The odds of a June Fed rate hike went down a little from last week, but they’re still strong. Economist Tim Duy reviewed recent economic data and concluded in his Fed Watch blog post that “this all clears the way for the Fed to hike rates again in June.” This US News article echoed a similar review of the economy and summed it up by saying “Strong labor market and inflation data this week have primed June for higher interest rates.”
The picture after June is much more cloudy. There is speculation that the Fed has again been too optimistic in its Fed funds projections. Instead of the three rate hikes that most on the Fed expected for this year, we may end 2017 with only two hikes. According to this CNBC article:
The markets are no longer convinced the economy will be strong enough for the Federal Reserve to raise interest rates two more times this year.
U.S. economic data has missed the mark for weeks now, and even though April data is improved over March, it is still disappointing.
Economic news on Friday impacted both Treasury yields and Fed rate expectations. According to this MarketWatch article:
Treasury yields moved firmly lower on Friday for the biggest weekly decline in a month, after weak inflation data and lukewarm consumer spending lowered expectations for two more Fed rate increases this year.
That explains why most Treasury yields are down from last week. The 2-year and the 5-year are down the most (both down by 8 basis points).
It also explains the big drop in the implied probability of two additional rate hikes in 2017. The Fed fund futures are showing a 44% chance that there will be at least two rate hikes by the Fed’s December meeting. That’s down from 60% from last week.
- 1-month: 0.72% down from 0.74% last week
- 6-month: 1.04% same as last week
- 2--year: 1.29% down from 1.37% last week
- 5--year: 1.86% down from 1.94% last week
- 10-year: 2.33% down from 2.42% last week
- 30-year: 2.99% down from 3.04% last week
Fed funds futures' probabilities of future rate hikes by:
- Jun 2017 - at least one hike: 69.2% down from 87.7% last week
- Dec 2017 - at least one hike: 86.9% down from 95.8% last week
- Dec 2017 - at least two hikes: 44.1% down from 60.0% last week
Savings and Checking Account Rates
More internet banks have been raising their savings account rates in the last two weeks. The rate hikes aren’t big, but at least we’re seeing upward movement.
Two more savings accounts reached 1.30% APY. This is the highest rate from a nationally available savings account that doesn’t require a $500k balance (Self-Help FCU continues to offer 1.36% APY for balances of $500k+).
The first to reach the 1.30% APY is UFB Direct, a division of BofI Federal Bank. It started a new savings account, called Premium Savings, that earns 1.30% APY on balances of at least $50k.
The second to reach the 1.30% APY is DollarSavingsDirect (DSD), a division of Emigrant Bank. In April, the DSD savings account rate increased from 0.55% to 1.25%. Last week, the rate increased again to its current rate. Unlike UFB Direct, DollarSavingsDirect’s savings account has no minimum balance requirement to qualify for the 1.30% APY.
In addition to the above rate leaders, two of the large internet banks increased their rates. CIT Bank introduced a new savings account called Spring Savings that earns 1.15% APY on all balances. Barclays increased the APY of its online savings account from 1.00% to 1.05% APY. This also applies to all balances.
Lastly, New York-based M.Y. Safra Bank added a Direct Online Money Market account that earns 1.10% APY on balances between $5k and $500k, and the stated APY is guaranteed through December 31, 2017. A minimum $5k of new money is required to open the account and maintained to earn the stated APY.
With the recent rate increases, my new 1.25% club has added a member. This 1.25% club is the group of nationally available checking, savings and money market accounts that have rates of at least 1.25% APY. We now have five accounts in this club (Self-Help FCU, BankPurely, UFB Direct, PurePoint Financial and Dollar Savings Direct). Just like the 1% club, I’m going to exclude accounts that have rates that are clearly promotional and temporary. These include savings account at The Palladian PrivateBank and the Ascend Money Market account at McGraw-Hill FCU. I also exclude accounts that have small balance caps like Redneck Bank’s Mega Money Market account.
Reward Checking Accounts
There was only one change to the list of nationally available reward checking accounts . Northpointe Bank’s UltimateAccount was added. Previously, this account had been excluded since it had a balance cap of only $5k.The cap has been increased to $10k. With an APY of 5%, the UltimateAccount is now on top of the 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 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.
Hot CD Deals: I just wanted to include this reminder of a few hot CD deals that are available.
Connexus Credit Union continues to offer three CD specials (2% APY 3-year, 1.70% APY 2-year and 1.50% APY 1-year). You can join Connexus by first joining an association (see blog post).
The best 3-year CD deal continues to be at USALLIANCE Financial Credit Union which offers a 36-month CD special with a 2.20% APY. Minimum deposit is $500, and new money is required. There’s no stated maximum deposit, but the credit union is limiting the CD to one per member.
The best 4-year CD deal continues at Hanscom FCU which is offering a 4-year CD that earns 2.50% APY. The CD requires that the member have or open a Premier Checking account.
Ally Bank’s 5-year CD (2.25% APY for all balances) isn’t the 5-year rate leader, but its 5-year CD is very competitive when you factor in the mild early withdrawal penalty (150 days of interest).Rates as of May 16, 2017
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:
|Self-Help Federal Credit Union||1.36% ($500k), 1.26% ($500)||Money Market - Account review|
|DollarSavingsDirect||1.30% (no min)||Dollar Savings Account - Account review|
|BankPurely||1.30% ($1 min)||SavingPurely - Account review|
|UFB Direct||1.30% ($50k+), 0.20% ($100)||Premium Savings - Account review|
|The Palladian PrivateBank||1.30% (6mo intro rate) 1.10% blended APY||Savings Account - Account review|
|Salem Five Direct||1.25%||eOne Savings, for new customers only Account review|
|Redneck Bank||1.25% (up to $35k), 0.50% ($35k+)||Mega Money Market Account|
|PurePoint Financial||1.25% ($10k min)||Online Savings - Account review|
|McGraw-Hill Federal Credit Union||1.25% ($75k), 1.10% ($20k),1.00% ($5k) (guaranteed through 8/31/17)||Ascend Account - Account review|
|HSBC||1.25% ($100k relationship required)||Promo Premier Savings - Account review|
|Incredible Bank||1.21% ($2.5k), 0.05% ($250k+)||IncredibleBank Savings - Account review|
|CIT Bank||1.15%||Spring Savings - Account review|
|Popular Direct||1.15%||High Rise Savings - Account review|
|MyBankingDirect||1.15% ($5k+), 0.25% (<$5k)||Earn >More Money Market|
|Connexus Credit Union||1.15% ($100k), 1.00% ($50k,) 0.75% ($20k)||MMA - active chk required|
|Northpointe Bank||1.12% ($10k min, 12mo rate guarantee)||UltimateSavings - Account review|
|SmartyPig||1.12% ($50k min), 0.95% ($10k min)||Savings account - Account review|
|EverBank||1.11% (1yr intro rate) 0.61% ongoing rate||MMA/Checking - Account review|
|M.Y. Safra Bank||1.10%||Direct Online MMA - Account review|
|Northeast Bank||1.10%||Pearl Money Market Promo, new customers - Account review|
|Dime Savings Bank||1.10%||Dime Direct Money Market, new money - Account review|
|First Central Savings Bank||1.10% ($10k min)||E-Premier Money Market - Account review|
|iGObanking.com||1.10% ($25k min)||MMA, New accounts and new money only, Account review|
|SFGI Direct||1.06%||Savings account - Account review|
|Ally Bank||1.05%||Online Savings|
|Northern Bank Direct||1.05% ($250k max)||Money Market - See review|
|CIT Bank||1.05%||High Yield Savings - Account review|
|Alliant Credit Union||1.05% ($100 min)||Savings account - See review|
|AloStar Bank of Commerce||1.05%||Savings account - Account review|
|GS Bank||1.05%||Online savings account|
|Synchrony Bank (formerly GE Capital Retail Bk)||1.05%||High Yield Savings|
|Sallie Mae Bank||1.05%||MMA - Account review|
|Barclays||1.05%||Online Savings - Account review|
|Discover Bank||1.01% (no min)||Savings account - Account review|
|Pacific National Bank||1.00%||Money Market Deposit Account - See review|
|ableBanking||1.00% ($250 min)||Money Market Savings|
|iGObanking.com||1.00%||Savings account - Account review|
|Radius Bank||1.00% ($2.5k min)||Radius High-Yield Savings - Account review|
|Capital One 360||1.00% ($10k+), 0.60% (up to $10k)||360 Money Market - Account review|
|UFB Direct||1.00% ($25k min)||UFB Savings - Account review|
|American Express Bank||0.95%||Savings account - Account review|
|FNBO Direct||0.95%||Savings account|
|Incredible Bank||0.95% ($2.5k min)||MMA - Account review|
|Bank5 Connect||0.90% ($100 min)||Online savings account (not available for MA and RI residents)|
|Capital One 360||0.90% ($100k) 0.75% ($50k)||360 Checking|
|TIAA Direct||0.90% ($100k)||MMA|
|Discover Bank||0.90% ($100k min), 0.85% ($2.5k)||MMA - Account review|
|Clear Sky Accounts||0.90% ($250k max)||Savings account - Account review|
|Digital Credit Union||0.90% ($100k) 0.85% ($50k)||MMA|
|EBSB Direct||0.88% ($5k min)||High Yield Savings|
|Colorado Federal Savings Bank||0.85% ($2.5k min)||Savings account - Account review|
|Synchrony Bank (formerly GE Capital Retail Bk)||0.85%||MMA|
|Sallie Mae Bank||0.85%||Upromise GoalSaver Account|
|MySavingsDirect||0.85%||MySavings account - Account review|
|Amboy Direct||0.80% ($3k min/$100k max)||Personal eSavings|
|EH National Bank||0.79%||Personal Savings|
|Bank5 Connect||0.76% ($100 min)||Checking account (not available for MA and RI residents)|
|California First National Bank||0.75%||Money Market Checking - Account review|
|Bank of Internet USA||0.75%||MMA|
|Capital One 360||0.75%||360 Savings account|
|Quorum Federal Credit Union||0.70%||HighQ Savings Account|
|TIAA Direct||0.65%||High Yield Savings account|
|FNBO Direct||0.65%||Checking account|
|Alliant Credit Union||0.65%||Checking (req's elec. dep & e-stmts) Account review|
|MyCBB||0.60%||MyCBB Money Market - Account review|
|Incredible Bank||0.59% ($1k min)||Checking - Account review|
|Elements Financial (formerly Eli Lilly Credit Union)||0.55% ($10k min)||Helium Savings - Account review|
Reward Checking Accounts:
- Noteworthy Accounts Available Nationwide:
|Northpointe Bank||5.00% (up to $10k), 0.10% ($10k+)||UltimateAccount - Account review|
|Consumers Credit Union||4.59% (up to $20k)||Rewards Checking - debit card and $1k credit card requirements|
|Consumers Credit Union||3.59% (up to $15k)||Rewards Checking - debit card and credit card requirements|
|One American Bank||3.50% (up to $10k), 0.25% ($10k+)||Kasasa Cash - Account review|
|Consumers Credit Union||3.09% (up to $10k)||Rewards Checking - debit card with NO credit card requirements|
|Evansville Teachers Federal Credit Union||3.00% (up to $15k), 0.00% ($15k+)||Vertical Dividend Checking - Account review|
|Lake Michigan Credit Union||3.00% (up to $15k), 0.00% ($15k+)||Max Checking|
|Great Lakes Credit Union||3.00% (up to $10k), 0.10% ($10k+)||Ultimate Checking|
|Partner Colorado Credit Union||3.00% (up to $10k), 0.50% ($10k+)||High Interest Checking|
|American Bank & Trust||2.51% (up to $10k), 0.25% ($10k+)||Kasasa Cash|
|Industrial Bank||2.50% (up to $15k), 0.25% ($25k+)||Kasasa Cash|
|Capital Educators Federal Credit Union||2.50% (up to $10k), 0.20% ($10k+)||High Yield Checking|
|New Buffalo Savings Bank||2.27% (up to $35k), 0.2497% ($35k+)||Kasasa Cash - Account review|
|Bellco Credit Union||2.25% (up to $25k), 0.25% ($25k+)||Boost Interest Checking - Account review|
|Main Street Bank||2.25% (up to $25k), 0.25% ($25k+)||Kasasa Cash - Account review|
|Altra Federal Credit Union||2.25% (up to $15k), 0.50% ($15k+)||A+ Checking|
|Coastal Federal Credit Union||2.25% (up to $10k), 0.10% ($10k+)||Go Green Checking - Account review that includes companion Go Green MMA|
|Georgia Bank Company||2.15% (up to $25k), 0.40% ($25k+)||Kasasa Cash - Account review|
|TruStone Financial Credit Union||2.02% (up to $20k), 0.10% ($20k+)||TruRate Checking - Account review|
|BankFirst||2.02% (up to $10k), 0.15% ($10k+)||Kasasa Cash|
|Finex||2.018% (up to $25k), 0.20% ($25k+)||Axcess Rewards Checking, Premier Account (formerly First New England Federal Credit Union)|
|XCEL Federal Credit Union||2.01% (up to $25k), 0.03% ($25k+)||Kasasa Cash Checking|
|Legence Bank||2.01% (up to $10k), 0.25% ($10k+)||Kasasa Cash|
|5Star Bank||2.00% (up to $25k), 0.15% ($25k+)||Kasasa Cash Checking Account review|
|Bay State Savings Bank||2.01% (up to $20k), 0.25% ($20k+)||Kasasa Cash - Account review|
|Country Bank||2.00% (up to $20k), 0.25% ($20k+)||Kasasa Cash Checking Account review|
|Elements Financial||2.00% (up to $20k), 0.10% ($20k+)||High Interest Checking - Account review|
|MainStreet Bank||2.00% (up to $15k), 0.25% ($15k+)||Kasasa Cash - Account review|
|Blue Federal Credit Union||2.00% (up to $15k), 0.25% ($15k+)||Extreme Checking (up to 4% w/account relationships) - Account review|
|United Educators Credit Union||2.00% (up to $10k), 0.25% ($10k+)||Kasasa Cash|
|KS StateBank||1.95% (up to $25k), 0.50% ($25k+)||Check PLUS - Account review|
|Connexus Credit Union||1.75% (up to $25k), 0.25% ($25k+)||Xtraordinary Checking|
|First Tech Federal Credit Union||1.58% (up to $10k), 0.16% ($10k+)||Dividend Rewards Checking|
|MemoryBank||1.50% (up to $250k)||EarnMore Interest Checking - Account review|
|All America Bank||1.50% (up to $10k), 0.50% ($10k+)||Ultimate Rewards Checking|
|Heritage Bank||1.26% (up to $25k), 0.10% ($25k+)||eCentive Account|
|Bank of Internet USA||1.25% (up to $150k), 0.00% ($150k+)||Rewards Checking|
|ABCO Federal Credit Union||1.01% (up to $25k), 0.10% ($25k+)||Rewards Checking|
|Community Bank of Raymore||1.01% (up to $10k), 0.20% ($10k+)||Kasasa Cash|
|Community Bank of Pleasant Hill||1.01% (up to $10k), 0.20% ($10k+)||Kasasa Cash|
|First American Bank||1.00% (up to $15k), 0.13% ($15k+)||Everyday Rewards Checking|
|Bank of Blue Valley||1.00% (up to $10k), 0.10% ($10k+)||$1k/month debit card req (formerly Ultimate Checking)|
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
|Ally Financial Demand Notes||1.15% rate for $50k+|
|Duke Energy PremierNotes||1.15% rate for $50K+||Duke Energy PremierNotes review|
|Ford Interest Advantage||1.05% rate for $50k+||Ford Interest Advantage review|
|Vanguard Prime Money Market Fund||0.95% 7-day yield|
|Fidelity Money Market Fund||0.81% 7-day yield||reviews on Fatwallet|
|Vanguard Tax-Exempt Money Market Fund||0.69% 7-day yield|
|Fidelity Municipal Money Market Fund||0.56% 7-day yield|
Post Publication Edits
5/17/17: Salem Five Direct eOne Savings rate increased.
5/18/17: American Express Bank High Yield Savings rate increased.