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Personal Finance Blog By MoneyRates - September 2007

6.00% Yields from Pentagon Federal Credit Union

September 28, 2007

By MoneyRates Team | Money Rates Columnist



Members of the armed forces and their families may be eligible for the 6.00% money market certificates available from Pentagon Federal Credit Union on their 3-year, 4-year, 5-year, and 7-year terms. The minimum deposit is $1,000 for the 6.00% offer which is effective until October 31, 2007. Employees of defense contractors may also be eligible for this credit union offer.
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Home Equity Loan Rates from Wachovia Bank

September 27, 2007

By MoneyRates Team | Money Rates Columnist

The Savings Investor has been tracking home equity loan rates closely following the decrease in short term interest rates by the Fed. And while national averages are down as expected, we are taking a look at how fixed-rate home equity loan rates have fared. We have used a sample borrower who has a $400,000 house and is borrowing $60,000 which will still keep them with a loan-to-value ratio of below 80%. The current rates quoted from Wachovia Bank on a fixed-rate home equity loan are listed below:

Fixed Rate Home Equity Loan - 30 year Term, $60,000 loan, $600 origination fees

Excellent credit: 8.79% rate / 8.90% APR
Good credit: 9.04% rate / 9.16% APR
Fair credit: 9.39% rate / 9.51% APR

Fixed Rate Home Equity Loan - 15 year Term, $60,000 loan, $600 origination fee

Excellent credit: 8.19% rate / 8.36% APR
Good credit: 8.44% rate / 8.61% APR
Fair credit: 8.79% rate / 8.97% APR

Fixed Rate Home Equity Loan - 5 year Term, $60,000 loan, $600 origination fee

Excellent credit: 7.79% rate / 8.23% APR
Good credit: 8.04% rate / 8.48% APR
Fair credit: 8.39% rate / 8.83% APR

CONCLUSION - These rates do not seem as good as we might have expected. Why? Mainly because fixed-rate loans have rates which are influenced more directly by Treasury yields than the level of the federal funds rate. Treasury yields for terms from 5 years to 30 years have increased over the last week increasing these yields as well. Lenders have also tightened up their standard following the sub-prime debacle and "easy money" is harder to find. Despite these less than excellent rates (based on recent memory), a fixed-rate home equity loan rates may be safer in the longer term than the variable variety which can turn quickly.

Run home equity loan quotes from lenders in your area here

Posted in: Mortgage, Bank Update

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KeyDirect's 6.05% APY 10-year CD

September 25, 2007

By MoneyRates Team | Money Rates Columnist

KeyDirect has increased rates this week on their longer term deposits:

5-year - 5.14% Rate / 5.26% APY

7-year - 5.51% Rate / 5.65% APY

10-year - 5.89% Rate / 6.05% APY

Account can be opened online at keydirect.com. The above rates and yields are for deposits of $50,000 and more, tiered rates for deposits less than $50,000 apply. The CD offer is valid in 37 states. Check keydirect.com to see if your state is included. KeyDirect is an FDIC-insured bank.

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Treasury Inflation Protected Securities (TIPS)

September 24, 2007

By MoneyRates Team | Money Rates Columnist

A lot of headlines after the Federal Reserve action last week have focused on the increased likelihood of inflation emerging in the economy now that the American consumer has been given a lift by the Fed. Investors looking to be protected against large scale inflation in their portfolios have the option of buying TIPS (Treasury Inflation-Protected Securities) which are offered in 5-year, 10-year, and 20-year terms with a total return which combines a fixed-rate component and a variable-rate component indexed to CPI. The spread between a TIPS and the corresponding Treasury bill, note, or bond is considered the break-even point where an investor would be equally well off invested in U.S. Treasuries or TIPS for a given term. For example, a 10-year TIPS yielding 2.47% when compared to the 10-year Treasury Bond yield of 4.63% results in a spread of 2.16%. If inflation, as measured by CPI, were to be greater than 2.16% for the 5 years an investor held the TIPS, then the investor would make more money in TIPS than he would in the 10-year Treasury Bond.

A simple way for an investor to purchase a variety of TIPS with different maturities is by purchasing a mutual fund which specializes in inflation-protection. The Vanguard Inflation-Protected Securities Fund Investor Shares Fund (VIPSX) is one of these funds. The Fund seeks to provide investors inflation protection and income, consistent with investment in inflation-indexed securities. The Fund invests at least 80% of its assets in inflation-indexed bonds issued by the U.S. government, its agencies and instrumentalities, and corporations. The fund hold over $11 billion in TIPS securities with an average maturity in the portfolio of under 10 years. The fund does throw off some income with a current yield of 2.53%, but the primary focus is inflation-protection. If inflation does crop up again significantly, then the price of this fund will increase as well.

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Highest Yields on Bank Money Market Accounts

September 24, 2007

By MoneyRates Team | Money Rates Columnist

A majority of banks have revised their deposit rates downward after the Fed lowered short-term interest rates 50 points last week,. A number of banks are still offering very attractive rates on their liquid money market accounts, especially when considering the 90-day Treasury Bill is only yielding 3.64% today. The best rates on FDIC-insured money market accounts today include:

everBank
5.84% Rate
6.01% APY
$1 minimum deposit

Zions Bank
5.41% Rate
5.56% APY
$50,000 minimum deposit

Countrywide Bank
5.35% Rate
5.50% APY
$50,000 minimum deposit

KeyDirect
5.22% Rate
5.35% APY
$1 minimum deposit

Flagstar Bank
5.18% Rate
5.30% APY
$1 minimum deposit

iGObanking.com
5.16% Rate
5.30% APY
$1 minimum deposit

Wilmington Trust
5.13% Rate
5.26% APY
$1 Minimum deposit

Discover Bank
5.12% Rate
5.25% APY
$50,000 Minimum deposit

National Bank of Kansas City
5.12% Rate
5.25% APY
$500,000 Minimum deposit

Evergreen Private Bank
5.12% Rate
5.25% APY
$25,000 Minimum deposit

E-Loan
5.12% Rate
5.25% APY
$1 Minimum deposit

Imperial Capital Bank
5.12% Rate
5.25% APY
$25,000 Minimum deposit

Security Savings Bank
5.12% Rate
5.25% APY
$100 Minimum deposit

AmTrust Direct
5.07% Rate
5.21% APY
$1,000 Minimum deposit

Nova Savings Bank
5.06% Rate
5.19% APY
$500,000 Minimum deposit

Virtual Bank
5.00% Rate
5.13% APY
$100,000 Minimum deposit

Zions Bank
5.00% Rate
5.13% APY
$50,000 Minimum deposit

AIG Bank
4.98% Rate
5.10% APY
$50,000 Minimum deposit

IndyMac Bank
4.93% Rate
5.05% APY
$25,000 Minimum deposit

Resource Bank
4.89% Rate
5.01% APY
$100,000 Minimum deposit

Umbrella Bank
4.87% Rate
5.00% APY
$50,000 Minimum deposit

Nexity Bank
4.73% Rate
4.85% APY
$1,000 Minimum deposit

Ascencia Bank
4.65% Rate
4.77% APY
$100,000 Minimum deposit

eBank
4.64% Rate
4.75% APY
$3,000 Minimum deposit

Appalachian Community Bank
4.64% Rate
4.75% APY
$50,000 Minimum deposit

Stearns Bank
4.64% Rate
4.75% APY
$100,000 Minimum deposit

Advanta Bank
4.59% Rate
4.70% APY
$50,000 Minimum deposit

New Dominion Bank
4.55% Rate
4.67% APY
$3,000 Minimum deposit

Contact bank directly for more information regarding requirements and restrictions.

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