Bank Deals Blog: Internet Banks

AloStar Bank of Commerce (a division of Cadence Bank, formerly BancorpSouth Bank) is currently offering an 8-month CD Special earning 4.50% APY. The minimum opening deposit is $10k of new money, which is defined as being “non-AloStar or non-Cadence Bank funds.”

Availability

As an online division of Cadence Bank (Tupelo, Mississippi), AloStar Bank of Commerce offers its very limited product line to all U.S. citizens and resident aliens, 18 years or older, who have...

Two weeks ago I noted the slowdown of online savings account rate increases. I had hoped it was just due to the holidays. I’m sorry to report that rate hikes haven’t picked up. There were no major online savings accounts that had rate hikes in the last two weeks. Five of the major online banks have kept their online savings account rates at 3.30% APY since before Christmas. These include Ally, American Express, Capital One, Discover and Marcus.

With the Target Federal Funds Rate (TFFR) rising to 4.25%-4.50% more than a...

Kansas-based Brilliant Bank (internet division of Equity Bank) raised the rate on its Money Market Account (MMA) late last week. Following a 29bps increase, the MMA now earns 4.30% APY, which is currently the highest rate offered on an internet bank money...

Now through February 15, 2023, Marcus by Goldman Sachs (Marcus) is offering a $100 bonus when depositing $10k or more of new money in a new or existing Online Savings Account. The new funds must be deposited within 10 days of enrollment. At least $10k of the new funds, plus the account balance at the time of enrollment, must be maintained for 90...

More inflation news came out today which showed that inflation is beginning to ease. This was the producer price index, and it declined in December more than had been expected. This and last week’s CPI report will give the Fed more justification to downshift once more on rate hikes. The odds of a 25-bp rate hike at the next Fed’s meeting (Jan 31/Feb 1) are now 94.8%, up from 76.7% last week. The odds of a 50-bp rate hike are now only 5.2%. These fed funds rate odds are based...

Although I’ve written about the High Yield Savings account offered by Ivy Bank (internet division of Cambridge Savings Bank) several times in the past year, I haven’t written about the CD product line since Ivy Bank opened its virtual doors in August 2021. Following a substantial 185 bps increase this week, the 1-year CD currently earns 4.85% APY. The minimum opening deposit is $1k, with a...

Since early December, there hasn’t been any rate activity on the Colorado Federal Savings Bank (CFSB) CDs, with the exception of the 12-month CD. Following a recent gain of 25 bps, the 12-month CD currently earns 4.75% APY. The minimum opening deposit is $5k, with no stated balance cap. FYI – The 4.75% APY should place the 12-month near the top of the nationally available 1-year CD category in this week’s CD Deals...

With the apparent slowdown of rate increases at online banks, Ally Bank bucked that trend with rate increases on several of its CDs on Friday. Ally’s 13-month Select CD and its 11-month No Penalty CD had the largest rate gains, with increases of 40 bps and 35 bps, respectively. These increases may be an attempt by Ally to encourage its...

Two weeks ago I gave my opinion that most online savings account rates should reach 4% in the next month or two. I’m not so sure now. Rate increases have slowed down, especially at the major online banks. The slowdown may be due to the holidays. If that is the case, we should see a pick up of rate hikes. Most of the major online savings account yields are at 3.30%. They have a long way to go to reach 4%. A few are far above the average. Synchrony is...

Happy New Year! One year ago, I wrote “let’s hope 2022 will be the year when deposit rates rise substantially and the inflation rate falls.” Deposit rates did rise substantially in 2022. For 2023, let’s hope that deposit rates don’t fall substantially. Long-term CD rates at a few banks and credit unions have already begun to fall. Mid- and short-term CD rates are still rising, but the rates of the top CDs haven’t risen much.

Savers will have to make difficult decisions this year regarding term lengths of their CDs. Do...