Bank Deals Blog: Internet Banks

Republic Bank’s internet division, MemoryBank introduced its Online Money Market Account (OMMA) in July, with an initial 1.85% APY. 40 bps were added in September and another 5 bps were added yesterday. The OMMA now earns 2.30% APY on balances between $0.01 and $1 million, with balances over $1 million earning 0.01% APY.

Basic information about the OMMA includes,

• $50 minimum opening deposit
• No checking...

In early November, earn.bank made its debut in the internet banking world, with a product line consisting of a 1-year and 2-year CDs and a Money Market Account. While the earn.bank brand is new to most of us, California-based Silvergate Bank has been developing earn.bank for about two years. This independently operating online division of Silvergate Bank is the organic outgrowth of the Bank’s online banking platform.

MySavingsDirect (MSD) added 5 bps to its MySavings Account (2.40% APY) yesterday. This is the second rate increase since MSD became a rate leader in early September, and a good indication that Emigrant Bank (the parent of MSD) is intent on keeping the MySavings Account at or near rate leader status.

Emigrant Bank’s other internet bank, DollarSavingsDirect (DSD), became a savings account rate leader in April 2017. Six rate hikes over the next ten months allowed DSD...

This is my first weekly summary with the Fed review split off on a separate blog post. My weekly summaries will now be focused entirely on deposit rates and deals. This change was done to separate the economic and political discussion from the deal discussion. Often economic discussion leads to political discussion, and that can create lots of comments which drown out comments on deals and rates. Please keep all discussion about the Fed, the economy and politics to my Fed/Economy review blog post. Please use the comments of this...

Last summer Capital One changed its beneficiary policy for 360 deposit accounts by allowing customers to designate up to 10 beneficiaries to each account. As I mentioned in my July blog post, one issue with the new policy was that customers could only add and manage beneficiaries with a paper form which not only had to be mailed/faxed, but it also had to be notarized. I’m happy to report that Capital One has added an online management feature that allows customers to add beneficiaries to their accounts online.

For the third time in as many weeks, Live Oak Bank has nudged the rate on its 1-year CD (2.85% APY). This week’s 5 bps increase keeps the 1-year CD within striking distance of the category rate leaders. The new 2.85% APY is also the highest 1-year rate currently offered by an internet bank. The 18-month CD gained 10 bps this week, but its APY isn't...

The Fed is still widely expected to raise the federal funds rate at its December 18-19 meeting. However, uncertainty has been growing regarding interest rates in 2019. In October, Fed Chair Jerome Powell, made hawkish comments that suggested that the Fed wasn’t close in ending its rate hikes. After those comments, the stock market had many large dips, and now there are expectations that the Fed Chair may start to sound more dovish. That’s what many will be looking for when the Fed Chair gives a speech on Wednesday at...

This morning Synchrony Bank re-introduced a competitive 14-month CD special. The CD special earns 2.80% APY. Minimum opening deposit is $2,000. This is a limited-time offer. According to Synchrony’s front page, it will only be available through December 2, 2018.

Synchrony Bank first introduced a 14-month special on May 1st. At that time, the special CD was a rate leader for nationally available CDs with terms around 12 months. The rate went up on June 19th. The...

This morning, CIT Bank increased the Upper Tier rate of its Savings Builder Account by 10 bps to 2.25% APY. CIT Bank first debuted this account in early October. As I mentioned in my October post, this isn’t a typical savings account. To qualify for the 2.25% APY, customers must either maintain a balance of $25k+ or maintain a monthly deposit of...

Signs are starting to appear that the stock market sell-off may be having an impact on the Fed. According to this CNBC article:

In the last week, comments from Fed Chair Jerome Powell and Fed Vice Chair Richard Clarida suggest that there are growing concerns about the global economy and the impact to U.S. growth. That sounds similar to what caused the Fed to pause rate hikes in early 2016.

Fortunately, the Fed doesn’t appear to be ready for any quick changes on its gradual rate hike policy. Economist Tim Duy had...