The Fed and Online Bank Rates and Deals
January 29, 2008
The bad news for online bank investors is that the Fed is very likely to drop rates 25 or 50 points at this week's meeting, but the good news is that it appears most online banks have already factored in that rate cut into this week's rates and we don't expect a large reduction in bank deposit rates again this week. While 5% yields were very easy to find even last week, this week any rate over 4.50% constitutes a great deal. The highest yielding CDs, money markets, savings accounts, and checking accounts posted at money-rates.com are still a full point to two points above what the local banks are paying on average on deposits, but it looks like savings investors will go much of 2008 without 5% rates readily available. Investors using money funds, bond funds, or buying U.S. Treasuries directly are seeing an even worse outlook for yields with 4.50% currently unattainable. There are some interesting rate specials still being offered by online banks. A sample of the rates posted on money-rates.com are listed below including a few Credit Union rates. Credit Unions are not FDIC-insured, but are insured by the NCUA. For more information about the NCUA and the insurance on Credit Union deposits visit the NCUA website here.
Online Bank Rate Specials posted on Money-rates.com January 29, 2008
10.00% APY from Shore Bank on their Grand Slam checking account for balances from $.01 to $1,000.
10.00% APY from Affinity Bank on their savings account for kids only (applies to balances up to $500 and only California residents are eligible).
7.00% APY from Patelco Credit Union on their 1-year certificate for new members in the San Francisco area. Federally insured by NCUA not FDIC.
6.00% APY - 6.25% APY from various banks who are offering Reward Checking programs. Certain monthly requirements must be met to earn APY. See a list of partcipating banks here.
5.30% APY from OneUnited Bank on their online savings account.
5.25% APY from Pentagon Federal Credit Union on their 7-year certificate. Membership includes members (and family members) of the United States Army, Air Force, Coast Guard, Navy, Marines, National Guard, Reserves, Cadets, ROTC as well as employees of the Department of Homeland Security (DHS), Department of Defense, Department of the Army, and the Department of the Air Force. Federally insured by NCUA not FDIC.
5.15% APY from Farmers State Bank on their 9-month CD. ($500 minimum)
5.10% APY from MidFirst Bank on their 7-year Callable CD. Bank has option to call, but the CD is non-callable for 1 year. Requires branch visit in Arizona.
5.10% APY from Countrywide Bank on their 90-day CD for California residents. Apply online indicate California residency. ($5,000 minimum)
5.01% APY from Everbank on their introductory offer checking account or money market account. ($1,500 minimum)
5.01% APY from Century Bank Direct on their 5-month CD. ($1,000 minimum)
4.85% APY from Doral Bank Direct on their 9-month CD. ($1,000 minimum)
4.85% APY from Bank of America on their 4-month CD. Applies to online accounts only. ($5,000 minimum)
4.80% APY from ING Direct on their ING Direct Electric Orange checking account with tiered yields of 4.90% (+$100,000), 4.65% ($50,000-$99,999), and 3.15% ($0-$49,999). This checking account from ING Direct is paperless with ING providing a platform to send money to any person or business via electric checks.
4.85% APY from Atlantic Coast Bank on their 13-month CD term. ($1,000 minimum)
4.77% APY from Gloucester County Federal Savings Bank on savings accounts balances of $100,000 and over. 90-day rate guarantee.
4.75% APY from BankUnited on their 10-month, 11-month, and 12-month CD. ($5,000 minimum deposit)
4.60% APY from Academy Bank on their 9-month CD. ($500 minimum)
4.60% APY from Independence Bank on their 5-month CD ($1,000 minimum)
4.55% APY from Equity Bank on their 5-month CD. ($1,000 minimum)
4.50% APY from Country Bank on their 5-month CD. ($500 minimum)
4.50% APY from Evergreen Private Bank on their 5-month CD. ($10,000 minimum)
4.50% APY on Bank of America's 9-month Risk Free CD. This CD includes the ability to withdraw funds without penalty prior to maturity date. ($5,000 minimum)
4.40% APY on savings account at E*Trade Bank which can be linked to your brokerage account. ($1 minimum, no fees)
4.30% APY from FNBO Direct on their online savings account. (no minimum balance)
4.25% APY from Superior Savings on their 7-month CD. ($500 minimum)
4.25% APY from LaSalle Bank on their online manager's special 4-month CD ($10,000 minimum)
4.20% APY from Principal Bank on their 7-month CD term. ($1,000 minimum)
