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Best Bank Account Interest Rates - Summary for February 21, 2017


Best Bank Account Interest Rates - Summary for February 21, 2017

Economic data released in the last week has slightly raised the chance of a Fed rate hike in March. Last Wednesday, the Labor Department released the Consumer Price Index for January. The CPI increased 0.6% last month which was much higher than the expected 0.3% increase. The core CPI increase also exceeded expectations (0.3% vs 0.2%). The retail sales report was also released last Wednesday, and the report showed that sales increased more than expected in January. This gives the Fed some justification to raise rates at its next FOMC meeting on March 14-15.

In addition to the economic data, Fed Chair Janet Yellen sounded a little more hawkish than expected at last week’s Senate meeting which suggested that the Fed may seriously consider a rate hike at its March meeting.

A few more clues about the March meeting may come on Wednesday when the Fed releases the minutes from the last FOMC meeting.

The chance of a March rate may be increasing, but it’s still rather low. According to the Fed funds futures contracts, the implied probability of at least one quarter-percent rate hike in March increased from 17.7% last week to 22.1% today.

Most all Treasury yields declined from last week with the 5-year falling the most (5 bps).

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

Treasury Yields:

  • 1-month: 0.49% down from 0.51% last week
  • 6-month: 0.69% up from 0.66% last week
  • 2--year: 1.22% down from 1.25% last week
  • 5--year: 1.93% down from 1.98% last week
  • 10-year: 2.43% down from 2.47% last week
  • 30-year: 3.04% down from 3.07% last week

Fed funds futures' probabilities of future rate hikes by:

  • Mar 2017 - at least one hike: 22.1% up from 17.7% last week
  • Mar 2017 - at least two hikes: 0.0% same as last week
  • Jun 2017 - at least one hike: 74.8% up from 68.0% last week
  • Jun 2017 - at least two hikes: 28.5% up from 21.4% last week
  • Dec 2017 - at least one hike: 95.8% up from 94.7% last week
  • Dec 2017 - at least two hikes: 77.1% up from 73.0% last week

Savings & Checking Account Rates

Savings and money market rates continue to be disappointing. I had hopes we would see more upward movements after the December Fed rate hike. In the last two weeks, there were just two changes to the top nationally available savings and money market accounts listed below, and one of those changes was a rate cut.

The one positive change was the addition of the Money Market Deposit Account at Pacific National Bank. The bank recently increased the APY of this money market account from 1.00% to 1.06%. This account can be opened online by people from any state, and its minimum balance is only $100.

The one rate cut was at California First National Bank which lowered its money market checking account rate from 1% to 0.75%.

For the 1% club, the rate cut at California First National Bank offsets the addition of Pacific National Bank. Thus, the number of accounts in the 1% club remains at 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 just two changes in the nationally available reward checking list.

The first change was a rate increase at Avidia Bank. The APY of its reward checking account, called eChecking, increased from 1.06% to 1.41% for balances up to $25,000.

The other change was the addition of Westfield Bank’s Dream Big Checking. This reward checking account earns 1.66% APY for balances up to $15k. Westfield is based in Ohio, but it’s currently allowing people in any state to open this account online. Another perk with this account is a $100 new-account bonus (see blog post). Update 2/22: Westfield Bank has changed their policy. They are now only accepting applications from Ohio residents.

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 Deals: I just wanted to include this reminder of three hot CD deals that are still available:

The first is 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.

The second hot CD deal is at Andrews FCU. It’s offering a 7-year CD with a 3.00% APY. What makes this deal hot is its mild early withdrawal penalty of only 6 months’ interest. I have more details in this blog post.

The third hot CD deal is at Mountain America Credit Union which is offering a 5-year CD (2.75% APY) with a one-time bump option (see blog post).

Rates as of February 21, 2017

Checking/Savings/Money Market Accounts:

  • Noteworthy Accounts Available Nationwide:
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
Popular Direct1.15%High Rise Savings - Account review
MyBankingDirect1.15% ($25k min), 0.75% ($5k min) Earn >More Money Market
Connexus Credit Union1.15% ($100k), 1.00% ($50k,) 0.75% ($20k)MMA - active chk required
Self-Help Federal Credit Union1.14% ($500k), 1.04% ($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%eOne Savings, for new customers only Account review
SFGI Direct1.06%Savings account - Account review
Pacific National Bank1.06% Money Market Deposit Account - See review
McGraw-Hill Federal Credit Union1.05% (rate guarantee through 4/30/17)Holiday Money Market Promo - See review
CIT Bank1.05%High Yield Savings - Account review
SmartyPig1.05% ($50k min), 0.85% ($2.5k min)Savings account - Account 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
Sallie Mae Bank1.05%MMA - Account review
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
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
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
Digital Credit Union0.80% ($100k) 0.65% ($50k)MMA
Bank5 Connect0.76% ($100 min) Checking account (not available for MA and RI residents)
California First National Bank0.75%Money Market Checking - Account review
Bank of Internet USA0.75%MMA
Capital One 3600.75%360 Savings account
Quorum Federal Credit Union0.70%HighQ 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:
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
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
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
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
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
MemoryBank1.50% (up to $250k) EarnMore Interest Checking - Account review
All America Bank1.50% (up to $10k), 0.50% ($10k+)Ultimate Rewards Checking
ABCO Federal Credit Union1.26% (up to $25k), 0.20% ($25k+)Premiere 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
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

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 Fund0.79% 7-day yield
Vanguard Tax-Exempt Money Market Fund0.55% 7-day yield
Fidelity Money Market Fund0.69% 7-day yieldreviews on Fatwallet
Fidelity Municipal Money Market Fund0.37% 7-day yield

Post Publication Edits

2/22/17: Westfield Bank Dream Big Checking removed; now only available to Ohio residents.

2/23/17: Quorum Federal Credit Union HighQ Savings Account lowered.

2/24/17: Avidia Bank eChecking removed; now only available to Massachusetts residents.

Alcoholics_Anon   |     |   Comment #1
The trailing 12 month inflation rate is currently 2.5%. That means that the only 5 year CD out there that is beating "rear view mirror" inflation is MACU  at 2.75%.

Back in July, the trailing 12 month inflation rate was a whopping 1.0%. That was so low, you could match inflation with a good savings account.

A year ago, the trailing 12 month inflation rate was a muted 1.4%. Practically, any 5 year CD could beat that number.

In fact, that 1.4% inflation rate represents the average inflation rate since the 2008 crash.

During the last eight years, it wasn't hard to beat that with a good 5 year CD. Although by less than 1%.

The average inflation rate for the 8 years before the crash was 2.8%. During that period of time a 5 year CD easily beat inflation by well over 1%.

Back in the good old days, the inflation rate was declining at a faster pace than interest rates were.

Now it looks like we're in a period of the inflation rate rising at a faster pace than interest rates are.

That's going to wreak havoc on the old tried and true 5 year CD ladder. The only way I see around the situation is to augment it with a 5 year TIPS ladder.

As long as you purchase TIPS at or below par, you're going to break even with inflation as measured by the "headline" inflation rate measure by the CPI-U.

Even if there was deflation for the whole 5 year term, you're guaranteed to receive par value for the bond at maturity (plus paltry amounts of interest every 6 months). 

If inflation remains were it is now for the full term of a 5 year CD purchased today, the only one out there that won't lose purchasing power is that lonely MACU CD.

If inflation continues to rise faster than interest rates, a 5 year CD ladder is going to be a loser for the first time that I can remember.

Unfortunately, 5 year TIPS currently have a negative yield to maturity on the secondary market.

Right now the YTM is -0.2%. So, unless that turns around soon, they're also guaranteed losers.

Hopefully, that YTM will go positive at the next 5 year TIPS auction in April.   
Stewie   |     |   Comment #2
That is an excellent and sobering analysis of interest rates vs. inflation rates.
LuvCD   |     |   Comment #3
Is GE credit union still offering the 2.75 rate...and a way to join is...?
Bozo   |     |   Comment #5
Jimbeau, your assessment of the future is so grim. Whenever I get in a sour mood, I just pull up old movies from the 50's.
ForWhomTheBellTolls   |     |   Comment #9
You'd prefer discussing the life expectancy of someone's who's 3 score and 10? No THAT's depressing.
???   |     |   Comment #4
type ge in search
gregk   |     |   Comment #6
The problem with TIPS is the investment limit. If you can only buy $10,000 per year (or whatever it is) that renders AA's elaborate analysis kind of besides the point. Fine for small-ballers I suppose, but for those with significant assets to invest not worth bothering with.
!!!   |     |   Comment #7
My sentiments as well. And too many "if"s to be taken seriously.
TheHumanCalculator   |     |   Comment #10
"If's" are the basis of computer logic.
Anony   |     |   Comment #13
Sequence, Decision and Iteration.
DCGuy   |     |   Comment #18
The NAND gate is the basis for many electronic circuits. Just using NAND gates alone you can create a complete processor.
TrumptyDumpty   |     |   Comment #8
iBonds have the 10K limit per person per year. You can purchase up to 5M in TIPS per auction. Will that work for you?
LuvCD   |     |   Comment #11
Plus tax refunds to $5k for i bonds
Trumpwon   |     |   Comment #12
No, it won't work for me.
TrumpWonWeLose   |     |   Comment #14
Trump winning?
???   |     |   Comment #15
^^ Who let the dogs out ?
James Barnes
James Barnes   |     |   Comment #16
What are the most likely scenarios for inflation in the next 1 - 5 years?
Trumpwon   |     |   Comment #17
Your guess is as good as anybody's.
Anony   |     |   Comment #19
Reported inflation will probably be 2-3%. Your personal inflation will depend on your lifestyle. The idea that the "inflation rate" affects everyone in the same manner is simply a myth. As many retirees know one can adjust spending and purchasing habits to offset inflation. If you're on the brink of just making it each month you have very little wiggle room and inflation can and often is devastating. If you're pondering CD rates you probably have the necessary wiggle room to improvise solutions, adapt to and overcome the effects of inflation. If not, well, you didn't plan very well.
LuvCD   |     |   Comment #20
You are toast or should be still working!