The Fed has begun its two-day FOMC meeting. The FOMC statement is scheduled to be released at 2:00pm EDT Wednesday. At this same time, the Fed is also scheduled to release its federal funds rate projections and its quarterly economic projections. Then at 2:30pm, Fed Chair Janet Yellen is scheduled to hold a press conference.
A Fed rate hike on Wednesday appears to be almost a sure thing. What’s less certain is the federal funds rate projections. Do most Fed members still anticipate three rate hikes in 2017? Also, do the projections indicate fewer anticipated rate hikes in 2018? Economist Tim Duy described his prediction about the Fed’s new projections in this Bloomberg article:
The bottom line is that the Fed will resist pulling back on rate projections if they can justify holding their inflation forecast and unemployment remains poised to decline further in the months ahead.
If the Fed does resist in pulling back on rate projections, that will be good news for savers. With at least one more Fed rate hike anticipated for this year after Wednesday and more to come in 2018, that should help push banks to raise deposit rates. The primary issue that could derail higher deposit rates is if the economy disappoints. As Tim Duy warned in his article:
If weak inflation remains persistent through the second half of this year, the Fed would then be forced to rethink their 2018 plans.
Both the federal funds futures and Treasury yields have been moving in the right direction over the last week. The federal funds futures now show a 99.6% chance of a rate hike on Wednesday. The chance of another rate hike in December went up a little from last week, rising to just above 50-50.
All Treasury yields went up from last week, with the largest increase seen on the 2-year and 5-year Treasury yields (up by 8 bps from last week).
- 1-month: 0.89% up from 0.83% last week (0.52% on Jan 3)
- 6-month: 1.12% up from 1.08% last week (0.65% on Jan 3)
- 2--year: 1.38% up from 1.30% last week (1.22% on Jan 3)
- 5--year: 1.79% up from 1.71% last week (1.94% on Jan 3)
- 10-year: 2.21% up from 2.14% last week (2.45% on Jan 3)
- 30-year: 2.87% up from 2.81% last week (3.04% on Jan 3)
Fed funds futures' probabilities of future rate hikes by:
- Jun 2017 - rate hike: 99.6% up from 95.8% last week
- Dec 2017 - at least one more rate hike: 52.2% up from 49.9% last week
- Dec 2017 - at least two more rate hikes: 10.4%
Savings and Checking Account Rates
We continue to see a few more rate hikes in my list of top nationally available savings and money market accounts.
In the last two weeks, three large internet banks increased their savings account rates. These include GS Bank (1.05% to 1.20% APY), Synchrony Bank (1.05% to 1.15% APY) and Discover Bank (1.01% to 1.10% APY). It seems likely that the expected Fed rate hike on Wednesday along with competition are contributing to these higher rates.
In addition to these large internet banks, Live Oak Bank introduced a new internet savings account that earns 1.25% APY on all balances up to $250k.
The highest rate isn’t from an internet bank. It’s the money market account from Self Help Federal Credit Union. Self Help increased the top-tier APY of the MMA from 1.36% to 1.41%. This requires a large balance of $500k. Its bottom-tier APY increased to 1.31%, and this requires only a $500 balance.
I not only include savings and money market accounts on this list, but also standard checking accounts. If a standard checking account has a top rate, there’s no reason to ignore it. Checking accounts offer more liquidity than savings accounts due to check writing privileges, and unlike savings and money market accounts, checking accounts aren’t limited to six withdrawals per statement period.
Due to this extra liquidity, the standard checking accounts typically have lower rates than savings and money market accounts. Sometimes, however, there are exceptions. The latest exception is the Nationwide Member Checking Account. In early May, the APY of this account increased from 0.50% to 1.00%, and then this week, Nationwide Bank increased the rate again. It’s now at 1.15% APY for balances of at least $10k. I’ll soon be publishing a review of this checking account.
With the addition of Live Oak Bank, my new 1.25% club has again 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 seven accounts in this club (ableBanking, Self-Help FCU, BankPurely, UFB Direct, PurePoint Financial, Dollar Savings Direct and Live Oak Bank). Just like the 1% club, I’m going to exclude accounts that have rates that are clearly promotional and temporary. These include savings accounts at Salem Five Direct and 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
We still aren’t seeing many rate increases on 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.
The only change to my list of nationally available reward checking accounts was the addition of the Kasasa Cash account from Security State Bank. The account earns 3% APY on balances up to $10k.
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.
INOVA Federal Credit Union just came out with a special 42-month CD that earns 2.30% APY. As an additional incentive, they’re offering a $75 gift card when you open this CD with a minimum deposit of $100k of new money.
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).
For those who prefer short-term CDs, Ally Bank just increased the rate of its 11-month No Penalty CD to 1.35% APY for minimum deposits of $25k. With this no-penalty feature, you can make this CD have any term that you want from 7 days to 11 months.Rates as of June 13, 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||1.41% ($500k), 1.31% ($500)||Money Market - Account review|
|DollarSavingsDirect||1.30% (no min)||Dollar Savings Account - Account review|
|BankPurely||1.30% ($1 min)||SavingPurely - Account review|
|ableBanking||1.30% ($250 min)||Money Market Savings - 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% (guaranteed through July 1, 2018)||eOne Savings, for new customers only Account review|
|Live Oak Bank||1.25% ($250k max)||Savings Account - 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|
|GS Bank||1.20%||Online Savings Account - Account review|
|Sallie Mae Bank||1.15%||MMA - Account review|
|Synchrony Bank (formerly GE Capital Retail Bk)||1.15%||High Yield Savings - Account review|
|CIT Bank||1.15%||Spring Savings - Account review|
|Popular Direct||1.15%||High Rise Savings - Account review|
|My e-BAnC by BAC Florida Bank||1.15%||Super Saver - Account review|
|MyBankingDirect||1.15% ($5k+), 0.25% (<$5k)||Earn >More Money Market|
|Nationwide Bank||1.15% ($10k), 1.00% ($1)||Nationwide Member Checking Account|
|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|
|Discover Bank||1.10% (no min)||Savings account - See 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|
|Alliant Credit Union||1.05% ($100 min)||Savings account - See review|
|AloStar Bank of Commerce||1.05%||Savings account - Account review|
|Barclays||1.05%||Online Savings - Account review|
|Discover Bank||1.01% ($100k min), 0.95% ($2.5k)||MMA - See review|
|Pacific National Bank||1.00%||Money Market Deposit Account - See review|
|iGObanking.com||1.00%||Savings account - Account review|
|MySavingsDirect||1.00%||MySavings 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|
|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|
|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)|
|Bank of Internet USA||0.75%||MMA|
|Capital One 360||0.75%||360 Savings account|
|Quorum Federal Credit Union||0.70%||HighQ Savings Account|
|Nationwide Bank||0.75% ($100k), 0.50% (up to $100k)||Money Market 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|
|Security State Bank||3.00% (up to $10k), 0.25% ($10k+)||Kasasa Cash - Account review|
|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||0.99% 7-day yield|
|Fidelity Money Market Fund||0.80% 7-day yield||reviews on Fatwallet|
|Vanguard Tax-Exempt Money Market Fund||0.65% 7-day yield|
|Fidelity Municipal Money Market Fund||0.48% 7-day yield|
Removed, Following Rate Drop
|California First National Bank||0.40%||Money Market Checking - Account review|
Post Publication Edits
6/15/2017: My e-BAnC by BAC Florida Bank Super Saver rate raised.
6/15/2017: MySavingsDirect MySavings Account rate raised.
6/16/2017: SallieMae Bank Money Market Account rate raised.