Bank Deals Blog: Internet Banks

Popular Direct hasn’t changed their controversial 60-day account freeze policy, but the Bank took one small step to correct a mistake. A reader emailed me a letter he received from Popular Direct informing him of a credit adjustment that will effectively move the start date of the 2% APY from July 23 to May 17. When the Bank increased the Popular Direct Plus Savings Account APY from 1.85% to 2.00% on July 23, they had apparently failed to update the effective date. Below is the excerpt of the letter...

The July Consumer Price Index (CPI) report that was released on Friday supports the continuation of the Fed’s policy of gradually raising interest rates. Core CPI which excludes food and energy “rose 2.4 percent for the 12 months ending July; this was the largest 12-month increase since the period ending September 2008.”

This CPI news and recent economic news on unemployment and GDP should keep the Fed hiking rates at a gradual pace, which will likely be once a quarter. That would mean rate hikes at the Fed’s meetings in September,...

This morning Synchrony Bank launched a new 13-month CD special with a very competitive 2.65% APY. Synchrony Bank also increased the rates of five of its standard CDs. Most noteworthy is the 60-month CD which joins the 3% club with a 3.00% APY. For all of the CDs, the minimum opening deposit is $2,000. All six of the new CD APYs are shown below in bold and are effective as...

Live Oak Bank’s short-term CDs saw modest rate increases this week, adding between 5 and 10 bps. The latest rates are 6-month (2.10% APY), 1-year (2.55% APY), and 18-month (2.60% APY). Any of the CDs offered by Live Oak Bank can be opened with a minimum $2.5k deposit, with a maximum $250k deposit per account. The maximum aggregate...

PurePoint Financial (PurePoint) is ending the week by raising the rates on its shorter term Online CDs. The 12-month CD had the largest rate gain, rising 30 bps to 2.60% APY. The 18-month CD rate increased 20 bps to 2.70% APY, while the 24-month CD rate had a slight gain of only 5 bps, rising to 2.80% APY. A $10k minimum deposit opens any PurePoint CD and there are no stated balance...

This morning, Goldman Sachs Bank USA (now operating under the brand Marcus by Goldman Sachs) increased the rate of its Online Savings Account by 5 bps to 1.85% APY.

Like past rate hikes, this new rate doesn’t make the savings account a rate leader, but it does keep the savings account on the high end for the large internet banks, and it should put pressure on the other large internet banks.

CD rates remained the same...

Last week’s FOMC meeting ended with no surprises. As expected, no policy changes were announced. The Fed decided to hold off on a rate hike, but slight changes in the FOMC statement pointed to a higher chance of two more rate hikes this year (which will likely come in September and December).

Economic data continues to support the case for the Fed to continue its gradual tightening of a 25-bps rate hike each quarter. The latest data came Friday when the July jobs report was released. The Calculated Risk Blog had...

Barclays has started the new month by increasing its Online Savings Account rate to 1.85% APY.

Last June, the Online Savings rate was raised to 1.75% APY. Prior to the May rate hike (1.65% APY), the Online Savings was lagging slightly in the rates race. In January, Barclays had raised the rate twice, and after the second rate hike, the Online Savings at the high-end for online savings accounts; that 1.50% APY held...

The Fed’s two-day FOMC meeting began today. The FOMC statement should be released at 2:00pm EDT on Wednesday. No Fed rate hike is expected. The next rate hike is expected to take place at the Fed’s meeting on September 25-26. Wednesday’s FOMC statement shouldn’t have any surprises. The Fed’s economic overview will likely indicate strong growth, and that will point to two more rate hikes for 2018.

Strong economic growth was seen in Friday’s Gross Domestic Product (GDP) report. GDP grew at a rate of 4.1% in the second quarter. That...