
SFGI Direct1.06%Savings account - Account review
CIT Bank1.05%High Yield Savings - Account review
SmartyPig1.05% ($50k min), 0.85% ($2.5k min)Savings account - Account review
MyBankingDirect1.05% ($25k min), 0.75% ($5k min) Earn >More Money Market
McGraw-Hill Federal Credit Union1.05% (rate guarantee through 4/30/17)Holiday Money Market Promo - See review
AloStar Bank of Commerce1.05%Savings account - Account review
GS Bank1.05%Online savings account
Synchrony Bank (formerly GE Capital Retail Bk) 1.05%High Yield Savings
ableBanking1.00%Money Market Savings
iGObanking.com1.00%Savings account - Account review
Barclays1.00%Savings - Account review
Ally Bank1.00%Online Savings
Alliant Credit Union1.00% ($100 min)Savings account - Account review
California First National Bank1.00%Money Market Checking - Account review
Radius Bank1.00% ($2.5k min)Radius High-Yield Savings - Account review
Capital One 3601.00% ($10k+), 0.60% (up to $10k)360 Money Market - Account review
UFB Direct1.00% ($25k min)UFB Savings - Account review
FNBO Direct0.95%Savings account
Discover Bank0.95% ($500 min) Savings account - Account review
Incredible Bank0.95% ($2.5k min) MMA - Account review
Sallie Mae Bank0.90%MMA
Bank5 Connect0.90% ($100 min) Online savings account (not available for MA and RI residents)
Capital One 3600.90% ($100k) 0.75% ($50k)360 Checking
TIAA Direct0.90% ($100k)MMA
American Express Bank0.90%Savings account - Account review
Clear Sky Accounts0.90% ($250k max) Savings account - Account review
Ally Bank0.85%MMA
Colorado Federal Savings Bank0.85% ($2.5k min)Savings account - Account review
Synchrony Bank (formerly GE Capital Retail Bk)0.85%MMA
Sallie Mae Bank0.85%Upromise GoalSaver Account
MySavingsDirect0.85%MySavings account - Account review
Discover Bank0.85% ($100k min) 0.80% ($2.5k) MMA - Account review
Quorum Federal Credit Union0.80%HighQ Savings Account
Digital Credit Union0.80% ($100k) 0.65% ($50k)MMA
Bank5 Connect0.76% ($100 min) Checking account (not available for MA and RI residents)
Bank of Internet USA0.75%MMA
Capital One 3600.75%360 Savings account
TIAA Direct0.65%High Yield Savings account
FNBO Direct0.65%Checking account
Alliant Credit Union0.65%Checking (req's elec. dep & e-stmts) Account review
MyCBB0.60%MyCBB Money Market - Account review
Incredible Bank0.59% ($1k min) Checking - Account review
Elements Financial (formerly Eli Lilly Credit Union)0.55% ($10k min) Helium Savings - Account review
Nationwide Bank0.50% ($1k min) MMA
Citizens State Bank (FL)0.50% ($50k) 0.25% ($10k)Internet Savings

Reward Checking Accounts:

  • Noteworthy Accounts Available Nationwide:
InstitutionRatesNotes
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
Lake Michigan Credit Union3.00% (up to $15k), 0.00% ($15k+)Max Checking
Great Lakes Credit Union3.00% (up to $10k), 0.10% ($10k+)Ultimate Checking
American Bank & Trust2.51% (up to $10k), 0.25% ($10k+)Kasasa Cash
Mid-Illini Credit Union2.50% (up to $25k), 0.15% ($25k+)Cash Rewards High Interest Checking - Account review
Capital Educators Federal Credit Union2.50% (up to $10k), 0.20% ($10k+)High Yield Checking
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 Federal Credit Union2.25% (up to $10k), 0.10% ($10k+) Go Green Checking - Account review that includes companion Go Green MMA
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), 0.30% ($25k+)Kasasa Cash Checking
Legence Bank2.01% (up to $10k), 0.25% ($10k+)Kasasa Cash
Bay State Savings Bank2.01% (up to $20k), 0.25% ($20k+)Kasasa Cash - 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
KS StateBank1.95% (up to $25k), 0.50% ($25k+)Check PLUS - Account review
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
ABCO Federal Credit Union1.26% (up to $25k), 0.20% ($25k+)Premiere Checking
Aspire Federal Credit Union1.51% (up to $10k), 0.25% ($10k+)Kasasa Cash
All America Bank1.50% (up to $10k), 0.50% ($10k+)Ultimate Rewards Checking
Heritage Bank1.26% (up to $25k), 0.10% ($25k+)eCentive Account
Bank of Internet USA1.25% (up to $150k), 0.00% ($150k+)Rewards Checking
Avidia Bank1.06% (up to $25k), 0.05% ($25k+)eChecking
Community Bank of Raymore1.01% (up to $10k), 0.20% ($10k+)Kasasa Cash
Community Bank of Pleasant Hill1.01% (up to $10k), 0.20% ($10k+)Kasasa Cash
First American Bank1.00% (up to $15k), 0.13% ($15k+)Everyday Rewards Checking
Bank of Blue Valley1.00% (up to $10k), 0.10% ($10k+)$1k/month debit card req (formerly Ultimate Checking)

Certificates of Deposit:

Bank Account Alternatives - NOT FDIC Insured

InstitutionRatesNotes
Ally Financial Demand Notes1.15% rate for $50k+
Duke Energy PremierNotes1.05% rate for $50K+Duke Energy PremierNotes review
Ford Interest Advantage1.05% rate for $50k+Ford Interest Advantage review
Vanguard Prime Money Market Fund0.76% 7-day yield
Vanguard Tax-Exempt Money Market Fund0.58% 7-day yield
Fidelity Money Market Fund0.64% 7-day yieldreviews on Fatwallet
Fidelity Municipal Money Market Fund0.40% 7-day yield

Post Publication Edits

1/11/17: CIT Bank High Yield Savings rate raised.

Comments
Anonymous
Anonymous   |     |   Comment #1
This year will probably be the same as the last two years. A lot of talk about rate hikes all year long, but only one tiny rate hike at the end of the year. The FED continuing their strategy of obfuscation.
Bozo
Bozo   |     |   Comment #2
I gave up trying to predict FED rate changes (up or down) years ago, The FED will do what the FED will do, and I will maximize my fixed-income yields thanks to Ken Tumin's blog. Thanks to a laddered strategy in my IRA CDs (again, thanks to a suggestion from Ken many years back), I just roll with the flow. With RMDs on tap for this year, it's not so much "growing" as "preserving", achieving a real return above inflation in fixed-income. In a rising-rate environment, bond funds might be problematic. IRA CD ladders, less so.
Anonymous
Anonymous   |     |   Comment #3
Luv the redundant kudos! Needed?
Bozo
Bozo   |     |   Comment #7
To: Anonymous (Comment #3). I guess I did overuse. I promise to do better.
Anonymous
Anonymous   |     |   Comment #4
Well Bozo, I take the same position as you. Started laddering my CDs many years ago, just rolling with the Fed's flow, and taking my fist RMD this year. Since retiring and at this point in my life, preservation of capital is more important than accumulating more.
Anonymous
Anonymous   |     |   Comment #5
Bozo - welcome to the RMD years. In addition to achieving a return greater than the inflation rate in your IRA, there is also the problem of achieving a rate of return greater than the annual RMD rate. Otherwise, the value of the IRA will diminish each year, and that can surely be bothersome. I realize that an IRA, in theory, is intended, taxwise, to reduce to zero on doomsday, but to see it actually diminish from year to year can be a fairly demoralizing situation to a 'saver'.
Anonymous
Anonymous   |     |   Comment #6
I don't think it's so demoralizing. Yes the RMDs must be withdrawn and taxes paid, but the net money does not have to be spent. If not needed, that money can be put into ordinary taxable savings/CD accounts. What is really demoralizing it the amount of taxes taken and seeing all the money that is wasted by our politicians in Washington.
Anonymous
Anonymous   |     |   Comment #8
I gave your post a vote but be thankful you can pay taxes. It's estimated that 45% don't pay federal taxes which simply means they don't make very much.
Anonymous
Anonymous   |     |   Comment #12
So I should feel guilty? I thankful I worked hard all my life starting with after school jobs and ending with my retirement much later in life. I earned what I accumulated over the years. What are the reasons why that 45% don't make enough to pay federal taxes? Some, I am sure is because of circumstances beyond their control and others, well.................... This blog site isn't a popularity contest. I'm not looking for votes. I just state my experiences and/or what I think about the subject matter.
Anonymous
Anonymous   |     |   Comment #13
Some of us plan to pay very minimal taxes, if any, and have no debt and live within their means...kudos to everyone who likes taxes/debt!
Bozo
Bozo   |     |   Comment #9
To: Anonymous (Comment #5). It could be demoralizing if all one's eggs were in the IRA CD basket. Ours are not. The nice thing about RMDs is that you can tap any IRA (or combination of IRAs) to satisfy the RMD. I have chosen the "low-hanging-fruit" option. Each year, I will tap the IRA CD which offers the lowest yield, letting the others click along. If my math is correct, we won't need to tap other IRAs (e.g., balanced funds at Vanguard) until 15 - 20 years from now, should we live that long.

Mindful of behavioral tendencies as one ages, I wanted to establish a firewall between my equity and bond portfolio and my RMD withdrawals.  My Mom (who lived to 98 1/2) was a good coach. She never really worried about her stocks and bonds, as she had enough in Social Security and the interest on her CDs to pay the bills.
Anonymous
Anonymous   |     |   Comment #11
Use QCDs for satisfying rmd and target the tax rate I want! Kinda cool!
decades
decades   |     |   Comment #14
Bozo..I am 60 ..very risk averse ..how much % of total investments should I have in equity's ?
Bozo
Bozo   |     |   Comment #15
Decades, I've read so many articles on asset allocation for risk averse persons, it's hard to generalize. Always a personal decision, a prudent AA is what lets you sleep well at night. Wm. Bernstein once famously said "once you've won the game, why keep playing?". He argued, quite persuasively, that 100% fixed-income (if ample for retirement) was reasonable. Others take the position that even a very risk averse investor should always keep a "floor" of 25% investable assets in equities, to hedge inflation risk. Jack Bogle once suggested "age-in-fixed income" (not sure he still does), which would mean 40% in equities for a 60-year-old. Target retirement funds offered by Vanguard, as an example, tend to have higher percentages in equities than the "100 minus your age" formula.
decades
decades   |     |   Comment #17
thanks for your response...I like the idea of being like your mother ..living off cd's and social security and not sweating about a large stock portfolio...right now I could do that but if I live a long time inflation could take its toll on a portfolio like that ..I look at my parents ..both 90...really hurt by a too conservative approach
Anonymous
Anonymous   |     |   Comment #16
There is no percentage and the type(s) of equities chosen is vital to any discussion. Do you need investments to live or are they excess capital destined for heirs? If you lost 50% of your equity value how would you feel? When did you purchase your equities...at the top or the bottom or the middle? What's your personal life expectancy based on family and personal history? Perhaps the most important question is what choice(s) will allow you to sleep at night and spend the rest of your days on earth in relative peace.
decades
decades   |     |   Comment #18
I will need investments and social security to live off of ...a 50% hit would devastate me ..when did I purchase? ahhh not much yet am about 2% in stocks ..soon ..may cost average in ...I may be around for awhile , parents still living in their home ..but they require a lot of help from relatives ..I don't want to end up like that. They basically had no plan...bought an annuity ..panicked and sold early paying surrender charges...some broker sold them preferred stocks all financial sector and we know what happened there. They get ****ed constantly by hometown banks that pay no interest and were at one time paying 7% in annual fees....much to ponder
Anonymous
Anonymous   |     |   Comment #20
Forget cost averaging and all the other things you've been "told" about investing. Please don't take this as an insult but, if you aren't absolutely knowledgeable about what investing is and isn't, you will probably get burned. I know, the guy next door made a fortune on widgetdotcom and so did the guy at work who says they have a million in the bank. The current market is overpriced and buying now could end up in disaster, especially when you have little or no time to "recover" losses. Remember, if you lose 50% of your investments you'll need a 100% increase to recover. Take a dollar, lose 50 cents and tell me what you need to do to get back to a dollar. Yep, you need to double (100% increase) the 50 cents! And you have to do this over a period of time when inflation is eating away at your dollar's consumer market value. My advice is to start with creating a painstakingly detailed budget to discover what you need and what you spend, now and in the projected future. Then you can seek advice on how to generate steady, reliable income.
#21 - This comment has been removed for violating our comment policy.
Bozo
Bozo   |     |   Comment #22
To: Anonymous (Comment #20). I suspect most agree that the earlier one starts to invest, the better. That said, "catch-up" contributions in 401Ks (up to $24,000/year, last I checked) can help, if the budget permits. Index funds take a lot of the guesswork out of the equation. As to losing 50% or so in a market swoon, well, it's not theoretical. We saw it back in 2008. Folks who bailed at the bottom got hosed.* You need to have the time to recover. Having a conservative AA (see above) makes it easier to ride out the market roller coaster when times get troubling. As for steady, reliable, and government-guaranteed income, Social Security and FDIC/NCUA-insured CDs can't be beat. Ken Tumin posted on the Forum today an article noting the potential hazards of muni bonds.

*Behavioral economists have noted the "buy high/sell low" phenomenon for ever so long. Folks get (understandably) nervous and jerky when they see their account balances dip precipitously, and bail at absolutely the wrong time. Then, trying to catch up, they pile back in when the market is on a rampage, only to get hosed again.
Anonymous
Anonymous   |     |   Comment #19
Anonymous #16 nailed it! Investing in stocks and bonds isn't for everybody, especially in their retirement years.
#10 - This comment has been removed for violating our comment policy.
Anonymous
Anonymous   |     |   Comment #23
Trump’s comments on the dollar over the weekend sent the currency sharply lower. He told The Wall Street Journal in an interview that published Friday the U.S. currency was “too strong” because China was keeping its own yuan weaker. “Our companies can’t compete with them now because our currency is too strong, and it’s killing us,” the president-elect said in the interview. The dollar, which appreciated about 5% in the fourth quarter of 2016, has been drifting sideways since the start of the year. A reversal in bond yields also points to worries among investors. The 10-year Treasury prices have been rising over the past few weeks, with the yield dropping to 2.3%, its lowest level in seven weeks. Investors are taking Trump’s comments as a sign that he may not be as open to a series of interest rate hikes and a stronger dollar as had been initially projected, said Colin Cieszynski, chief market strategist at CMC Markets. http://www.marketwatch.com/story/wall-street-stocks-set-for-a-lower-open-with-investors-rattled-by-trump-brexit-2017-01-17
Bozo
Bozo   |     |   Comment #24
Trump is not exactly an economist. In the run-up to the election, he excoriated Janet Yellen for keeping interest rates too low. Like the dog which caught the bus, he now has higher interest rates, and a higher dollar, and doesn't know what to do. So he wants a weaker dollar? Seriously?

Eventually, the market will cease to pay attention to his tweets, his interviews, and his blusterings, and go about business as usual.

The Republic will survive.