- 5.12% APY 36 months
- 4.86% APY 30 months
- 4.86% APY 24 months
- 4.60% APY 18 months
- 4.60% APY 12 months
As in the case of the Wilshire State Bank installment savings account (Rainbow Savings), you receive the best rate if you set up automatic transfers from a Wilshire State Bank checking account into the installment savings account. If you deposit a lump sum into the checking account, you'll lose out on interest while the money sits in the checking account earning little if any interest. To maximize the amount of interest that you earn, you'll want to set up automatic transfers from an online bank (like at Ally/GMAC Bank) into the checking account.
Update 5/25/09: Several readers have noted that Wilshire State Bank's eLink Savings Account can be used for the automatic deposits, and this savings account continues to pay a very competitive rate of 2.75% APY as of 5/25/09. I have more details on this Savings Account in my Wilshire State Bank review.
I've set up an example of how to calculate a return assuming that you have a lump sum. The spreadsheet combines the interest of the installment savings account and a regular savings account. I've used Google spreadsheets, and I've embedded the spreadsheet below:
These numbers are based on what Wilshire State Bank lists for a 12-month Rainbow Savings Account as of 5/24/09.
The spreadsheet has the following assumptions:
- Installment savings account interest rate = 4.50%
- Regular savings account interest rate = 2.00% (and remains the same for the year)
- Initial balance = $9,759.60
- 12 monthly deposits of $813.30 into the installment savings account
- The initial balance minus the first installment is deposited into the regular savings account
- Interest is compounded monthly
- No interest is lost during the transfers of the money into the installment account
At the bottom of the spreadsheet, I calculate what I call the effective APY which is based on the total return of both the installment savings account and the regular savings account. In this example, the effective APY is 3.40%. So a combination of the installment savings account and an online savings account can allow you to do much better than a comparable CD.
Refer to my installlment savings account page for other banks offering these. For more details about Wilshire State Bank's Rainbow Account, please refer to my Wilshire State Bank review.
For the latest top CD rates, refer to my weekly rate summary.