Bank Deals Blog: Internet Banks

Utah-based Merrick Bank ended the week with across-the-board CD rate increases, with the 12-month CD (3.60% APY) becoming the new rate leader for nationally available 1-year CDs. Since the beginning of the month, the 12-month CD has added 125 bps in four rate increases. The minimum opening deposit for any Merrick Bank CD is $25k, with a $250k balance cap. (Any interest accrued and paid into the CD is exempt from the $250k...

With today’s 75-bp Fed rate hike, the federal funds rate is now higher than it has been since early 2008. We should soon be seeing deposit rates higher than they were in 2018 and 2019. Several banks and credit unions don’t seem to be in a hurry to surpass their 2019 peaks, but I expect competition to prod them to surpass their 2019 peaks in the next month.

The major online banks are coming close to their 2019 peaks. The online savings account rates of most of them have reached 2%....

Emigrant Bank’s second online division, DollarSavingsDirect (DSD), increased the rate of its Dollar Savings Account from 2.00% to 3.00% APY yesterday. For those who followed online banks back in 2005, this should remind you of EmigrantDirect, which was the first to have a 3% APY during the 2004-2006 rate hiking cycle. EmigrantDirect was the first online division of Emigrant Bank.

When DSD was launched in 2008, its rate was very competitive, and that lasted for...

Bank5 Connect (internet division of Massachusetts-based BankFive) has ended the week by raising the rate on the 24-month Investment CD to 3.30% APY. While the 3.30% APY won’t be challenging the current 2-year CD top rates, the 24-month Investment CD’s intrinsic value lies in its add-on capabilities: unlimited number of deposits allowed anytime during the term. A 24-month Investment...

Rising Bank, the internet division of Missouri-based Midwest BankCentre, has increased its CD rate several times in the past four months. The most recent increases occurred this week, with the 1-year Term CD (3.30% APY) and 2-year Term CD (3.45% APY) each gaining 20 bps. The 1-year Term CD currently offers the highest rate for nationally available 1-year CDs. The minimum opening deposit for a Term...

Treasury yields have been rising all month, with a large surge after yesterday’s release of August CPI numbers which showed higher-than-expected inflation. This inflation news also should keep the Fed on track for at least a 75-bp rate hike next week and additional large rate hikes at its November and December meetings.

With these latest Treasury yield gains, the 1-year Treasury yield is getting close to 4% (3.95%), and the 6-month and 2-year yields are close behind. That has already impacted brokered CD rates. Brokered CDs with terms over six months...

As I noted in yesterday’s Latest Liquid Bank Account Summary, Kansas-based Brilliant Bank is one of two internet banks offering the current top rate (2.61% APY) on nationally available money market accounts.

Brilliant Bank is a very young bank, having opened its virtual doors in May, with the Money Market Account added to the product line little more than a month ago....

The odds of a 75-bp rate hike at the Fed’s September 20-21 meeting are rising. The fed fund futures market is showing odds of 78% for a 75-bp rate hike (via the CME FedWatch Tool). Interviews and speeches from Fed officials are suggesting that we may see the fed funds rate exceed 4% by early next year, and remain at that level for all of 2023. Cleveland Fed President Loretta Mester, gave a speech today detailing what she anticipates:

Next week’s release of the August CPI (Sep 13) may settle the...

In the past four months, Rising Bank, the internet division of Missouri-based Midwest BankCentre, has had several CD rate increases. The most recent increases occurred this week, with the 1-year Term CD gaining 35 bps. The new 3.10% APY is currently the highest 1-year CD rate offered...

With the odds rising that the Fed will hike 75 bps at its September meeting and with Treasury yields rising, CD yields continued to rise in the last two weeks of August. However, there are not many new top CD rates for the different maturities from two weeks ago. For example, the top nationally-available 5-year CD yield is 3.65%, which is the same top yield from two weeks ago. Early in August, a couple of credit unions with easy membership requirements offered long-term CDs with 4% yields. Those didn’t last...