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About Ken Tumin

Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.


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Bank Deals Blog: Fed / Banking News

Federal Reserve, the Economy and CD Rate Forecast - June 30, 2020
Federal Reserve, the Economy and CD Rate Forecast - June 30, 2020

Note regarding the CD rates summary: Since today is the last day of the month, the CD rates summary will be delayed until Thursday. There will likely be many banks and credit unions that will be updating their CD rates as July begins. Delaying the CD rates summary until Thursday will allow the capturing of these new rates for the summary.

The second quarter comes to an end today, and the stock market had one of its best quarters in history. Unfortunately, deposit account rates had one of its worst quarters...

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Federal Reserve, the Economy and CD Rate Forecast - June 23, 2020
Federal Reserve, the Economy and CD Rate Forecast - June 23, 2020

Last week during the Semiannual Monetary Policy Report to the Congress, Fed Chair Jerome Powell warned Congress about the risks ahead in the economic recovery. Below are excerpts from his opening remarks:

This suggests that a slow recovery will make it more difficult for a rebound. The second half of this year will be important. If we don’t see signs of a strong recovery and instead see an increasing number of business closures, that will point to a long recession that will prevent the Fed from hiking rates for multiple years.

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Federal Reserve, the Economy and CD Rate Forecast - June 16, 2020
Federal Reserve, the Economy and CD Rate Forecast - June 16, 2020

Last week’s Fed meeting and the Summary of Economic Projections (SEP) provided a grim outlook for savers. The SEP included federal funds rate projections by the FOMC members. All 17 FOMC members see no rate hikes through 2021, and 15 of the 17 see no rate hikes through 2022. An important factor that’s driving these projections is the unemployment rate. The spike in unemployment from COVID-19 is unprecedented, and the Fed isn’t forecasting a pre-COVID unemployment rate anytime soon. According to the SEP forecasts, the unemployment rate is expected to...

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Federal Reserve, the Economy and CD Rate Forecast - June 9, 2020
Federal Reserve, the Economy and CD Rate Forecast - June 9, 2020

The two-day FOMC meeting began today. The FOMC statement and the Summary of Economic Projections (SEP) are scheduled to be released at 2:00pm EDT on Wednesday. The Fed Chair Jerome Powell is then scheduled to hold a press briefing starting at 2:30pm. This should be an uneventful meeting with no policy changes expected to be announced. However, the SEP should be interesting. The SEP will provide the Fed’s first economic and fed funds rate forecasts for the year.

There is market pressure for the Fed to do more such as...

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Federal Reserve, the Economy and CD Rate Forecast - June 2, 2020
Federal Reserve, the Economy and CD Rate Forecast - June 2, 2020

It’s hard to be optimistic about the economic recovery when mass rioting, looting and property destruction takes place as progress was finally being made in reopening businesses closed from the COVID-19 pandemic. It’s too early to know how long lasting the effects of the riots will be on the economy, but it’s definitely another headwind that will only slow the economic recovery and the normalizing of interest rates.

Next week the two-day FOMC meeting will take place, and it should be the first FOMC meeting this year to include an update...

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Personal Savings Rate Spikes in April - Effect on Deposit Rates
Personal Savings Rate Spikes in April - Effect on Deposit Rates

The U.S. Bureau of Economic Analysis (BEA) released its monthly Personal Income and Outlays report this morning. What is particularly noteworthy is the massive surge in the personal savings rate. This is a measure of how much Americans are saving, and the rate has surged to an all-time record high of 33.0% in April. The personal savings rate had a large increase in March, rising from 8.2% in February to 12.7%, but the April increase is unprecedented.

History of the personal savings rate

You can see the history of the personal savings...

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Federal Reserve, the Economy and CD Rate Forecast - May 26, 2020
Federal Reserve, the Economy and CD Rate Forecast - May 26, 2020

Two weeks from now the next two-day FOMC meeting is scheduled to start. This will be the first meeting this year that should include an update to the Summary of Economic Projections (SEP). This had been planned for the March meeting, but after two emergency meetings, the Fed decided to skip the SEP update since the pandemic had caused too many future uncertainties for the SEP to be useful.

If the SEP update is provided at the June meeting, it should be very interesting. It will show the FOMC member projections...

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Online Bank CD Rates Falling to All-Time Lows
Online Bank CD Rates Falling to All-Time Lows

The Fed’s zero interest rate policy (ZIRP) is just over two months old, and already we’re seeing online banks cutting their CD rates to all-time lows. This doesn’t bode well for future deposit rates, especially if the economy takes a long time to recover from the COVID-19 pandemic. I’ve reviewed the rate history of three online banks that have recently cut their 5-year CD rates to all-time lows. The disturbing thing to note is that the previous lows didn’t occur until several years into the last ZIRP period, which lasted...

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Federal Reserve, the Economy and CD Rate Forecast - May 19, 2020
Federal Reserve, the Economy and CD Rate Forecast - May 19, 2020

On Sunday, 60 Minutes aired an interview with Fed Chair Jerome Powell that took place last Wednesday. Overall, the Fed Chair remained optimistic for the medium and long run view of the economy. As he said in the interview, there remains a lot of uncertainty in the short run:

A lot of the uncertainty comes from how American’s confidence will evolve. If people don’t feel safe and don’t participate in the economy like they used to, major parts of the economy will suffer (such as travel, concerts, sporting events, etc.) This...

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5-Year CD Rates Fall Below Savings Account Rates at Many Online Banks
5-Year CD Rates Fall Below Savings Account Rates at Many Online Banks

As online banks cut their deposit rates, an interesting phenomenon has occurred. Many online banks now have higher interest rates on their savings accounts than their 5-year CD rates. We typically expect long-term CDs to offer the highest rates since you’re locking in your money for the longest period of time. That’s not the case today as banks transition their deposit rates in this new zero interest rate environment.

Here’s a snapshot of the rates at a few online banks with these inverted rates. APYs are accurate as of 5/18/2020:

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