Bank Deals Blog: Internet Banks

Last Friday’s consumer inflation report that showed a surge in inflation is unlikely to have any impact on the Fed. Higher energy prices due to Hurricane Harvey was the main reason for the surge in the consumer price index (CPI), but the core CPI which excludes food and energy rose a much smaller amount (0.1%), and on a yearly basis, the core CPI remains unchanged at 1.7% for the fifth month in a row. Even though core CPI isn’t the preferred inflation index for the Fed, it does add to...

Michigan-based Northpointe Bank has added a 17-month CD Special that earns 1.75% APY. The minimum deposit is $1k, with no stated balance cap.

The CD Special is also offered as an IRA, earning the same APY with the same funding requirements.

As stated in the Truth in Savings disclosure, the Early Withdrawal Penalty reads as follows:

For CD Terms of 1 year but less than 3 years the
penalty is 90 days interest on principal amount withdrawn.

Ultimate...

Bank5 Connect has added an 18-month Special Rate ConnectCD that earns 1.75% APY. This limited-time offer requires a $500 minimum deposit and “up to $100,000 per customer may be deposited for promotional rate.”

As stated in the CD FAQs, the Early Withdrawal Penalty reads as follows.

There is an early withdrawal penalty on a Connect CD of 3 months of interest for
terms less than one year and...

Deal Summary: CD rate hikes: 5yr CD, 2.30% APY; 2yr CD, 1.75% APY; 18mo CD, 1.50% APY; no minimum deposit

Capital One increased the rates on six of its 360 CDs this morning. Most notably, the 5-year CD rate is back at 2.30% APY. This repeats the 5-year CD rate increase Capital One did in March of this year. The 2.30% lasted about six weeks. Since March, rates overall have risen, but most of the gains have been on liquid accounts and short-term CDs. Long-term CDs have lagged...

Deal Summary: Online Savings Account, 1.30% APY on all balances of $1 and above.

GS Bank raised its Online Savings Account rate by 10 bps to 1.30% APY. This is the second rate increase this year. In June, GS Bank had its first savings account rate increase since GS Bank was formed in April 2016 from Goldman Sachs Bank’s acquisition of the internet-bank portion of GE Capital Bank.

As I mentioned last week when Barclays increased their rates, the combination of internet bank competition and the...

Deal Summary: 18-month CD (1.65% APY), 12-month CD (1.55% APY) and 6-month CD (1.30% APY). Minimum deposit $1k.

Utah-based Capital Community Bank has launched a new internet bank called Limelight Bank. Currently, the product selection is limited to only three short-term CDs which include an 18-month CD (1.65% APY), a 12-month CD (1.55% APY) and a 6-month CD (1.30% A PY). These rates aren’t the best when compared to other internet banks. Nevertheless, it’s always nice to see a new internet bank. It will be worth watching to see...

Even with last Friday’s weak jobs report, we continue to be on track for a December Fed rate hike. This WSJ article sums up the September employment report and its impact on the Fed:

We may not be as fortunate next year if inflation stays low. Economist Tim Duy gave his opinion about what to expect from the Fed in December and next year in his recent Fed Watch newsletter:

One thing that should reduce the chance of a rate-hike slowdown at the Fed is new members that are being appointed by...

Barclays has just raised the rate of its Online Savings Account by 10 bps to 1.30% APY. It was just over two months ago when Barclays increased the savings account yield to 1.20%. Since May 16 when the yield increased from 1.00% to 1.05%, Barclays has been steadily increasing the rate.

The combination of internet bank competition and the expectation of future Fed rate hikes are likely important factors for this...

Five months ago, IncredibleBank, the internet division of River Valley Bank (Wisconsin), added 10 bps to its Savings account rate, resulting in a 1.21% APY on balances of $2.5k and above. IncredibleBank has just introduced an additional rate tier (1.41% APY) for balances of $250k+.

Clicking the details arrow on the right side of the above table will show you the Savings account rate history. As you can see, the account has remained competitive since...

The odds of a December Fed rate hike continue to look solid. As long as the economy doesn’t nosedive, the Fed is likely to hike rates at its December meeting. There might be some disappointments in the economic news in the next month. We’ll soon be seeing some of the effects of the hurricanes on the economic data. The September jobs report that’s scheduled for release this Friday is anticipated to show fewer jobs gains than previous months. Nevertheless, the Fed made the point at its last meeting that the...