Bank Deals Blog: Internet Banks

For Star Wars fans, happy May the Fourth Day. May the Fourth be with your deposit rates.

Last year I thought online savings account rates wouldn’t fall much below their lows during the zero rate period from 2008 to 2015. Unfortunately, online savings accounts in the last six months have fallen way below those pre-2015 lows.

The latest example is the FNBO Direct Online Savings account. This account has a long history. Soon after it launched in 2007, FNBO Direct offered a promotional rate of 6% APY. After the 2008 financial crisis,...

CD rate reductions still make up most of the rate changes in the last two weeks, but there were a few noteworthy rate hikes.

For popular online banks, TIAA Bank increased its 5-year CD rate from 0.80% to 0.85%.

For the less well-known online banks, CFG Bank increased its 5-year CD rate from 0.82% to 1.00%. It also increased the rates of its 3-year CD (0.72% → 0.85%) and its 18-month CD (0.62% → 0.70%).

Out of all the institutions, an easy-membership credit union had the most noteworthy CD rate increases. INOVA FCU’s...

In the last two weeks, Synchrony was the only major online bank to lower its savings or money market rate. Its High Yield Savings account rate fell from 0.50% to 0.40%. I’m hoping that the other major online banks won’t follow Synchrony and other major online banks that have already cut their savings account rates to 0.40% (including Capital One, Barclays, American Express, Discover, PurePoint Financial, FNBO Direct, and Citizens Access). We’ll see how long Ally, Marcus, and a few other major online banks will hold on to their 0.50%...

Porte is a brand of the financial technology company (fintech) Populus Financial Group that has partnered with MetaBank to offer unique checking and savings accounts. Like many of the new fintech bank accounts, Porte requires a mobile app to open and manage the account. You must first open the checking account, what it calls a demand deposit account. It’s a free checking account, but it pays no interest. Once you have the...

In the last two weeks, several credit unions lowered their CD rates with the start of a new month. A few small online banks also lowered their CD rates. However, no major online bank lowered their CD rates.

Not all of the rate changes were cuts. A few were rate hikes. Most noteworthy were the rate increases at Advancial Credit Union and NASA Federal Credit Union. Advancial’s Jumbo 5-year CD yield had a large increase, rising from 1.66% to 1.94%. NASA FCU’s 49-month CD Special yield increased from 0.80% to 1.50%.

In the last two week, no major online bank lowered its savings or money market account rate. That’s a sign that rates at online banks may be near the bottom.

The most prominent online savings account to have a rate cut is actually from a credit union. PenFed’s Premium Online Savings account rate fell 5 bps to 0.45% at the end of March.

Another prominent credit union to cut rates was Patelco, but the rate cut isn’t straightforward. Four out of six tiers of the Money Market Select account had rate cuts....

In the last two weeks, two major online banks lowered CD rates, and one increased the rate of one of its CDs.

About a week ago, Ally Bank cut most of its CD rates by 5 bps. Before the rate cut, Ally’s 5-year CD rate had held since early December. Its new 5-year rate (0.80%) is above average for online banks, but it’s disappointing to see that 0.85% wasn’t the bottom for Ally.

Capital One is the other major online bank that lowered CD rates. Two of its short-term CDs (6-month and...

The financial technology company (fintech) known as Beam that offered a high-yield bank account via its mobile app is banned from offering banking services. The Federal Trade Commission (FTC) just announced the settlement it reached with Beam Financial. According to the FTC press release:

Concerns started to build at Beam last September when DA readers posted problems that they had in withdrawing their money from Beam. In October, news of these issues were published by CNBC. In my October blog post, I reviewed these issues and my concerns about how Beam...

Discover Bank (Discover) is promoting its Cashback Debit account, which currently earns 1% cash back on up to $3,000 in debit card purchases each month. Instead of earning interest, you can only earn cash back rewards from your debit card purchases. For those who keep a small balance in their checking and prefer using debit cards, this checking account might be for you. Even if you don't...

Amboy Direct’s Jersey First eSavings account has maintained its 1.01% APY on balances between $1 and $50k for the last 18 months. (Note: the fine print on the landing page shows a 1.05% APY for balances up to $50k....