DepositAccounts.com May 2017 Rate Trends

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DepositAccounts.com May 2017 Rate Trends

Over the last several years we have been issuing monthly press releases. These are intended to provide a summary of average deposit account rates and how they have changed in the last month. We thought these press releases would be of interest to readers now that we are finally seeing some upward movement on rates.The May press release is below.

Please note that I will continue to post my weekly rate surveys without any changes.

Higher Savings Account Rates: Sneaky Ways Banks Aren’t Making It Easy For Consumers

Instead of raising rates on existing savings accounts, many banks are creating new savings accounts with top rates. Banks hope that the new higher-rate accounts will attract new customers while many of their existing customers won't notice these new accounts or won't take the time to move their money. Two banks with top savings account rates are examples of this practice.

The first example is BankPurely, a new internet bank from Flushing Bank of Uniondale, New York. BankPurely introduced the SavingPurely savings account that earns 1.30% APY on all balances. This is 30 basis points higher than the savings account rate at Flushing Bank’s other internet bank, iGObanking.com, which has been in operation for more than ten years.

The second example is UFB Direct, an internet bank from Bofi Federal Bank of San Diego, California. UFB Direct recently launched the UFB Premium Savings Account that earns 1.30% APY on balances of $50,000 and above. Another savings account that UFB Direct offers is called UFB Savings, and that earns 1.00% APY on balances of $25,000 and above. The UFB Savings account has been offered by UFB Direct since 2011.

In addition to these two rate leaders, other internet banks have decided to offer higher rates on new savings accounts instead of on their existing savings accounts. Here are five tips for consumers to ensure they don't get left behind by their banks:

  1. Don't assume your savings account will remain a rate leader.
  2. Regularly compare the interest rate of your account to other accounts at your same bank and at other banks and credit unions that offer top rates
  3. If you do find a higher-rate account at either your bank or at another bank, ask your bank to match that rate on your existing account.
  4. If your bank won't match the rate and you have to apply for a new account to receive the higher rate, make sure you understand the account requirements before applying. Existing customers may not be eligible or it may require new money.
  5. If a higher-rate account is found at your bank or at another bank or credit union, take the time to open the account and move your money.

DepositAccounts.com Monthly Rate Survey and Commentary

The effects of the recent Fed rate hikes on deposit rates were more apparent in the last month than in any previous month since the first Fed rate hike on December 2015. Across a nationwide survey of more than 275,000 rates at 7,500 banks and credit unions, average yields on five categories of consumer savings products increased. The 1-year CD rates had the largest increase out of the five categories, with the average annual percentage yield (APY) increasing by 2.6% from 0.529% in April to 0.543% in May.

Savings

The average savings account APY increased by 1.0% from 0.181% in April to 0.183% in May. The average rate among the top 10% of the most competitive nationwide banks increased by 2.7% from 0.370% to 0.380%. Alabama has the best average rate in the nation at 0.246% while Arizona has the worst at 0.081%. The average rate among Internet banks was 0.779%.

Checking

The average checking account APY increased by 1.7% from 0.128% in April to 0.130% in May. The average rate among the top 10% of the most competitive nationwide banks held steady at 0.260% in May. Vermont has the best average rate in the nation at 0.233% while Alaska has the worst at 0.052%. The average rate among Internet banks was 0.459%.

1-year CD

The average 1-year CD APY increased by 2.6% from 0.529% in April to 0.543% in May. The average rate among the top 10% of the most competitive nationwide banks increased by 2.1% from 0.970% to 0.990%. Utah has the best average rate in the nation at 0.782% while Oregon has the worst at 0.320%. The average rate among Internet banks was 1.051%.

5-year CD

The average 5-year CD APY increased by 1.4% from 1.460% in April to 1.480% in May. The average rate among the top 10% of the most competitive nationwide banks increased less than 1% from 2.030% to 2.040%. Utah has the best average rate in the nation at 2.044% while Georgia has the worst at 1.125%. The average rate among Internet banks was 1.679%.

Reward Checking

The average reward checking account APY increased by 1.1% from 1.797% in April to 1.817% in May. The average rate among the top 10% of the most competitive nationwide banks increased by 1.1% from 2.850% to 2.880%. The average balance cap for reward checking accounts has decreased from $17,736 to $17,339. The balance cap is the maximum balance that qualifies for the reward checking account's top rate. Wyoming has the best average rate in the nation at 1.820% while North Carolina has the worst at 0.496%.

April Bank Failures

One bank and zero credit unions were closed in April 2017. As a comparison, one bank and six credit unions were closed in April 2016. The one bank that failed was First NBC Bank in Louisiana with $4.74 billion in assets (view health ratings for any bank or credit union and list of troubled banks by Texas ratios).


Comments
deplorable 1
deplorable 1   |     |   Comment #1
I closed my UFB direct account years ago because of the low rate and now they have the top rate again 1.3%. I missed this one. This will be a good option if Bankpurely drops it's rate. Duke energy premier notes just raised their rates to match Ally demand notes as well FYI.
111
111   |     |   Comment #2
My understanding is that "Duke energy premier notes" have no FDIC or NCUA-type insurance - is this correct? Thanks.
Bogey
Bogey   |     |   Comment #3
You are correct.
Att
Att   |     |   Comment #4
Yes. You are correct
tdurniak
tdurniak   |     |   Comment #5
Good news! Dollar Savings Direct just announced their rate will go up to 1.30%.
deplorable 1
deplorable 1   |     |   Comment #6
I can't believe Dollar savings direct raised the rate and yet leaves their long term customers with older accounts in the dust. Emigrant is a strange bank hard to figure out.
Saver
Saver   |     |   Comment #7
It is most discouraging to see that in every case for both short- and long- term CDs, the avg. APY today is still lower than it was 5 years ago. And that was after 3 Fed Res increases in the rate over the past year. Very pitiful reaction by banks and CUs
deplorable 1
deplorable 1   |     |   Comment #8
I agree saver. I also find it funny that whenever interest rates are higher the economy seems to be doing better even with the higher rates. I think one reason for that is us savers actually buy things when we are earning interest income which helps stimulate the economy. I know that I have tightened up ever since rates dropped. The last time I bought a new car(0% 5 yr. financing) interest rates were 6% and I made the payments with interest.
DepositAccounts.com April 2017 Rate Trends

Over the last several years we have been issuing monthly press releases. These are intended to provide a summary of average deposit account rates and how they have changed in the last month. We thought these press releases would be of interest to readers now that we are finally seeing some upward movement on rates.The April press release is below.

Please note that I will continue to post my weekly rate surveys without any changes.

Deposit Rate Impact from the Two Recent Fed Rate Hikes

The Fed rate hike in March was a...

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