5 Percent 24-Month CD at Ohio CU read and submit comments for this post

The Columbus Metro Federal Credit Union is offering a 24-month 5.00% APY CD. This promotional CD requires an initial deposit of at least $5K, and the deposit must be money new to the credit union. You can also get this 5% rate for 36-month and 48-month terms. The offer ends on December 31, 2005. There's a standard 5-year CD that earns 5.25% APY and requires only a $500 deposit.

Columbus Metro FCU's field of membership includes anyone who lives, works, worships or attends school in Franklin County Ohio. Its main office and three branch offices are all located in Columbus, Ohio.

For a list of recent credit union and local bank certificate of deposit deals, refer to my last weekly deals summary post.

HSBC's New $25 Signup Bonus read and submit comments for this post

There's a new $25 signup bonus for HSBC's Online Savings Account. It's similar to previous ones in that it's not publicly advertised by HSBC. However, the promo webpage is available to everyone. This fatwallet thread reported on this and included the promo code "start". The small print of the offer states that the bonus will be deposited to the account within 45 days following account opening. The offer expires on 2/28/06.

I've contacted HSBC about previous non-advertised signup bonuses in the past, and they've stated that these promotions are offered by HSBC to select customers. However, many on fatwallet have reported receiving the bonus by just signing up at the promo webpage with the promo code. This fatwallet thread reported on a September $25 signup bonus, and many have replied in October that they received this bonus. There was also a $35 signup bonus. Several people have reported problems in receiving this one.

The important thing to note about this bonus is that there's no guarantee. However, there's not much to lose. HSBC's Online Savings Account rate is at 4.00% APY and requires only $1 to open. It also has some advantages over EmigrantDirect such as an ATM card. The quick summary of this fatwallet thread has some other good points about this account.

6.73% I Bond vs. Bank CD? read and submit comments for this post

At first look, an I Bond with an interest rate of 6.73% may seem like a great deal since the best CD rates aren't much above 5%. Then if you include some of the I Bond's tax advantages over bank CDs and savings accounts, I Bonds may look even better. However, there are several issues about the I Bond rate that make it less attractive.

I just recently contributed a guest article to BestCashCow describing the I Bond and how it might compare to a CD. Hopefully, it'll help you decide if an I Bond purchase at this time would be a good choice for your specific investment needs.

5.09% 15-Month CD at SDFCU read and submit comments for this post

The State Department Federal Credit Union is offering a special 5.09% APY 15-month CD. The special requires $5K minimum deposit, and the money must be new to the credit union. The CD must be opened and funded online.

SDFCU's field of membership is primarily employer-based. In addition to the US Department of State, there are about a hundred other employers listed.

SDFCU has branches in Washington DC and several cities in Virginia and Maryland.

In addition to the 15-month CD special, SDFCU has been offering a high rate on long-term CDs for awhile. Current 5-year certificates of deposit earn 5.46% APY for CapitalClub customers. Refer to this previous post for more information about these CDs and the CapitalClub.

Some Long Term CDs Trending Down read and submit comments for this post

Although 6-month and 1-year CDs are trending up, some of the long-term CDs are trending down. For example, early in this month Netbank's 3-year CD reached 5%. Currently, only Netbank's 5-year CD is at 5%. Its 3-year CD is now at 4.90% APY. Similar changes have occured at UmbrellaBank and GMAC Bank.

          GMAC    GMAC   Umbrella Umbrella
          11/18   11/28  11/18    11/28
          -----   -----  -----    -----
3 Month   4.20%   4.20%  4.20%    4.30%
6 Month   4.35%   4.45%  4.40%    4.50%
9 Month   4.38%   4.50%       
12 Month  4.70%   4.75%  4.70%    4.80%
18 Month  4.75%   4.80%  4.75%    4.70%
2  Year   4.80%   4.85%  4.80%    4.65%
2.5 Year                 4.85%    4.60%
3  Year   4.85%   4.90%  4.90%    4.50%
4  Year   4.90%   4.92%  4.90%    4.65%
5  Year   5.05%   5.00%  5.00%    4.75%

The long-term CD changes at GMAC Bank have been small. However, the change at UmbrellaBank has been substantial. Umbrella's 1-year CD now has a higher rate than any of the longer term CDs.

Perhaps banks are anticipating the Fed will be ending its rate hikes at some point next year. As was apparent when the Fed released its minutes from its last meeting, 2006 will likely not see the number of rate hikes as were seen in 2005.

At some point, you'll want to change from short-term CDs to long-term CDs before the rates start to decline. If you keep waiting for those 6% or higher CDs, you may end up missing the boat.

WesBanco $50 Checking Account Deal read and submit comments for this post

WesBanco is offering $50 for opening its Free Checking Account. Refer to WesBanco's promo page for details.

WesBanco's Free Checking Account offers a free debit card and has no balance requirements or monthly fees.

WesBanco has many branches in Ohio and West Virgina. It also has a branch in Washington, Pennsylvania.

ebank $50 Checking Account Deal read and submit comments for this post

ebank is offering a $50 AMEX reward card for opening an ePremium Checking account. It requires a balance of $2.5K into the ePremium Checking account. Also be sure to use the promo code "ONLINE REWARD" when applying online. This offer is only for new ebank checking account customers and expires at the end of 2005. Refer to ebank's promo page for the full details.

This is similar to the deal ebank had earlier in the fall. In that deal, ebank was offering $25 cash for opening any checking account and $25 cash for any CD, money market account or IRA.

Unlike the previous deal, the only account option to get the reward is the ePremium Checking account. The ePremium Checking account requires that you keep a minimum daily balance of $2.5K or an average daily balance of $5K to avoid a $10 monthly fee. As I mentioned in this previous post, ebank's ePremium Checking does have a lot of perks including a high 3% interest rate and excellent rates on CDs (such as 4.60% on a 6-month CD).

Savings Account, 6-month CD or 12-month CD? read and submit comments for this post

If you have some money that you won't need for at least a year, where's the best place to put it? Would a high-yield savings account like at EmigrantDirect be better than a high-rate 6-month CD? Or a 12-month CD? I've tried to come up with some simple rules of thumb that may help you decide.

The most important question is your need for the money. Is it money that you almost certainly can live without for at least one year? If there's a good chance that you'll need the money sometime within the next year, a high-rate savings account would probably be the best choice.

If you don't care about liquidity over the next year, the next big question is how will interest rates change. This is where it gets tough since no one can predict future rates. It seems likely that the Fed will raise rates at least 3 more times over the next few months. However, in my opinion, 2006 probably won't see as many rate hikes as 2005.

Savings Account or CD?

One simple method to decide between a savings account and a CD is to make an estimate of what the savings account rate will be when the CD matures. Then take the average of the initial and ending savings account rate and compare that average to the current rate of the CD. If the average is better, than the savings account is the better deal.

For example, suppose you're considering leaving your money in EmigrantDirect's savings account which is currently paying 4% vs. a 1-year 4.75% CD at GMAC Bank. Let's assume that one year from now EmigrantDirect's savings account will be earning 5%. This seems like a reasonable assumption since Emigrant's savings account started this year at 3% (see rate chart). Over the next year, your average rate of return would be about 4.5% which is 0.25% less than the 1-year CD option.

6-month vs. 12-month CDs?

Would a 4.45% 6-month CD be better than a 4.75% 12-month CD? For this comparison, estimate the 6-month CD rate 6 months from now. Take the average of that rate and the current rate. If the current 1-year CD rate is higher than this estimated average rate, the 1-year CD would be better.

About 6 months ago, GMAC Bank was offering 6-month and 12-month CDs at 3.65% and 3.90% APY. Currently, GMAC's 6-month and 12-month CDs earn 4.45% and 4.75% APY. If you had purchased a 6-month CD back then and renewed it today, the one year average return would be about 4.05%. This is about 0.15% higher than what you would have received in a 1-year 3.90% CD back then.

At GMAC Bank, a 6-month CD rate increased from 3.65% to 4.45% in 6 months. If this same increase occurs in the next 6 months, you would expect 6-month CDs with rates of 5.25% around June of next year. The average of 4.45% and 5.25% is 4.85%. So a 1-year CD would require a rate of at least 4.85% today to be better than a 4.45% 6-month CD assuming that rates increase the same as they did this year.

Banking Deal Summary for Nov 26th read and submit comments for this post

This Thanksgiving week was fairly quiet on the bank rate front. The only bank that made a change to its savings/money market account was Corus Bank. Corus Bank's money market account finally made it to 4%. It's now at 4.01% APY for deposits between $10K and $100K. Deposits over $100 earn 4.17% APY.

Corus Bank also raised the rates on its CDs. Its 6-month and 12-month CDs are now at 4.55% and 4.84% APY. Corus Bank's 1-year CD now matches Self-Help Credit Union's (SHCU) 1-year CD. SHCU CD rates seem to fluctuate every day. This week, its CD rates have gone down a bit. The 1-year CD went down from 4.90% to 4.84% APY.

Only two other banks made changes to their short term CD rates. UmbrellaBank made an increase of 0.10%, and GMAC Bank made an increase of 0.05%.

One new bank with high deposit rates that I came across this week is the US operations of the State Bank of India (SBI). At the time of my initial post about SBI, its bottom rates for 6-month and 12-month CDs were 4.63% and 4.89% APY with only $1K minimum required deposit for US residents. However, the rates went down slightly and are now 4.58% and 4.78% APY. It also has a money market deposit account that pays 3.76% APY. This bank is FDIC insured so it should be safe, but as I mentioned in the previous post, the website could be better. I'll wait and continue to research it before I add it to my list.

I also came across this week several CDs at local credit unions and banks with rates over 5%. The best deal is a 5% 9-month CD at Vineyard Bank in California. I've included links to my posts about these deals near the bottom of the list.

In the list below I've added MMA next to the rates that are from money market accounts. Most of these money market accounts have checking writing and ATM cards. Online savings accounts usually lack both of these.

The rates listed below are in APY. No minimum balances are required unless noted. Previous weekly summaries are available for Nov 19th, Nov 12th, Nov 5th, Oct 29th, Oct 22nd and Oct 15th.

As of November 26, 2005

Savings/Money Market Accounts:

• Western Financial Bank - 4.25% MMA, offers checking, my post
• UmbrellaBank.com - 4.15% MMA (min $1K), offers checking, my post
• Presidential - 4.12% (min $5K, only first $35K receives this rate), offers checking, my post
• GMAC Bank - 4.05% MMA (min $500), offers checking
• CapitalOne/Costco - 4.02% MMA (min $5K, Costco members only, $25 deal for exec. members)
• Corus Bank - 4.01% MMA (min $10K to open)
• HSBC - 4.00%, offers checking, (rate history)
• EmigrantDirect - 4.00%, my post, ($10 signup bonus), (rate history)
• MyBankingDirect - 4.00% MMA (min $5K), my post
• UFB Direct - 3.80% MMA, offers checking, my post
• CapitalOne - 3.75% (MMA has same rate, but with checks and ATM. $100 min.)
• Self-Help Credit Union - 3.66% MMA (min $500), my post
• VirtualBank - 3.55% (min $100), offers checking, my post
• ING Direct - 3.50%, my post ($25 deal), (rate history)
• MetLife Bank - 3.50% MMA (min $5K), my post ($50 deal)
• NetBank - 3.36% MMA ($500 min), requires checking, my post ($175 deal)
• ebank - 3.30% MMA ($1K min, rate for $10K-25K balance), offers checking

6-Month Certificates of Deposit:

• Self-Help Credit Union - 4.66% (min $500), my post
• Corus Bank - 4.55% (min $10K)
• UmbrellaBank.com - 4.50% (min $1K)
• GMAC Bank - 4.45% (min $500)
• VirtualBank - 4.40% (min $10K)
• ebank - 4.35% (min $1K), 4.60% for ePremium checking customers
• NetBank - 4.35% (min $1K), my post ($25 CD deal)
• ING Direct - 4.10%
• Western Financial Bank - 3.75% ($100 min)

12-Month Certificates of Deposit:

• Self-Help Credit Union - 4.84% (min $500), my post
• Corus Bank - 4.84% (min $10K)
• UmbrellaBank.com - 4.80% (min $1K)
• GMAC Bank - 4.75% (min $500)
• VirtualBank - 4.70% (min $10K)
• NetBank - 4.65% (min $1K), my post ($25 CD deal)
• ebank - 4.60% (min $1K), 4.85% for ePremium checking customers
• MetLife Bank - 4.51% ($1K min)
• Western Financial Bank - 4.40% ($100 min)
• ING Direct - 4.35%

18-Month Certificates of Deposit:

• CapitalOne/Costco - 4.74% (min $5K, Costco members only)

Checking and Saving Accounts at Local Credit Unions

• 5.12% money market account (California)
• 4.25% no-minimum savings account (New York)
• 4.00% checking account (CU that's open to all)

CD Specials at Local Credit Unions/Banks

• 6.25% 120-month CD (New York)
• 5.96% 60-month / 4.67% 6-month CDs (Michigan)
• 5.90% 15-month / 5.12% 8-month CDs (Illinois)
• 5.50% 60-month / 5.00% 30-month CDs (Chicago)
• 5.25% 7-month CD (Kentucky)
• 5.10% 12-month CD (Georgia)
• 5% 9-month/4.75% 6-month CD (California)
• 5% 15-month CD (Georgia)
• 5% 19-month / 4.8% 10-month CDs (Chicago)
• 5% 15-month CD (Massachusetts)
• 5% 24-month/4.75% 12-month CD (Chicago)
• 5% 30-month CD (Ohio)
• 4.55% 6-month CD (Austin, Texas)

CD Alternatives

• New I Bond Rate, I Bonds as CD Alternatives

CDs Over 6% With Some Catches read and submit comments for this post

With the help of a nice reader, I've come across some CDs with very high rates of over 6%. However, all have some catches that diminish their attraction. These may be good deals in some cases.

6.25% 10-year CD

Ridgewood Savings Bank is offering a 6.25% 10-year CD with a minimum deposit of $10K. You also can choose from various gifts in return for a lower 6.00% CD. There are over 35 gifts to chose from. The higher the deposit, the more expensive the gift. The gift options for a $50K deposit are a Phillips 42-inch Plasma HDTV and a JVC 37-inch LCD TV. There are also 5-year and 7-year gift CDs that pay 5% and 5.5% APY. One important note about the gift is that it'll count as interest income on the first year of your term. Ridgewood Savings Bank has branches through out Metropolitan New York.

The catch regarding this 6.25% CD is the 10-year term. That's a long time to lock up your money. You might regret a CD like this if interest rates continue to rise over the next few years. However, based on the latest news from the Federal Reserve Board, rate hikes may come to an end sooner than some might expect.

6.14% 1-year CD

The Martin County Credit Union is offering a 1-year 6.14% APY CD. Martin County is located in Florida and you can join this credit union just by living or working in Martin County.

The catch about this CD is that it requires a new auto or HELOC loan.

6.14% 5-year CD

Founders Federal Credit Union is offering a 5-year 6.14% APY CD. The minimum required deposit is $5K. Founders has branches through out South Carolina and Wisconsin. Membership eligibility is described here.

The catch about this CD is that the rate is variable. The website doesn't provide much more information. A customer service representative stated that the rate changes January 1st and July 1st of each year based on the Wall Street Prime minus 1% with a maximum rate of 12%.

CD Tips from the FDIC read and submit comments for this post

After publishing the last post about a FDIC article, I found another useful FDIC article titled "Certificates of Deposit: Tips for Savers". It has information about different types of CDs along with several useful tips.

In addition to basic CD information, the article describes brokered CDs, callable CDs, and variable-rate CDs. These are a little different than the standard bank CDs and require some additional research.

Things To Know About FDIC Insurance read and submit comments for this post

The FDIC published a consumer news article titled "7 Things Seniors (and Everyone Else) Should Know About FDIC Insurance".

FDIC Insurance Limits

The first two things mentioned were the basic $100K FDIC insurance limit and how this can be increased by owning accounts in different ownership categories. Another FDIC page gives detailed explanation and examples of ownership categories. An easy way to extend the limit is to open trust accounts with a qualifying beneficiary. An example is a Payable-on-Death (POD) account in which the beneficiary is either the owner's spouse, child, grandchild, parent or sibling. The third tip provided a warning about these ownership categories. A death or divorce can reduce FDIC insurance coverage. This applies to both joint accounts and trust accounts.

FDIC Strength

The next three tips makes it clear that you're safe in a FDIC insured bank if you keep your deposits under the limits. When I've discussed internet banks like EmigrantDirect to friends, they're not only worried about it being an internet bank, but also they're worried about the bank's financial health. Are you giving up security for better rates? Could these banks go under if consumers start defaulting on their debts due to the bursting of the housing bubble? With the US government so high in debt, would it be able to meet its FDIC insurance obligations if a large number of banks go under?

According to this FDIC article, you shouldn't worry. No depositor has lost a single cent of FDIC-insured funds as a result of a failure. Not only the principal is covered but also the accrued interest up to the insurance limit. FDIC also claims that bank failures are rare nowadays due to high financial standards required by FDIC. If there is an unprecedented number of bank failures, the FDIC deposit insurance guarantee is solid with $48 billion in reserves to protect depositors. Additional funds can be raised by collecting more money from insured banks and by borrowing from the US Treasury.

Even if FDIC covers my deposits, won't it be a long and painful process to get paid after a bank failure? The FDIC says no. Most insurance payments are made within a few days, usually by the next business day after the bank is closed.

So if you see a great deposit account deal at a bank that has weak financials, you should consider it a risk-free investment as long as you confirm that the bank is FDIC insured and you keep your deposits under the FDIC insurance limits.

4.55% 6-Month CD Deal in Austin Texas read and submit comments for this post

The American Bank of Commerce (ABC Bank) is offering a 4.55% APY 6-Month CD. The minimum deposit requirement is $10K and the maximum limit is $250K. It also requires opening either a checking, savings or money market account. There's a 30-day interest penalty for early withdrawals. This CD special is a 90-day special that'll last till February 14, 2006. It's only available to Austin residents and is not advertised on the bank's website. Call the bank's Austin number, 512-391-5500, for details.

The bank offers a free checking with only a $100 minimum deposit requirement. There's no minumum balance requirement and no monthly fee.

The bank has 11 Texas branches in Austin, Lubbock, Wolfforth and Plano. It also has two branches in Colorado Springs and Pueblo, Colorado. ABC Bank has a 4/5 star rating from Bankrate.com (sound).

High Interest Rate Checking Account Deals read and submit comments for this post

Meadows Credit Union is offering 4% APY on its Savy Checking account with $5K of new money along with direct deposit. The rate is guaranteed to last to June 30, 2005. The rate goes down to 2.50% without direct deposit.

Meadows has a physical branch at Arlington Heights, Illinois where you can visit, and it's also a member of the CU Service Center Network. Meadows is one of the few credit unions which has easy eligibility requirements. Actually, it has the easiest. Having an email address qualifies you for membership (Refer to my previous post about Meadows and other credit unions with easy eligibility requirements.)

A high-interest rate checking account may be useful for those who keep a large average balance to pay off many expenses. You might not want to constantly transfer money to and from high-yield savings accounts. Also, the transfers can take a day or two to go through. If you average $5K in your checking account during the year, a 4% checking account will pay $200 per year.

Other High Interest Checking Accounts

There are other high interest checking accounts that have been around for awhile. One of the highest is from Presidential Bank. It also has a 4% APY checking account. The 4% applies only to the first $25K. One important note about Presidential is that its rates are not promotional rates. Presidential has offered very high checking account rates for years. The rate on Meadow's Savy Checking account could go way down next July. Some advantages of Meadows' checking account over Presidential's include free checks and rebates of ATM fees from other banks.

Three other banks with high-interest rate checking accounts include EverBank, ebank and AmericanBank. Their checking account rates are only around 3% but none of them have direct deposit requirements.

EverBank's FreeNet Checking offers interest rates between 3.01% and 3.40% APY (depending on balance). In addition, it offers an introductory 3-month rate of 4.50% APY. It does offer some rebates for ATM surcharges, but it doesn't offer free checks.

ebank's 3% ePremium Checking has many of the same perks as Meadows. In addition, ePremium Checking customers get a 0.25% rate bonus on CDs. With this rate bonus, a 1-year ebank CD currently has a rate of 4.85% APY with only a $1K minimum deposit requirement.

AmericanBank's 3% American e-Checking doesn't offer free checks. Also, you don't get any CD rate bonuses. AmericanBank has two nice features not offered by the other high-interest-checking banks. It freely offers SecurID Token devices as an extra layer of internet banking security. Also, it has a nice referral program that's similar to ING Direct's program.

Several Banks Raise CD Rates read and submit comments for this post

Corus Bank and UmbrellaBank just recently increased the rates about 0.10% on their short term CDs. The new rates at Corus Bank for 6-month and 1-year CDs are 4.55% and 4.84% APY ($10K minimum). The new rates for the same terms at UmbrellaBank are 4.50% and 4.80% APY ($1K minimum). KeyDirect is also offering a 4.50% APY 6-month CD ($5K minimum). Perhaps we'll see these banks offering 1-year 5% CDs before the end of the year.

Signs That Fed Rate Hikes May End read and submit comments for this post

The minutes from the last Federal Reserve meeting were released yesterday and indicate that the Fed may be preparing to end its rate hikes. It was mostly hints of a change rather than any timetable. Rate hikes will likely occur at the next few meetings, but groundwork is being discussed for ending the rate-rise cycle. After the release of the minutes yesterday, the markets interpreted the news as the beginning of the end of the Fed's rate hikes. Stocks rose and the Treasury yields of all durations retreated (more from CNN).

So how much can we expect saving account rates to rise next year? Should some of the money in your high yield savings accounts be switched over to CDs? When interest rates increased as much as they did this year, savings accounts like from EmigrantDirect made CDs look like bad choices. This might change next year. In future posts I'll look at ways to evaluate these kinds of decisions.

5% 30-Month CD at Ohio CU read and submit comments for this post

Glass City Federal Credit Union is offering a special 30-month CD with a rate of 5.00% APY. The minimum deposit requirement is $10K and it must be new to the credit union.

Glass City's main office is in Maumee, Ohio. It also has branches in Bowling Green and Toledo.

The field of membership includes all those who live, work, worship or attend school in the Ohio counties of Lucas, Wood, Fulton and Ottawa.

This is not as good as the short-term 5% CDs that I listed yesterday. However, it's still a high rate compared to most CDs with terms under 3 years. The best 2.5-year CD rate currently listed by Bankrate.com is 4.90% APY from Assurance Partners Bank and M&T Bank, NA.

$101 Checking Related Bonuses at a St. Louis Bank read and submit comments for this post

First National Bank of St. Louis is offering up to $101 in bonuses for opening a free checking account and then signing up for several services. There are 9 services each with a bonus ranging from $10 to $25 for a total of $101. The services include direct deposit ($25), credit card ($25), e-statements ($10), billpay ($10), automatic savings ($11) and automatic payments ($11). The complete list and requirements are available in this rules document (pdf).

The free checking account only requires $50 to open and has no monthly fees or minimum balance requirements. Also it has free unlimited check writing. This basic checking account earns no interest.

The bank also has some decent CD specials. It's offering a 4.35% 13-month CD with a minimum deposit requirement of $1K.

In addition to St. Louis, First National Bank has branches in several cities around Missouri including Clayton, Chesterfield, Creve Coeur, O'Fallon, Des Peres and Wildwood.

5.09% 1-year CD at State Bank of India read and submit comments for this post

Please see these latest posts on State Bank of India for recent information, and please refer to the bank's website for the latest official rates.

The US operations of the State Bank of India (SBI) has some very good rates on 6-month and 1-year CDs. The 6-month CD has a rate of 4.63% APY and the 12-month CD has a rate of 4.89% APY. The minimum required deposit for both is only $1K for US residents. You can get higher interest rates on the CDs with higher deposits. For over $50K, the 6-month and 12-month rates are 4.73% and 4.99%. For deposits over $95K, the rates are 4.84% and 5.09%. The full list of conventional CDs and rates are listed at this page.

SBI has decent money market account rates. To avoid a monthly maintenance fee, a balance of $2.5K is required for US residents. Deposits below $25K earn 3.71% APY. SBI also offers some simple checking accounts.

SBI has branches in New York and Chicago. It seems to be open to any US resident. However, I wasn't able to get any information on the online banking system. For those who can't visit the branches, deposits would have to be made by check and sent through the mail.

Is this bank legitimate? Is it safe?

It seems to be FDIC insured. The FDIC's database does list the three State Banks of India (one in Chicago, one in New York and one in Los Angeles). Only the SBI (California) has a website that's listed in the FDIC's database.

Bankrate.com only lists SBI (California). It does have a decent 4/5 star rating (sound).

The contact page describes SBI (California) as a subsidiary of the State Bank of India. One thing that I found strange on the bank's contact page is the email addresses for the Chicago, LA, and Washington offices. They are using Yahoo, MSN and ATT email services.

Wikipedia states that SBI is the largest bank in India, and the largest in the world if measured by the number of branch offices and employees. In the external links section of the article, the website link to the US operations of SBI (www.statebank.com) is provided.

For those interested in this bank, I would recommend more research. It's probably similar to other foreign banks with US operations like HSBC and ING. But I would like to see a better website along with the website listed at the FDIC.

15-Month 5% CD at a Boston Bank read and submit comments for this post

East Boston Savings Bank is offering 5.0% APY on a 15-month CD. There's a $5K minimum deposit requirement. Also, it requires the customer to have a Together Account which means that the customer must have a money market account with either a checking or savings account.

The highest rate on the money market account is only 3.04% APY for balances over $50K. The minimum required balance without a $8 monthly fee is $2.5K. The interest rate for this balance is only 1.06%.

The bank offers a free checking account which only requires $10 to open and has no minimum balance requirements or monthly fees.

The certificates of deposit are available to any US resident, however the money market and checking accounts are only available to people who live or work in Massachusetts.

East Boston Savings Bank has branches in several Massachusetts cities including East Boston, Lynnfield, Melrose, Peabody, Revere, Saugus, and Winthrop.

5.10% 12-Month CD at Georgia CU read and submit comments for this post

Clarke Community Federal Credit Union is offering a special 12 month CD with a rate of 5.10% APY. There's a minimum deposit requirement of $10K. The offer ends November 30, 2005.

Clarke Community FCU's field of membership includes all those who live and work in Athens-Clarke County Georgia.

Hopefully, we'll start seeing more and more 5%+ 12-month CDs in the next few months.

5% 9-Month CD at a California Bank read and submit comments for this post

Vineyard Bank is offering a promotional 9-month CD with a rate of 5.00% APY. It also has a 6-month CD with a rate of 4.75% APY. Both have a minimum required deposit of $10K. The money must be new to the bank, and customers must be from California. There's a $95K deposit limit without secondary products (which includes checking, savings or money market accounts), and for those millionaires, there's a $5M maximum deposit limit with a secondary product. The details of this promotion is available at the bank's rates info file (pdf).

Like the Chicago bank in my last post, the interest rates for this bank's standard accounts and CDs are low. The highest rate on the money market account is only 3.65% on balances of over $100K. So it might not be a bank that you would want for the long term.

This bank has branches in several cities in California including San Diego, Manhattan Beach, Irwindale, Irvine, and Chino.

5% 24-Month CD in a North Chicago Bank read and submit comments for this post

First Bank of Highland Park has two CD specials. The first is a 2-year CD with a rate of 5.00% APY. The second is a 12-month CD with a rate of 4.75% APY. Both have a minimum balance requirement of $5K and are for new accounts only.

The interest rates are low for this bank's standard CDs and accounts. So it might not be a bank that you would want to use for the long term. It does have a Prime Savings Account that pays 4.59% on money above $50K and 4.33% above $25K. However, money below $25K earns only 1.01%. Even if you have over $50K to invest, it's not as good as it first appears. Only the amount over $50K earns 4.59%. The balance between $25K and $50K only earns 4.33% and most importantly the balance up to $25K only earns 1.01%. So the blended APY on $100K is only 3.62%.

First Bank of Highland Park has two branches in the north part of Chicago.

Why the Low Long-Term CD Rates read and submit comments for this post

Bankrate.com now lists 12 banks with 1-year CDs with rates of 4.70% or higher. It only lists 13 banks with 5-year CDs with rates of 5.00% or higher. These days you don't get much of a premium for a term that's 4 years longer.

This WSJ article provides some insights into this interest rate environment. Last week the difference between 2-year and 10-year Treasury notes was only 0.08% which is down from 0.30% in September. Its historical average is 0.75%. This current flattening of the yield curve may be a sign of an economic downturn. The Fed's rate hikes have resulted in higher short-term interest rates. The worries in the bond market have kept the long-term rates low. This flat yield curve may then put additional pressure on the economy due to its effect on bank profits and homeowners' expenses.

Checking Account Deal at an Indiana Bank read and submit comments for this post

Lake City Bank is offering $25 for opening its Simply Better Free Checking account. In addition, you can get $25 for the first direct deposit, $25 for activating a Lake City Bank VISA credit card, and $25 for opening a Lake City Bank Home Equity Line of credit. These additional services must be activated within 45 days of account opening. The details are provided in this PDF info sheet.

The Simply Better Free Checking account looks like a new type of account from this bank. Its checking account page lists 5 different checking accounts but not this specific one. The info sheet states that the Simply Better Free Checking account has unlimited check writing with no minimum balance and no monthly maintenance fee.

Lake City Bank has branches in several cities in northeast Indiana including Fort Wayne, Auburn, Goshen, Elkhart and Akron.

This might be a good deal for those in Indiana looking for a free checking account.

Banking Deal Summary for Nov 19th read and submit comments for this post

I've added a new bank to the list. It's Western Financial Bank (WFB), and it currently has the highest no-minimum money market account of 4.25% APY. There are a few things about this money market account that could be improved such as its partial ACH bank-to-bank transfer system (only deposits can be initiated online). Also, it doesn't provide any refunds of surcharges when using other banks ATMs. In addition to the money market account, WFB also offers checking accounts and CDs. The CD rates are currently pretty weak. Refer to this post for more info about WFB.

For all the other banks, rates continue to trend upward. The Self Help Credit Union (SHCU) had a 0.26% increase in its money market account. It's now at 3.66% APY. GMAC Bank increased its money market account from 4% to 4.05%. Corus Bank's money market account for deposits under $100K inched closer to 4%.

ING Direct increased its 6-month and 12-month CD rates by 0.10%. Several 6-month CDs had increases of 0.05%. SHCU remains on top with a 4.68% 6-month CD and a 4.90% 12-month CD. For banks, Corus is the leader with a 6-month CD of 4.45% and a 12-month CD of 4.75%. However, I confirmed this week that you can get an extra 0.25% on ebank's CDs if you have an ePremium Checking account. With this extra amount, ebank's 6-month CD becomes 4.60% and its 12-month CD becomes 4.85% (more at this post).

In the list below I've added MMA next to the rates that are from money market accounts. Most of these money market accounts have checking writing and ATM cards. Online savings accounts usually lack both of these.

The rates listed below are in APY. No minimum balances are required unless noted. Previous weekly summaries are available for Nov 12th, Nov 5th, Oct 29th, Oct 22nd, Oct 15th and Oct 8th.

As of November 19, 2005

Savings/Money Market Accounts:

• Western Financial Bank - 4.25% MMA, offers checking, my post
• UmbrellaBank.com - 4.15% MMA (min $1K), offers checking, my post
• Presidential - 4.12% (min $5K, only first $35K receives this rate), offers checking, my post
• GMAC Bank - 4.05% MMA (min $500), offers checking
• CapitalOne/Costco - 4.02% MMA (min $5K, Costco members only, $25 deal for exec. members)
• HSBC - 4.00%, offers checking, (rate history)
• EmigrantDirect - 4.00%, my post, ($10 signup bonus), (rate history)
• MyBankingDirect - 4.00% MMA (min $5K), my post
• Corus Bank - 3.98% MMA (min $10K to open)
• UFB Direct - 3.80% MMA, offers checking, my post
• CapitalOne - 3.75% (MMA has same rate, but with checks and ATM. $100 min.)
• Self-Help Credit Union - 3.66% MMA (min $500), my post
• VirtualBank - 3.55% (min $100), offers checking, my post
• ING Direct - 3.50%, my post ($25 deal), (rate history)
• MetLife Bank - 3.50% MMA (min $5K), my post ($50 deal)
• NetBank - 3.36% MMA ($500 min), requires checking, my post ($175 deal)
• ebank - 3.30% MMA ($1K min, rate for $10K-25K balance), offers checking

6-Month Certificates of Deposit:

• Self-Help Credit Union - 4.68% (min $500), my post
• Corus Bank - 4.45% (min $10K)
• GMAC Bank - 4.40% (min $500)
• UmbrellaBank.com - 4.40% (min $1K)
• VirtualBank - 4.40% (min $10K)
• ebank - 4.35% (min $1K), 4.60% for ePremium checking customers
• NetBank - 4.35% (min $1K), my post ($25 CD deal)
• ING Direct - 4.10%
• Western Financial Bank - 3.75% ($100 min)

12-Month Certificates of Deposit:

• Self-Help Credit Union - 4.90% (min $500), my post
• Corus Bank - 4.75% (min $10K)
• GMAC Bank - 4.70% (min $500)
• UmbrellaBank.com - 4.70% (min $1K)
• VirtualBank - 4.70% (min $10K)
• NetBank - 4.65% (min $1K), my post ($25 CD deal)
• ebank - 4.60% (min $1K), 4.85% for ePremium checking customers
• MetLife Bank - 4.51% ($1K min)
• Western Financial Bank - 4.40% ($100 min)
• ING Direct - 4.35%

18-Month Certificates of Deposit:

• CapitalOne/Costco - 4.74% (min $5K, Costco members only)

Saving Accounts at Local Credit Unions

• 5.12% money market account (California)
• 4.25% no-minimum savings account (New York)

CD Specials at Local Credit Unions/Banks

• 5.96% 60-month / 4.67% 6-month CDs (Michigan)
• 5.90% 15-month / 5.12% 8-month CDs (Illinois)
• 5.50% 60-month / 5.00% 30-month CDs (Chicago)
• 5.25% 7-month CD (Kentucky)
• 5% 15-month CD (Georgia)
• 5% 19-month / 4.8% 10-month CDs (Chicago)

CD Alternatives

• New I Bond Rate, I Bonds as CD Alternatives

Technorati Tags: banks, banking, money, personal finance

ING Direct CD Increases - Nov 19th read and submit comments for this post

ING Direct slightly increased rates on most of its CDs today. The largest increase was made to the 6-month and 12-month CD. Both went up by 0.10%. Rates on all other terms except the 60-month increased by 0.05%. The 60-month CD remained the same. Below is a listing of the new and old rates

CD Term   APY
6 month   4.10% (up from 4.00%)
9 month   4.20% (up from 4.15%)
12 month  4.35% (up from 4.25%)
18 month  4.45% (up from 4.40%)
24 month  4.70% (up from 4.65%)
30 month  4.75% (up from 4.70%)
36 month  4.75% (up from 4.70%)
48 month  4.80% (up from 4.75%)
60 month  4.85% 

These CD rates are still lower than those at other top banks. At least these rates are more competitive than the rate of ING's Orange Savings Account which remains at 3.50% and is more than 0.50% lower than savings accounts at many banks.

ING's CDs have two advantages over many other banks. First, just like the savings account, the CDs have no minimum deposit requirements. Second, the CDs can be easily opened online and funded with money from either your Orange Savings Account or from your linked checking accounts.

Refer to this post for links of previous ING-related posts.

30-Month 5% CD at a Chicago Bank read and submit comments for this post

Mutual Bank is offering 5.00% APY for a 30-month CD. Also, it has a 5-year CD with a rate of 5.50% APY. The other CDs with terms of 1-year or longer are okay but not near the top. Its 6-month and 9-month CDs have low rates below 4%. The certificates of deposit have a $5K minimum deposit requirement.

Mutual Bank also has very competitive money market rates. It's offering 4.55% APY on its Premium Unique Money Market account. There is one little requirement: a deposit over $1M. This is probably not for the typical saver. However, the rates for lower deposits aren't bad. Deposits of between $5K and $75K earn 4.00% APY. Deposits between $75K and $150K earn 4.15% APY.

The Perfect Free Checking account is available with no minimum balance requirements and no monthly service charges. Plus, the first 50 printed checks are free.

The only problem with this bank is that it's only in the Chicago area. From the website it's not apparent if an account can be opened by people in other states.

No-Minimum Money Market Account at 4.25% read and submit comments for this post

Western Financial Bank is the first bank to offer 4.25% APY in a no-minimum money market accout. Its Online Money Market Plus is guaranteed through the year. The maximum deposit allowed is $100K.

This money market account originally required $5K to open. Sometime this year it was changed to only $1.

WFB offers a partial ACH transfer system. You can set up links to accounts at other banks to deposit money into this money market account. However, according to this Fatwallet thread, you can't initiate ACH transfers out. To tranfer out online requires ACH initiation from another bank like USAA. I guess they only want to make it easy for you to add money...

As is typical with money market accounts, it offers ATM access and check writing privileges. However, there are no refunds of surcharges from ATMs of other banks. Also, according to that Fatwallet thread, an order of 30 checks cost $7.50, and online bill payment is $4.95/mo.

WFB has just recently been in the top-money-market-account club. Before October 30th, its MMA rate was only 3.55%. It moved up to 3.75% on October 30th and to 4.00% on November 11th.

WFB is based in Irvine, California. It's rated 4/5 stars (sound) from Bankrate.com.

$5000 Cash Bonus for a CD? read and submit comments for this post

United Community Bank is offering a unique type of CD. It's called the UCB Bright Future CD. Here's a summary of how it works. More details are availabe at the bank's website.

Initial Deposit: $500, $1K, $2,5K or $5K

10-Year Term

Additional Required Deposits: For each of the next nine years, a deposit equal to the initial deposit selected above is required.

Cash Bonus: If you make the nine consecutive yearly deposits equal to your initial deposit, UCB will pay you a cash bonus that will match your initial deposit at maturity.

Interest: The interest rate is equal to the 1-year certificate of deposit and will change annually on each anniversary date of your Bright Future CD to the current One-Year CD rate.

So if you choose a $5K Bright Future CD and continue to add $5K for the next 9 years, UCB will pay you a $5K interest bonus at maturity.

The bank's webpage lacks some details on early withdrawal penalties. It does have the following small print:

Penalty may be imposed for early withdrawl and bonus will not apply. Certificate cancelled if required annual deposit is not made.

To avoid the chance that you may miss an annual deposit, it does say that you can make an annual deposit in excess of the required deposit and that amount above may be carried over to meet next year's requirement.

Is this a good deal?

The first thing to consider is to compare this CD vs. investing in the top one-year CDs at other banks for 10 years. For example, UCB's current 1-year CD rate is 3.80% APY. This is about 1% lower than the top 1-year CD available. If you assume that UCB's future CD rates will always be about 1.0% lower than the best 1-year CDs available, you can do a simple comparison.

In the example, I'll assume investing $1000 annually in the UCB Bright Future CD vs. $1000 annually in the best 1-year CD available nationally. I'll assume a UCB rates will always be 4% and I'll assume the top 1-year CD rates will always be 5%.

After 10 years, the Bright Future CD will have a value of about $12,486. Then the bonus will add another $1,000 for a total of $13,486. The one-year top CD investment plan would have a total value of $13,207 without any bonus. The Bright Future CD beats the 1-year CD plan by $279.

In the end you may come out a little ahead with the Bright Future CD. However, you had to live with withdrawal limitations for 10 years. It might also be useful to compare the Bright Future CD with a 1-to-5 year CD laddering technique. One good point with this type of bonus system is that it's a form of interest deferral. The bonus is not received until maturity so I would think it wouldn't be taxed until then.

So the $5K bonus seems legitimate, however, it's not really easy money, and if you're not careful over the 10 years, you could lose out.

It looks like this offer is only available at UCB's branches, and UCB only has branches in Milford, Iowa and a few other Iowa cities.

19-month 5% CD at a Chicago Bank read and submit comments for this post

Delaware Place Bank has a 19-month CD special with a rate of 5.00% APY. Below is a list of all of their special certificates of depost:

Term        APY
6-month    4.00%
10-month   4.80%
19-month   5.00%

All have a minimum deposit requirement of $5K. It is also offering a savings account with a rate of 4.00% APY for balances over $50K.

Delaware Place Bank is located in Chicago, Illinois. It looks like these deals are only available at the branch.

CD or Savings Account?

How high should a CD rate be for it to be a better deal than a high-interest savings account when rates are continuing to rise? I'll try to give some rules of thumb in later posts.

Highest Low-Minimum Money Market Accounts read and submit comments for this post

There are now 3 money market bank accounts with low minimum deposit requirements and with interest rates over 4.00%. The latest bank to join this group is Giantbank.com. The interest rate of its money market account is 4.10% APY.

All 3 of these money market accounts have only a $1,000 minimum deposit requirement to earn the high rate. Unlike EmigrantDirect savings account, these money market accounts have check writing privileges. That's one of the main differences between a savings account and a money market account. Giantbank.com provides a good summary of this.

The only problem that I have with these banks is that they don't provide bank-to-bank ACH transfer capability like EmigrantDirect or ING Direct. To transfer using ACH, you'll have to initiate the ACH transfer from another bank. I wonder why this ACH transfer capability isn't yet widespread.

The top money market account remains at UmbrellaBank with a rate of 4.15%. UmbrellaBank.com also has what appears to be the best online banking website. The one drawback is that it doesn't have a good financial rating from Bankrate.com (only 2/5 stars). The other two banks have ratings of 4/5 stars.

Below is the summary of the top 3 banks. All rates are in APY.

• 4.15% - UmbrellaBank.com, $1K min, checks, ATM rebates, CDs:1-year: 4.70%, 3-year: 4.90%, Background: Internet banking division of New South Federal Savings Bank based in Irondale, Alabama. Rating:2/5 stars (below industry average) Bankrate.com
  
• 4.10% - Giantbank.com, $1K min, checks, CDs: 1-year: 4.70%, 3-year: 4.80%, Background: Internet Banking Division of Landmark Bank, N.A. with headquarters in Fort Lauderdale, Florida, Rating: 4/5 stars (sound) Bankrate.com
  
• 4.08% - Assurance Partners Bank, $1K min, checks, ATM rebates, CDs: 1-year: 4.75%, 3-year: 5.00%, Background: Based in Carmel, Indiana with administrative headquarters in Bethesda, Maryland, Rating: 4/5 stars (sound) Bankrate.com
  

5.02% 18-month CD at interState Net Bank read and submit comments for this post

interState Net Bank is offering an 18-month CD with a rate of 5.02% APY. It also has a 4.80% APY 12-month CD. These certificates have a minimum deposit requirement of $1K.

interState Net Bank also has a decent money market account. Balances over $10K earn 4.00% APY. The rates go down substantially as the balance falls. A $10 monthly fee is charged on average balances under $2.5K. One perk is that the first 200 printed checks are free.

One important feature of an internet bank is the ability for ACH transfers. According to the bank's FAQ, you can transfer funds to and from a checking account through ACH.

The bank is based in New Jersey and has only been around since 2001. It only has a 2 out of 5 star rating at Bankrate.com which is below the industry average.

15-Month 5.00% APY CD at Georgia CU read and submit comments for this post

The North Georgia Credit Union is offering a 15-month special CD with the rate of 5.00% APY. The offer requires a minimum deposit of $10K with new money. I first reported on this CD back on October 26th.

The credit union also has some decent rates on its standard certificates. The 12-month, 24-month and 36-month CD rates are 4.75%, 5.00% and 5.39% APY. The minimum deposit for these are only $500.

The main office is located in Toccoa, Georgia which is near the South Carolina border.

It has a restrictive field of membership which is primarily limited to employees of about 100 companies in Stephens and Franklin Counties of Georgia.

How to Get 4.85% 1-year CD at ebank read and submit comments for this post

ebank's latest CD rates are competitive. I've confirmed that these rates do not include the 0.25% extra interest for customers with ePremium checking accounts. The following are the CD rates for ePremium checking customers:

APY     Term
4.40%   3-month
4.60%   6-month
4.85%   12-month
4.90%   18-month
5.00%   30-month

The minimum deposit requirement is $1K. The early withdrawal penalties are 90 days of interest for CDs of one year and under. CDs of over one year have a 180 day interest penalty.

ePremium checking account requires a minimum daily balance of $2.5K or an average daily balance of $5K to avoid a $10/mo fee. However, keeping $2.5K in this account isn't too bad since it currently earns 3.0% interest. There are also some nice checking account perks including no ATM fees for using any other bank's ATM and free ebank custom checks.

Note, there are two limitations on ATMs: Only 6 withdrawals per calendar month at other bank's ATMs are without any transaction fees. There's a $300 maximum daily withdrawal/purchase limit.

The only negative that I see is that there's no mention of ACH linking capability. To make a deposit requires either mailing a check, a wire transfer, or direct deposit. However, you could link an ING Direct account to the ePremium checking account and push/pull money through ING.

ebank may actually be better than EmigrantDirect for savings

Based on current rates at ebank and EmigrantDirect, you would lose 1% on at least $2.5K that's in the ePremium checking account vs. an EmigrantDirect savings account.

However, with ebank, you could gain between 0.40% to 0.85% over EmigrantDirect by having your money in short term CDs rather than a savings account.

Let's assume that the average difference over one year between an ebank CD and an EmigrantDirect savings account is 0.40%. The size of the CD to equal the money lost on ePremium checking would have to be $6250 ($2500 * 0.01 = $25, $25 / 0.004 = $6250).

So if you have the minimum in the ePremium checking account along with at least $6250 in short term ebank CDs, you'll likely come out ahead with ebank over EmigrantDirect. In addtion, you'll have free ATM access and free checks.

If you have over $100K, it's even easier to beat EmigrantDirect. ebank's ePremier Money Market is paying 4.15% APY on balances over $100K. The rates go way down, however, for smaller deposits.

5.96% 5-year CD at Michigan CU read and submit comments for this post

The Tandem Federal Credit Union has CD rates as high as 5.96% APY for 5-years. Even the shorter term CDs have very high rates. Here's a list of the current rates:

APY     Term
4.67%   6  months
4.93%   12 months
5.19%   24 months
5.44%   36 months
5.96%   60 months

There are no mention of minimum deposit requirements or early withdrawal penalties.

This credit union has a very restrictive field of membership which is primarily limited to employees of a few dozen employers in Michigan.

Thanks to the reader who informed me about this deal.

What's the Best Certificate of Deposit Term?

If you are eligible to join, you'll have to decide what is the best term. Even with the high rate of 5.96%, is it worth locking your money for 5 years? The 4.93% 1-year CD is only about one percent less. By next year, 7% CDs may be common.

The other factor to consider is the early withdrawal penalty. The typical penalty for CDs of over one year is 6 months of interest. Sometimes I've seen penalties for 5-year CDs as low as 3 months of interest. In these cases, a 5-year CD that pays one percent more interest than a 1-year CD may be worth it. If rates dramatically increase, you can always break the CD without much cost. You can then quickly recover the cost with the new higher interest rates. However, if rates don't rise fast, you're sitting pretty earning a high interest rate.

7-Month 5.25% CD in Kentucky CU read and submit comments for this post

The Fort Knox Federal Credit Union is offering a 5.25% APY 7-month CD. This credit union has been offering good short-term certificates of deposit deals for awhile. Last month I posted about their 5-month 5.00% CD special.

Their field of membership is primarily limited to those who live, work or worship in the following Kentucky counties: Boyle, Breckinridge, Grayson, Hart, Larue, Meade and Nelson.

The credit union currently has 10 branches across Kentucky with 65K members and over $415 million in assets.

Thanks to the reader who informed me about this deal.

5.90% 15-Month CD and 5.12% 8-month CD read and submit comments for this post

USA One National Credit Union is offering a special 15-month CD with a rate of up to 5.90% APY. It also is offering a 8-month CD with a rate of up to 5.12%. To get these rates requires a minimum deposit of $60K. Lower rates are offered for smaller deposits. Below is a list of rates per deposit amount:

15-Month CD
APY     Minimum Deposit
5.38%   $10K
5.48%   $20K
5.58%   $30K
5.68%   $40K
5.78%   $50K
5.90%   $60K

8-Month CD
APY     Minimum Deposit
4.59%   $10K
4.69%   $20K
4.79%   $30K
4.89%   $40K
4.99%   $50K
5.12%   $60K

Field of membership is limited to those who reside or work within a 12.5 mile radius of Homewood, Illinois. There are also other eligibility allowances based on other communities and based on employers.

For the commenter who left the note about this credit union, thanks!

5.12% Money Market Account and $120 Checking Bonus read and submit comments for this post

The American First Credit Union is offering a money market account with a rate of 5.12% APY. The rate is guaranteed till February 2006. It requires a minimum deposit of $10K with new money.

Based on rates of other accounts at this credit union, this might be just a teaser rate. Most of its CDs don't have rates this high. So there's a good chance that the rate will fall substantially next Februrary. But even considering this, it's a good deal. Just think of it as a 3-month 5.12% CD.

There's also a signup bonus for a checking account that can total $120. You can get $50 for opening a checking account with direct deposit, $25 for signing up for home banking, $25 for Bill Pay, and $20 for opening your checking account online. It looks like you can get $20 by opening either the checking or money market account online. An early account closure fee of $50 will apply if the account is closed within six months. The offer expires on December 31, 2005.

The credit union's field of membership is limited to those in Orange County, Corona and Chino Hills California.

For the commenter who left the note about this credit union, thanks!

No-Minimum Savings Account at 4.25% for NY read and submit comments for this post

An online-only credit union called RateEdge.com is offering an online savings account with a rate of 4.25% APY. Last month the rate was 4.05%. The savings account looks just like the savings accounts from EmigrantDirect or ING Direct. There's no significant minimum deposit or balance requirement (just $5.00). Also the savings account can be linked to accounts at other banks. Based on this FAQ, the linked accounts don't seem to be limited to just checking accounts.

RateEdge.com is a division of Sunmark Federal Credit Union. Unfortunately, the feild of membership is limited to those in specific counties of New York State (Albany, Rensselaer, Saratoga, and Schenectady).

If Sunmark Federal Credit Union can start an online division like this, why can't other credit unions do the same? I'm going to ask this question to the credit unions that I belong to.

Linking Online Savings Accounts read and submit comments for this post

If you want a quick way to tranfer money from your ING Direct account to EmigrantDirect, fivecentnickel.com has the details about linking your accounts from these two banks. Officially, ING Direct and EmigrantDirect state that only checking accounts are allowed to be linked. However, many have been able to link savings accounts without problems. ING Direct now allows you to add account links online without having to write a check. With this feature you can now link your EmigrantDirect account. You can then initiate transfers to and from EmigrantDirect from ING Direct.

Bank Atlantic Checking Signup Bonus read and submit comments for this post

Bank Atlantic is offering $77 gift card and a MP3 player or portable TV for opening a checking account. In addition, you can get $25 for turning in unused checks from your current bank. The offer ends November 23, 2005 and requires a minimum opening deposit of $500. It also requires Direct Deposit or ACH debit. I'm not sure what it means by ACH debit. The gift card will be mailed within 77 days after the account is opened.

The offer doesn't seem to specify which checking account can be opened. Bank Atlantic offers a few with no monthly fees and no charges per check. The small print of the offer does specify that the debit card fee is waived for the first year. There's no additional info about this fee.

Bank Atlantic has 75 branches in South Florida. One thing unique about this bank is that branches are open 7-days a week. Another perk about this bank is that it offers free coin counting.

Banking Deal Summary for Nov 12th read and submit comments for this post

There's a new leader of the money market/savings account. UmbrellaBank raised its Pot o`Gold Money Market account from 4.00% to 4.15% APY. It's now higher than Presidential's Premier Savings account which is still at 4.12% APY. I should note that Superior Savings bank still has a 4.50% APY money market account. However it has a $25K minimum balance requirement. Below that and you earn 0% interest (see post). Because of this high balance requirement, I'm not including it in my list.

The main problem with UmbrellaBank is that it doesn't have bank-to-bank ACH transfer capability like EmigrantDirect or ING Direct. However, you can use another bank to make ACH transfers. So you might want to pair UmbrellaBank with a bank like USAA Bank which has a great checking account and great online features.

Like savings account rates, CD rates continue to rise. Corus Bank's 1-year CD went from 4.65% to 4.75% APY which is now the top 1-year CD from a bank. Its 6-month CD went from 4.35% to 4.40% APY.

In addition to its money market rate increase, UmbrellaBank made significant increases to its CD rates. The 6-month CD went from 4.25% to 4.40% and the 12-month CD went from 4.50% to 4.70% APY.

The largest rate hike was at ebank which increased the 6-month CD from 4.00% to 4.35% and the 12-month CD from 4.25% to 4.60% APY. You might actually be able to get 0.25% higher on these if you also open an ePremium Checking account. This would make the 6-month and 12-month rates 4.60% and 4.85%. Just like stores that advertise prices afer the mail-in rebate, I'm wondering if ebank may be doing something similar. So I've emailed them to confirm this.

The top 6-month and 1-year CD rates available nationally continue to be from Self-Help Credit Union (SHCU). As I've mentioned in this post, a one-time $25 membership fee to its non-profit organization makes anyone eligible to join. It's important to note that SHCU's CD rates change daily. Also, a commenter made the important note that SHCU won't lock in the CD rate until your check arrives. In the last week, the CD rates have fluctuated between 4.78% and 4.92%. The other important note regarding SHCU's certificates of deposit is that you can't make an early withdrawal. You're totally locked in until maturity. Most bank CDs allow an early withdrawal with a penalty. Refer to my post for more info.

Finally, if you're lucky enough to be eligible for membership, some credit unions are offering 3-month, 6-month and 1-year CDs of 5.00% APY.

The rates listed below are in APY. No minimum balances are required unless noted. Previous weekly summaries are available for Nov 5th, Oct 29th, Oct 22nd, Oct 15th, Oct 8th and Oct 1st.

As of November 12, 2005

Savings/Money Market Accounts:

• UmbrellaBank.com - 4.15% (min $1K), offers checking, my post
• Presidential - 4.12% (min $5K, only first $35K receives this rate), offers checking, my post
• CapitalOne/Costco - 4.02% (min $5K, Costco members only, $25 deal for exec. members)
• HSBC - 4.00%, offers checking, (rate history)
• EmigrantDirect - 4.00%, my post, ($10 signup bonus), (rate history)
• GMAC Bank - 4.00% (min $500), offers checking
• MyBankingDirect - 4.00% (min $5K), my post
• Corus Bank - 3.94% (min $10K to open)
• UFB Direct - 3.80%, offers checking, my post
• CapitalOne - 3.75% (MMA has same rate, but with checks and ATM. $100 min.)
• VirtualBank - 3.55% (min $100), offers checking, my post
• ING Direct - 3.50%, my post ($25 deal), (rate history)
• MetLife Bank - 3.50% (min $5K), my post ($50 deal)
• Self-Help Credit Union - 3.40% (min $500), my post
• NetBank - 3.36% ($500 min), requires checking, my post ($175 deal)
• ebank - 3.30% ($1K min, rate for $10K-25K balance), offers checking

6-Month Certificates of Deposit:

• Self-Help Credit Union - 4.65% (min $500), my post
• Corus Bank - 4.40% (min $10K)
• UmbrellaBank.com - 4.40% (min $1K)
• GMAC Bank - 4.35% (min $500)
• ebank - 4.35% (min $1K), 4.60% for ePremium checking customers
• VirtualBank - 4.35% (min $10K)
• NetBank - 4.30% (min $1K), my post ($25 CD deal)
• ING Direct - 4.00%

12-Month Certificates of Deposit:

• Self-Help Credit Union - 4.90% (min $500), my post
• Corus Bank - 4.75% (min $10K)
• GMAC Bank - 4.70% (min $500)
• UmbrellaBank.com - 4.70% (min $1K)
• NetBank - 4.65% (min $1K), my post ($25 CD deal)
• ebank - 4.60% (min $1K), 4.85% for ePremium checking customers
• VirtualBank - 4.60% (min $10K)
• MetLife Bank - 4.41% ($1K min)
• ING Direct - 4.25%

18-Month Certificates of Deposit:

• CapitalOne/Costco - 4.67% (min $5K, Costco members only)

Short Term Special CDs

• CU Deals: 3-month 5% CD, 6-month 5% CD and 1-year 5% CD
• Very Short Term Bank/CU Specials (Oct 28th)
• Credit Union Short Term CD Specials (Oct 26th)

Longer Term CDs

• Highest Rates on Bank CDs (Oct 11th)
• Highest Rates on Credit Union CDs (Oct 13th)

CD Alternatives

• New I Bond Rate, I Bonds as CD Alternatives

Technorati Tags: banks, banking, money, personal finance

One-Year 5.00% CD Special read and submit comments for this post

I've found a 1-year 5.00% APY CD special being offered by the Point West Credit Union. It requires a $5K minimum deposit with money new to the credit union. It has branches in Portland, Oregon. Unfortunately, the field of membership is rather restrictive. You can't just live in Portland. Instead, you have to be affiliated with certain employers.

If you are eligible to join this credit union, you may be able to get this CD rate up to 5.50%. The credit union has a point system in which you can earn points for several types of activities. The points can then be redeemed for a lower loan rate or a higher certificate of deposit rate. For example, you can earn 100 points when you register for and use Bill Pay. But it takes a lot of points to get better CD rates. You need 2500 points to get a 0.25% higher CD and 5000 points to get the extra 0.50%.

Two Online Banks Now Have 3-yr 5% CDs read and submit comments for this post

The 5% CDs are popping up at more and more banks. You no longer have to settle for a 5-year term. Two online banks now have 5% APY CDs in a 3-year term. The first is Countrywide Bank which has a $10K minimum deposit. The other one is Netbank which only has a $1K minimum deposit.

You can also get a $25 Visa Gift Card by opening a Netbank CD with a term of 1-year or longer. There are also other signup bonuses at Netbank that I had mentioned in this post. Looks like Netbank has made it easier to get this CD bonus. It previously required a $10K deposit, but now it's only $1K.

Even though you can get 5%, a 36-month CD may be a bit long in this rising interest-rate environment. Netbank's 1-year CD rate has also just recently been increased and is now at 4.65% APY.

Principal Bank $50 Bonus read and submit comments for this post

Principal Bank is offering a $50 signup bonus for students who open its Student Package Account. This requires a minimum deposit of $50 to both the checking and savings account, and you have to be either a full-time or part-time student. If the funds are not left on deposit for at least 6 months, there's a $50 account closing fee.

There's no minimum balance requirements to maintain the accounts. The interest rates are nothing special. The checking account doesn't earn any interest for balances under $2.5K. The current savings account rate is only 1.01% APY for all balances.

Principal Bank advertises that it provides 5 ways to make deposits, but it doesn't allow bank-to-bank ACH transfers.

Unlike many online banks, Principal Bank doesn't refund you when you get charged for using ATMs of other banks. However, Principal Bank is part of a network of banks known as the SHAZAM Privileged Status program. Members of this program do not assess surcharge fees.

UmbrellaBank Money Market Now 4.15% read and submit comments for this post

UmbrellaBank just increased its Pot o'Gold Money Market account from 4.00% to 4.15% APY. This account has some advantages that EmigrantDirect doesn't have. This includes check writing access and an ATM card. A big disadvantage, however, is that you can't initiate ACH bank-to-bank transfers from this account. Your initial deposit can only be done with a wire transfer or by mailing a check. Future deposits can be done by ACH transfer initiated from another bank. Refer to my previous post for more UmbrellaBank info.

Washington Mutual's ATM Policy Change read and submit comments for this post

Washington Mutual is ending its "ATMs for Everyone" policy. Starting November 17th, Washington Mutual will charge people who don't have accounts with the bank for use of its ATMs. The surcharge will be $1.50 in most states and $2 in Florida, Georgia, Illinois, Nevada, and Oregon.

If you're not a WAMU customer and want to continue using WAMU ATMs for free, you can always get a WAMU Free Checking account which doesn't have a monthly fee or minimum balance requirements. This may be what WAMU is hoping for.

You may also want to consider joining other Banks which reimburse you for ATM surcharges. USAA and Compass Bank both reimburse you for using other banks' ATMs.

23 Savings Accounts At Or Above 4% APY read and submit comments for this post

Less than two months ago EmigrantDirect became the first major bank to raise its savings account to 4.00% APY. Emigrant decided to make a large rate hike of 0.5% and pleasantly shocked many savers. It was similar to what EmigrantDirect did when it started operation in January of this year with a rate of 3.0% which was way above the savings rates of other banks (refer to chart for rate history).

In the last two months, 22 other major banks have followed. Now 4% savings is no big deal. Fatwallet now lists 23 banks with savings, money market or checking accounts at or above 4% APY. The latest one to hit 4% is CapitalOne/Costco money market which is now yielding 4.02% APY. The highest is Superior Savings with a rate of 4.50% for deposits over $25K.

Besides EmigrantDirect, only two others have no real minimum deposit requirements (HSBC and Western Financial Bank). Three banks have relatively low deposit requirements of $1K or less. These include Assurance Partners Bank ($1K), Umbrellabank ($1K), and GMAC Bank ($500). There's also two banks with checking accounts with rates of 4% or higher. These includes City National Bank and Presidential Bank (both have some limits and requirements).

5.00% 6-month CD read and submit comments for this post

Rivermark Credit Union is offering 5.00% APY on a 6-month CD. The minimum opening balance is only $500. Their field of membership is primarily limited to those who live or work in the following 6 counties of Oregon: Multnomah, Washington, Clackamas, Polk, Yamhill and Marion.

If you can join this credit union, consider yourself lucky. This CD is much better than what's available nationally. Currently, the best 6-month certificate of deposit rate from an online bank is 4.42% APY at KeyDirect. The Self-Help Credit Union's 6-month CD rate is 4.63% APY. For more info on SCHU, refer to my previous post.

5.00% 3-month CD read and submit comments for this post

The Sperry Associates Federal Credit Union is offering a promotional 5.00% APY 3-month CD. The minimum deposit is $1K. Unfortunately, its field of membership is limited to those in Nassau County, New York or those with specific business/organization ties.

Many of the short-term CD and money market account rates that I had mentioned in this post 10 days ago are still valid including State Farm Bank's 3-month 4.25% APY CD.

But it's hard to beat the Self-Help Credit Union CD rates: 4.39% 3-month, 4.63% 6-month and 4.92% 12-month (all APY). One important point, however, is that these CDs don't allow early withdrawal. As I mentioned in this previous post, membership is open to all.

Bump-Up Bank CDs: Compass vs. CapitalOne read and submit comments for this post

Compass Bank has some decent rates on their Option Certificates of Deposits. You sacrifice a little on the interest rates but are rewarded by being allowed to bump up if rates rise without restarting your term or paying a penalty. The 2-year CD allows one bump-up and one additional deposit. The 3, 4 and 5 year CDs allow two bump-ups and two additional deposits. Here are the current rates (for Texas):

Term      APR     APY
24 Month  4.306%  4.40%
36 Month  4.497%  4.60%
48 Month  4.545%  4.65%
60 Month  4.593%  4.70%

These rates are only about 0.10% under the current rates of Compass Bank's special fixed-term CDs (for Texas).

The one concern I have with these types of CDs is whether the rates will keep pace with the other CDs. Looking at recent history, Compass is doing a good job at this. When I last posted about these CDs, the 3-to-5 year CDs have gone up by 0.45%. So those who purchased one of these CDs will have the opportunity to take advantage of the bump feature.

On the other hand, those who purchased a No Regrets CD from CapitalOne may be a disappointed. The current 3, 4 and 5 year rates are only 3.74%, 3.86%, and 4.00% APY. The interest rates on these No Regrets CDs haven't kept up. On July of last year, the PFBlog reported on these CDs. The 5-year CD rate was actually 0.33% higher than now. This has to be very frustrating for those who purchased this CD back then when you consider how much rates have risen in the last 15 months. The 4-year rate back then is about what it is now. The 3-year CD is 0.44% higher now.

Not only does CapitalOne No Regrets CDs have low rates, it also only allows one bump-up rather than two. So Compass Bank definitely has the better deal.

Banking Deal Summary for Nov 5th read and submit comments for this post

This was a busy week for new rates. After the Fed raised the funds rate to 4%, several banks followed with rate hikes of both money market accounts and CDs. In the last day both HSBC and GMAC Bank have raised their savings account rates from 3.75% to 4.00% APY. While many online banks are making 0.25% increases, ING Direct seems to want to take it slow. Thursday it raised its Orange Savings Account rate from 3.40% to 3.50%. At least ING increased its 6-month CD by 0.25%. Now it's at 4.00%.

I've updated my chart comparing the rates of EmigrantDirect, HSBC, and ING Direct for 2005. It now includes the latest rate changes. Also, I've added the Fed funds rate. I discuss more about this chart in this previous post.

In addition to all the increases in bank deposit rates, the Treasury department announced the new rates for the I Bonds on November 1st. The new composite rate is 6.73%. Unfortunately, the fixed rate went down by 0.2% to 1.0%, apparently to compensate for the very high inflation component.

Finally, I've added a new bank to the list. Actually, it's not a bank but a credit union called the Self-Help Credit Union (SHCU). Unlike most credit unions, this one is open to residents of all states. Its field of membership only requires being a member of a non-profit organization which has a one-time membership fee of $25. The notable aspect of SHCU is its very high CD rates. Currently, the 6-month and 12-month CD rates are 4.63% and 4.92%. For more info on SHCU refer to my Thursday and Friday posts.

The rates listed below are in APY. No minimum balances are required unless noted. Previous weekly summaries are available for Oct 29th, Oct 22nd, Oct 15th, Oct 8th, Oct 1st and Sept 24th.

As of November 5, 2005

Savings/Money Market Accounts:

• Presidential - 4.12% (min $5K, only first $35K receives this rate), offers checking, my post
• HSBC - 4.00%, offers checking, my post ($35 deal)
• EmigrantDirect - 4.00%, my post, ($10 signup bonus)
• GMAC Bank - 4.00% (min $500), offers checking
• UmbrellaBank.com - 4.00% (min $1K), offers checking, my post
• MyBankingDirect - 4.00% (min $5K), my post
• Corus Bank - 3.96% (min $10K to open)
• CapitalOne/Costco - 3.95% (min $5K, Costco members only, $25 deal for exec. members)
• UFB Direct - 3.80%, offers checking, my post
• CapitalOne - 3.75% (MMA has same rate, but with checks and ATM. $100 min.)
• VirtualBank - 3.55% (min $100), offers checking, my post
• ING Direct - 3.50%, my post ($25 deal)
• MetLife Bank - 3.50% (min $5K), my post ($50 deal)
• Self-Help Credit Union - 3.40% (min $500), my post
• ebank - 3.30% ($1K min, rate for $10K-25K balance), offers checking, my post ($50 deal)
• NetBank - 3.20% ($500 min), requires checking, my post ($175 deal)

6-Month Certificates of Deposit:

• Self-Help Credit Union - 4.63% (min $500), my post
• GMAC Bank - 4.35% (min $500)
• Corus Bank - 4.35% (min $10K)
• UmbrellaBank.com - 4.25% (min $1K)
• VirtualBank - 4.25% (min $10K)
• NetBank - 4.10% (min $1K), my post ($25 CD deal)
• ING Direct - 4.00%
• ebank - 4.00% (min $1K), 4.25% for ePremium checking customers, my post ($25 CD deal)

12-Month Certificates of Deposit:

• Self-Help Credit Union - 4.92% (min $500), my post
• GMAC Bank - 4.70% (min $500)
• Corus Bank - 4.65% (min $10K)
• VirtualBank - 4.60% (min $10K)
• UmbrellaBank.com - 4.50% (min $1K)
• NetBank - 4.45% (min $1K), my post ($25 CD deal)
• MetLife Bank - 4.41% ($1K min)
• ING Direct - 4.25%
• ebank - 4.25% (min $1K), 4.50% for ePremium checking customers, my post ($25 CD deal)

18-Month Certificates of Deposit:

• CapitalOne/Costco - 4.65% (min $5K, Costco members only)

Short Term Special CDs

• Very Short Term Bank/CU Specials (Oct 28th)
• Credit Union Short Term CD Specials (Oct 26th)

Longer Term CDs

• Highest Rates on Bank CDs (Oct 11th)
• Highest Rates on Credit Union CDs (Oct 13th)

CD Alternatives

• New I Bond Rate / I Bonds as CD Alternatives

Technorati Tags: banks, banking, money, personal finance

Updated Rate Chart and EmigrantDirect's Growth read and submit comments for this post

I received a letter from EmigrantDirect yesterday informing me of their new customer service center in Westchester, New York. The letter included some interesting facts regarding the bank's growth. Here's what it said:

EmigrantDirect is the most successful and fastest growing internet bank in the country with more than 150,000 customers and over $4,500,000,000 in deposits!

This is consistent to what I read in a Wall Street Journal article that discussed the new online banks. The article stated that Emigrant Savings Bank (the parent of EmigrantDirect) had doubled its deposits this year to more than $9 billion.

Updated Chart

Here's the updated rate chart showing the latest increases from EmigrantDirect, HSBC, and ING Direct. Also, I've added the Fed funds rate changes for this year.(click to view full-size chart)

While other banks slowly increase their rates, EmigrantDirect gets publicity by making big changes. It started early this year when it began operation with a savings account rate of 3%. At that time ING Direct was only offering 2.30% and few if any banks had savings accounts over 2.50%. This got people's attention. But ING Direct and other banks caught up. For the middle part of this year, Emigrant only led ING Direct by 0.25%, and other banks started to surpass Emigrant. Then on the day of the Fed's interest rate hike last September, Emigrant hiked its savings account rate from 3.50% to 4.00%. At the time, Presidential bank was the highest at 3.87%. Several other banks were at 3.75%. Emigrant was the first to reach 4% and again it got publicity.

Another thing this chart points out is how ING Direct has changed. For the first half of the year, ING Direct stayed close to the Fed funds rate. At a few times, ING was even higher. But since July the gap between the funds rate and ING has widen. Now ING is 0.5% under. But HSBC has been doing a good job at staying with the funds rate, and Emigrant has been ahead of it for most of the year. However, during the second half, there has been several times when Emigrant has only equaled the funds rate including the present time.

Note, feel free to post the chart at your blog or forum. I only ask that you maintain the webpage name at the bottom.

ING Direct Increases CD Rates read and submit comments for this post

ING Direct increased interest rates on most of its CDs today. The largest increase was made to the 6-month term. It went from 3.75% to 4.00% APY. The other increases ranged from 0.05% to 0.15%. Below is a listing of the new and old rates:

CD Term   APY
6 month   4.00% (up from 3.75%)
9 month   4.15% (up from 4.00%)
12 month  4.25% (up from 4.20%)
18 month  4.40% 
24 month  4.65% (up from 4.50%)
30 month  4.70% (up from 4.65%)
36 month  4.70% (up from 4.65%)
48 month  4.75% (up from 4.70%)
60 month  4.85% (up from 4.80%)

So for those who don't want to change to EmigrantDirect or other online banks offering 4% savings accounts, you can get the same 4% rate with a 6-month CD. Of course you lock up your money for 6 months. Plus, you won't benefit from rising interest rates until the 6-month term is over.

Lately, it seems ING Direct has put more focus on its CDs rather than its savings account. ING Direct does make it very easy to buy CDs. It can easily be done online from funds in your Orange Savings Account or linked checking accounts. Also, there's no minimum deposit requirements. When you open a CD, they send you the official CD document in the mail.

Having many small CDs is better than one big CD. That way if you do need money, you don't have to break the one big CD which will cost you an early withdrawal penalty. Instead, just break one or a few of the small CDs for the amount that you need and leave the others untouched. Opening multiple CDs could be a hassle if paper applications and separate checks are required. With ING Direct, this can be done easily online.

Another 4% Savings at GMAC Bank read and submit comments for this post

Seems like just yesterday when everyone was shocked when EmigrantDirect's savings account rate was raised to 4%. Now it seems like almost every bank has reached 4% (except of course ING Direct). GMAC Bank is the latest online bank to raise its Money Market Savings account to 4.00% (from 3.75%). HSBC Bank made it to 4% yesterday.

In addition to the interest rate hike of GMAC's Money Market Savings account, GMAC also raised interest rates on its CDs. The new rates for the 6-month and 12-month CDs are 4.35% and 4.70% APY. GMAC also has reached the 5% rate on its certificates of deposit. The 5-year CD is now 5.00% APY. However, with only a 0.30% premium over the 1-year CD, this doesn't make much sense in a rising interest rate environment.

The advantage of GMAC Bank's Money Market Savings Account over savings accounts at EmigrantDirect and ING Direct is that it offers checks. It also has a check card that can be used as an ATM card or a debit card. There's no ATM transaction fees from GMAC Bank and they'll refund up to 4 non-GMAC Bank ATM charges per month.

The only disadvantage of GMAC Bank that I see is their $500 minimum balance requirement. You can open the money market account with only $50, but you'll be charged a monthly fee if the average balance is not over $500. The CDs also have a $500 minimumd deposit requirement. In my opinion, this is a reasonable amount.

I've heard some people voice concerns about GMAC Bank due to its ties to GM. I don't think this is a risk. GMAC Bank seems to be in strong financial shape. It currently has a 4 out of 5 star safe and sound rating from Bankrate.com. Strangely, Bankrate.com shows GMAC with 5 stars in the rate tables. Perhaps GMAC's rating did go down a bit.

HSBC Online Savings Rate Now 4.0% read and submit comments for this post

This afternoon, HSBC Bank increased the rate of its Online Savings account from 3.75% to 4.00% APY. Like the savings accounts from EmigrantDirect and ING Direct, HSBC's OnlineSavings account has no minimum deposit requirement or monthly fees.

EmigrantDirect should be worried since HSBC has better name recognition, a better website, more online banking features, and more banking products such as checking accounts. But I still don't expect EmigrantDirect will raise its rates any time soon. I think it'll wait until after it introduces its new credit card which will supposedly have the best cash back reward in the nation. HSBC actually led Emigrant during the first half of September when HSBC was at 3.75% and Emigrant at 3.50%. So I don't think Emigrant is in any rush to respond.

I can finally update my chart now. I had been waiting for HSBC's move since EmigrantDirect did its rate hike back in September. I thought HSBC might decide to make a smaller increase, but I guess with so many banks increasing their money market and savings accounts to 4% and above, HSBC decided to make the big change.

ING Direct is falling way behind. From March through September, ING Direct did a fair job of staying within about 0.25% of the top banks like EmigrantDirect. There was even a short period of time in August when ING Direct came within 0.10% of EmigrantDirect and HSBC. But even after ING's latest rate increase, ING's Orange Savings Account is 0.50% behind.

SHCU 1-year CD rate now 4.92%! read and submit comments for this post

The Self-Help Credit Union (SHCU) scored well in my first impression on their customer service. A customer service representative (CSR) responded to my email questions in less than a day.

The CSR informed me that the high CD rates are correct and are updated daily. They've already gone up since yesterday. The 12-month CD is now 4.92% APY and the 6-month CD is now 4.63%. There was also a discrepancy in the CD minimum deposit requirements. One page specified $500 and another $1000. The CSR said it's $500. As it appeared, deposits can't be done by ACH transfers. You have to use either a check or wire transfer.

SHCU CDs have two unusual features. The good feature is that you can add to the initial deposit at any point. The bad feature is that they don't allow early withdrawals. This is probably a good reason not to go beyond a 1-year term in addition to the fact that you don't give up much in the interest (4.92% vs. 5.13% APY on 5-year CD).

The CSR also confirmed the fact that a person from any state can join. Becoming a member of the Center for Community Self-Help is all that is required to be included in their field of membership.

Another thing to consider about a bank or credit union is its history on deposit rates. Is the high rate just a teaser, or does the bank consistently maintain high rates. Since I just discovered SHCU, it's difficult to know for sure. But you can get some history from the Internet Archive. The Internet Archive has old copies of SHCU interest rates page dating back to 2001. Unfortunately, it doesn't have any 2005 pages yet. I was also able to find archived interest rate pages from Corus Bank and Netbank. Below is a comparison of 6-month and 12-month CD rates between SHCU and these two banks.

Bank/CU      6-mo APY 12-mo APY

October 2003
SHCU            1.16%     1.47%
Corus Bank      1.05%     1.00%    
Netbank         1.70%     2.12%         

October 2004
SHCU            2.21%     2.38%
Corus Bank      1.85%     2.11%
Netbank         1.80%     2.40%

November 4, 2005
SHCU            4.63%     4.92%
Corus Bank      4.35%     4.65%
Netbank         4.10%     4.45%

For these years, the CD rates at SHCU have been competitive. In October 2003, Netbank had the highest rates, but SHCU did have better rates than Corus Bank. Last year, SHCU had much higher 6-month rates than both banks and was just under Netbank's 12-month rate. Now SHCU is way ahead of both banks on both terms.

The more I've looked into this credit union, the more I like it. As I've mentioned here and in my previous post, there are some drawbacks, but you can't beat their CD rates.

Very High CD Rates (4.88%/1yr) - Open to All read and submit comments for this post

I found a credit union that's open to all and has excellent CD rates. It's the Self-Help Credit Union (SHCU) headquartered in Durham, North Carolina. The short term CD rates are about 0.25% higher than the rates of the best national CDs. Even the longer term CD rates are excellent. Here's the list of the current rates:

Term       APY%
3-month   4.38    
6-month   4.61    
12-month  4.88    
24-month  4.99    
36-month  5.04    
48-month  5.09    
60-month  5.14

The minimum deposit requirements are only $500. There's also a 30-month CD paying 5.01% APY but has a minimum deposit requirement of $2,500. These CDs also have the nice feature that allows additional deposits before maturity.

Most credit unions usually have restrictive fields of membership, but SHCU seems to be open to all who join its non-profit affiliate organization with a one-time membership fee of $25.

SHCU also has a decent money market account which pays 3.40% APY for balances between $500 and $500K. You can write 3 free checks a month with this account.

You might want to open a money market account first and then fund the CDs by transfering money from the money market account. When the CDs mature, you should be able to have the money deposited to the money market account where you can write checks to withdraw the money.

Their online banking features don't seem the best. It looks like you'll have to send in the application and deposit check by the mail.

Since I have never heard of this credit union before, I was a little skeptical. I don't want someone "self helping" themselves to my money. I did a little research, and it appears legit. It's NCUA insured with assets of over $184M and has over 16K members. Also, it has a 4-star safe and sound rating from Bankrate.com.

The CD rates are so high that I find them hard to believe. I've come across some small bank and credit union webpages with rates that haven't been updated since 2000. But this SHCU page seems like it's correct. The interest rates page has a date of 11/3/2005 although it could be dynamically generated automatically. I've sent a message through their contact page to confirm these rates. I'll let you know once I've received a response.

One additional perk with SHCU is that its mission is to create ownership and economic opportunities for minorities, women, rural residents, and low-wealth families. It's listed at GreenMoney Journal under community investing. It would almost make me feel guilty in getting such high returns. Seems like SHCU could do well just by offering CDs 1% less than what it offers now.

[edit: CD min. deposit correction: 11/04/05]

Deposit Power Program Ends read and submit comments for this post

BestCashCow folks gave it a good effort but they weren't able to get a worthwhile deal on a 6-month CD in their Deposit Power Program. Here's what they said:

we have now determined that participation in the program's initial trial was simply too low to generate an offer of a six-month CD rate which would have been meaningfully better than the best rates which are now available on the open market.

There were a total of 29 pledges for a total of about $2.9M. According to a BestCashCow spokesperson, some banks stated that an offer above 4.36% (the currenty best 6-month CD rate) would require a greater and broader pool of pledged money. So a successful pledge drive would likely require not only a total pledge of much more than $2.9M but also many more pledges than 29. One of the pledges was for $1M and another was for $700K. These two pledges made up 59% of the pledges. Without these two pledges, the total would have only been $1.2M. I guess it takes a lot of cash and customers to get the attention of banks these days.

Even though their bar was at 4.36%, there's currently a publicly available 5-month CD with a rate of 4.65% APY at Affinity Bank. To get excited about a program like this, I would expect rates at least 0.5% higher than the best 6-month CD.

AmboyDirect Bank Increases Rates read and submit comments for this post

AmboyDirect increased the rates on its savings and money market account yesterday. Its eSavings account went from 3.30% to 3.56% APY for balances over $3K. Its Money Market Maximizer account went from 3.45% to 3.71% APY for balances over $30K.

The signup bonuses for these accounts are still valid. There's a $50 signup bonus for the eSavings account and an introductory 3-month 4.25% rate for the Money Market Maximizer. Refer to this post for more info.

New Online Bank Security Worries read and submit comments for this post

This MSNBC article reports on the rise of new Trojan horse programs that are being pushed onto computers without any user interaction. These new remote-access Trojans or RATware are designed to lurk in the background until users log into their online banks. The program then logs the keystrokes and sends the data to the criminals. It's basically a malicious form of a virus that can sneak on your computer through unpatched software security holes or other ways.

That's one advantage of ING's PIN Guard system. In this case, the only way for a ratware virus to steal your PIN is for it to do continuous screen captures. Unfortunately, new screen capture technology is out there.

An older MSNBC article may ease your concerns regarding these security issues. It describes how banks are required by federal regulation known as "Reg E" to refund customers when they're victims of these incidents. However, it gave some instances of banks blaming the victims. But in these instances, the customers refused to backdown and were able to have their money refunded. The most important thing to remember is to stay on top of your accounts and to notify the bank as soon as you suspect fraud. The longer you wait, the less protection you get from this regulation.

ING Direct Savings Finally Hits 3.5% read and submit comments for this post

Last night, ING Direct raised its Orange Savings Account rate from 3.40% to 3.50% APY. I had thought that ING would make another slight increase in its savings account rate this week after the Fed's latest rate hike. It's very similar to what ING did last September when it raised the savings account rate from 3.30% to 3.40% after the Fed rate hike on Septmeber 20th. I was hoping ING might make a bigger increase than 0.10%, but it looks like ING is not worrying about being close to the leaders like EmigrantDirect. To see how ING Direct interest rates have changed this year refer to this chart (Note it hasn't been updated since early September.)

I thought it might be useful to include a list of my previous ING Direct related posts as a reference for those who are might be interested in joining.

ING Direct Certificates of Deposit

• Latest CD rate change
• New CD terms and more CD info
• Info on new CD account management features

Online Security

• ING's new security feature

Speed of Moving Money

• Hold times for deposits
• Time it takes to transfer money out

Customer Service

• Time it takes for response to questions

Bonuses

• ING Direct $50 Signup Bonus
• ING Direct's referral program

Miscellaneous

• News article on ING Direct's CEO

6-Month Bank CDs Going Up read and submit comments for this post

I've noticed several increases in 6-month CDs. Both KeyDirect and Corus Bank now tie for the highest 6-month CD with a rate of 4.35% APY. Below is a list of the top 6-month CDs:

• 4.35% (up from 4.28%) $5K min, KeyDirect
• 4.35% (up from 4.30%) $10K min, Corus Bank
• 4.34% (up from 4.05%) $500 min, Ascenia Bank
• 4.33% (up from 4.00%) $1K min, E*Trade Bank
• 4.32% (up from 4.21%) $1K min, Nexity Bank

Two even better deals are available at Affinity Bank and Worlds Savings. Both are offering a special 5-month 4.65% APY CD. See my previous post for more information. Also, you can get 4.50% with Superior Savings' special Money Market account (see post).

With rising interest rates, these short term CDs may be the best option other than EmigrantDirect or Presidential savings accounts.

New CapOne/Costco and UFB Direct Money Market Rates read and submit comments for this post

CapitalOne/Costco Money Market rate increased from 3.88% to 3.95% APY last night. Also, some of the CD rates went up also. The 5-year CD is now 5.03% (another 5%+ CD).

I also noticed a change in UFB Direct's rates. The High Yield Money Market Savings remains at 3.80% APY. However, the Jumbo Money Market Account is now at 4.08% APY. It has a $50K minimum balance requirement.

It'll be interesting to see how fast banks respond to the Fed's rate hike. Of course there's no direct connection between the Fed and the banks. But there has been a trend of banks responding within a month after a Fed rate hike.

I'm still waiting on ING Direct's next rate hike....

Another 4.65% 5-month CD read and submit comments for this post

World Savings Bank started offering a 5-month 4.65% CD to select customers last week. As I mentioned in this post, World Savings didn't advertise this promotional rate to the general public, but if you call and mention this CD, they seem to be willing to honor it.

Now Affinity Bank is offering this same 4.65% APY 5-month CD. Unlike World Savings, it is being advertised to the general public on their website. There is a $10K minimum deposit requirement. The small print of this promotion states that it's available for new money only with a $100,000 maximum per household and is only for a limited time.

Affinity Bank has 6 branches in the following California cities: San Francisco, Irvine, Camarillo, Pacific Palisades and Ventura. If you live in another state, it looks like you can still open an account. The bank does have the open-account application online, but it has to be printed and mailed along with the initial deposit check.

Fed Ups Rates, How Fast Will Banks Respond? read and submit comments for this post

The Fed did what everyone expected and raised interest rates 0.25% today to 4.00%. In addition, the Fed continued to use the term measured pace in describing its expectation for future changes. So it looks likely we'll see quarter-point moves in the next meetings on December 13, 2005 and January 31, 2006.

Now the question is how fast will banks respond. Immediately after the last rate hike by the Federal Reserve, EmigrantDirect raised its savings account rate from 3.50% to 4.00%. Unfortunately, EmigrantDirect didn't do the same today. As I mentioned in this post, it's my opinion that EmigrantDirect won't raise its savings account rate anymore this year. Based on its rate history this year, EmigrantDirect seems to prefer fewer rate changes.

One of the few banks that did make changes today is Corus Bank. Corus Bank constantly tweaks its rates so it's probably not directly tied to the Fed. Its money market account for balances under $100K increased from 3.92% to 3.96% APY. Also its CD rates increased. The 6-month CD went from 4.30% to 4.35% APY; the 12-month CD went from 4.60% to 4.65% APY.

My guess is that ING Direct will soon make another increase in its Orange Savings Account rate. Perhaps it'll finally reach 3.50% this week.

New I Bond Fixed Rate Only 1% read and submit comments for this post

This morning the Bureau of the Public Debt issued new earnings rate for the I Bond. As predicted last month, the inflation component is 5.70%. Unfortunately, the fixed rate was reduced from 1.2% to 1.0%. This gives a new composite rate of 6.73%.

The Savings Bond expert Dan Pederson (author of Savings Bonds: When to Hold, When to Fold and Everything In-Between) had predicted the fixed rate would fall since the inflation component rate was going up so much this time. His theory was that the Treasury Department would adjust the fixed rate to offset the inflation component. When other similar investments are only paying 5% or less, there's no need to offer I Bonds at rates over 7%. Looks like his theory was correct.

Another Savings Bond expert, Tom Adams (author of Savings Bond Alert), had predicted that the fixed rate would rise. His theory was that the I Bond fixed rate would be comparable to the 5-year yields on TIPS, the Treasury's marketable security that's comparable to the I Bonds. If that were true, the I Bond fixed rate should have gone up around 0.5%. As Adams states in his lastest blog post, the Treasury slapped small investors with lower rates today even though interest rates in the open market have risen during the last 6 months.

An I Bond rate of 6.73% may sound like a great rate, but this will change every 6 months based on inflation. If inflation goes down in the next 6 months, the next inflation component of the I Bond could fall to something like 2%. Then the composite rate of I Bonds purchased over the next 6 months would only yield around 3% after May of next year. For someone planning to hold I Bonds for the long term, the new 1% fixed rate is a big disappointment. If you assume inflation rates will average 3%, the long term rates of the I Bond will only be 4%.

Back in 2000, the fixed rate was as high as 3.6%. From 2000 to 2004, the I Bond fixed rates had declined to 1%. This trend finally ended last May when the fixed rate went up to 1.2%. Based just on market interest rates, it seemed this trend would continue. Looks like the Treasury had other considerations, perhaps thinking more of keeping the I Bond rates comparable to similar investments.

So the question will be if inflation returns to a more reasonable level over the next 6 months (let's say 3%) while short term interest rates continue to rise, will the Treasury make a big increase in the I Bond fixed rate next May? A 4% I Bond rate next May would likely be much lower than similar investments. Perhaps then they'll make a big increase in the fixed rate. So if you're looking at I Bonds for the long term it may be wise to wait to next May before purchasing them.

Refer to TreasuryDirect.gov for more information about I Bonds.

$100 Checking Account Bonus read and submit comments for this post

Washington Trust Bank is offering $100 in bonuses for opening its Freedeom Checking account and using direct deposit and online bill payment. $50 of the bonus is for direct deposit and $50 is for paying 3 bills using online banking. The minimum balance to open the account is $50.

The Freedom Checking account has no monthly service charges. ATMs are free but there doesn't seem to be any reimbursement of surcharges for using ATMS of other banks. No interest is earned in the account except for balances over $5K although even then it's only 0.10%.

The rates on the other accounts are not much better than the checking. Even the money market accounts have rates under 1%. It's definitely a bank in which you would want to link the checking to an online bank like EmigrantDirect for savings. The only exception is the bank's promotional 9-month CD which has a respectable rate of 4.25% APY.

Washington Trust has branches through out Rhode Island and in eastern Connecticut.