Banking Deal Summary for Dec 31st read and submit comments for this post

The one disappointment this last week of 2005 was the change in the short-term CD rates of the Self-Help Credit Union (SHCU). For the last two months, SHCU consistently maintained the top 6-month and 12-month CD rates. The 12-month CD rate hit 5% right before Christmas. However, on Tuesday of last week, the short term CD rates went down by as much as 0.50%. Yesterday, the 1-year CD rate was 4.70% APY and the 6-month CD rate was 4.29%. SHCU has lost its leadership.

Rates for most other banks and credit unions either had slight increases or remained the same. For savings and money market accounts, the banks that have lagged had a few increases. CapitalOne/Costco went from 4.05% to 4.26%, MetLife went from 3.50% to 3.75%, Netbank went from 3.36% to 3.52%, and ING Direct went from 3.75% to 3.80%. As for non-SHCU CDs, there were just a few small increases.

I've added a new bank to the list. It's a new online bank called FirstFedDirect. The bank's website had some troubles this month, but the bank looks solid. It has a 4.25% no-minimum savings account. Also it has some high-rate CDs.

I also added some new CDs to the list. World Savings has a 6-month CD with a rate of 4.86% APY. This CD is only available at the bank's branches and not online. The Pentagon Federal Credit Union made some big rate increases to its long-term CDs. The new rates for the 3, 4, 5 and 7-year CDs are 5.50%, 5.50%, 5.75% and 6.00% APY. Like SHCU, anyone from the US can be eligible to be a member by joining an organization with a one-time small membership fee.

MMA next to the rates indicate a money market account. Most of these money market accounts have check 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 Dec 17th, Dec 10th, Dec 3rd, Nov 26th, Nov 19th and Nov 12th.

As of December 31, 2005

Savings/Money Market Accounts:

• UmbrellaBank.com - 4.40% MMA (min $1K), offers checking, my post
• GMAC Bank - 4.30% MMA (min $500), offers checking, my post
• CapitalOne/Costco - 4.26% MMA (min $5K, Costco members only, $25 deal for exec. members)
• HSBC - 4.25%, offers checking, (rate history), my post ($25 bonus)
• Western Financial Bank - 4.25% MMA, offers checking, my post
• FirstFedDirect - 4.25%, my post
• Presidential - 4.12% (min $5K, only first $35K receives this rate), offers checking, my post
• MyBankingDirect - 4.10% MMA (min $5K), my post
• CapitalOne - 4.00% (MMA has same rate, but with checks and ATM. $100 min.)
• EmigrantDirect - 4.00%, my post, ($10 signup bonus), (rate history)
• Corus Bank - 3.98% MMA (min $10K to open)
• Self-Help Credit Union - 3.86% MMA (min $500), my post
• ING Direct - 3.80%, my post ($25 deal), (rate history)
• UFB Direct - 3.80% MMA, offers checking, my post
• MetLife Bank - 3.75% MMA (min $5K), my post ($50 deal)
• VirtualBank - 3.55% (min $100), offers checking, my post
• NetBank - 3.52% MMA ($500 min), requires checking, my post ($175 deal)
• ebank - 3.30% MMA ($1K min, rate for $10K-25K balance), offers checking with ($50 bonus)

6-Month Certificates of Deposit:

• World Savings - 4.86% (min $10K), branch only, my post
• Corus Bank - 4.65% (min $10K)
• GMAC Bank - 4.60% (min $500)
• ETrade Bank - 4.56% (min $1K), my post
• FirstFedDirect - 4.52% (min $10K), my post
• UmbrellaBank.com - 4.50% (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)
• Self-Help Credit Union - 4.29% (min $500), my post
• ING Direct - 4.20%
• MyBankingDirect - 4.20% ($2.5K min)
• Western Financial Bank - 3.75% ($100 min)

8-Month Certificate of Deposit:

World Savings - 4.61% ($10K min with new funds), my post

12-Month Certificates of Deposit:

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

16-Month Certificates of Deposit:

• DCU - 5.00% (min $1K), my post

18-Month Certificates of Deposit:

• CapitalOne/Costco - 4.86% (min $5K, Costco members only)

26-Month Certificate of Deposit:

• Third Federal - 5.00% (min $500) my post

36-Month Certificate of Deposit:

• Pentagon Federal CU - 5.50% (min $1K), my post

60-Month Certificate of Deposit:

• Pentagon Federal CU - 5.75% (min $1K), my post
• Mutual Bank - 5.50% ($5K min), my post

84-Month Certificate of Deposit:

• Pentagon Federal CU - 6.00% (min $1K), my post

High Rates with Conditions - Open to All

• 10% Savings Account for kids ($500 max)
• 5.01% 3-month intro rate on checking account
• 5.00% Money Market with $30K (3-month intro rate)
• 4.50% Money Market with $25K min
• 4.00% checking account (CU that's open to all)

Checking and Saving Accounts at Local Credit Unions

• 4.50% money market account, $25K min (Pennsylvania)
• 4.25% no-minimum savings account (New York)

CD Specials at Local Credit Unions/Banks

• 6.00% 60-month / 4.72% 6-month CDs (Michigan)
• 5.65% 60-month / 5.16% 36-month CD (Virginia)
• 5.50% 12-month CD (New York)
• 5.38% 48-month CD (Ohio)
• 5.25% 25-month CD (Virginia)
• 5.13% 12-month CD (Massachusetts)
• 5.10% 13-month CD (South Florida)
• 5.10% 14-month CD (Tennessee)
• 5.10% 19-month CD (Virginia)
• 5.09% 15-month CD (Virginia/Maryland/DC)
• 5.01% 12-month CD (North Florida)
• 5% 7-month CD (Kentucky)
• 5% 12-month CD (Chicago)
• 5% 12-month CD (Oregon)
• 5% 12-month CD (Illinois)
• 5% 15-month CD (Ohio)
• 5% 15-month CD (Georgia)
• 5% 15-month CD (Massachusetts)
• 5% 18-month CD (Pennsylvania)
• 5% 18-month CD (New York)
• 5% 23-month/4.75% 14-month CD (Chicago)
• 5% 24-month CD (Ohio)
• 5% 25-month CD (Chicago)
• 5% 25-month CD (Minnesota)
• 5% 30-month CD (Ohio)
• 4.95% 18-month CD (California)
• 4.55% 6-month CD (Austin, Texas)

CD Alternatives

• I Bond Article, New I Bond Rate, I Bonds as CD Alternatives

5.01% 12-Month CD at a Florida Bank read and submit comments for this post

The America Enterprise Bank of Florida has a 1-year CD that yields 5.01% APY. Its 2, 3 and 5 year CDs have rates of 5.05%, 5.07% and 5.10% APY. The shorter term CDs are nothing special. All of these certificates of deposit have minimum opening deposit requirements of $500.

This is a small bank with one branch located in Jacksonville, Florida. It's also a new bank that only has been around since February 2004. However, the bank and its website are listed in the FDIC's Bank Find database. Also, Bankrate.com gives this bank a rating of 3 out of 5 stars (performing).

Finding the Best Bank Rates and Deals read and submit comments for this post

This post is intended to be a place where readers can let me know of bank and credit union deals they find. Many readers have left me comments or sent me emails about deals they’ve found. This is much appreciated! This help will be needed even more for the new year as it will be a busy year for me. I’m open to any bank deal although deals on deposit accounts are the easiest for me. The deal may be an exceptional CD or money market rate, or it may be a cash bonus for opening an account. I’ll include a link on the top right of this website that will always point to this post.

Just include the link to the deal in the comments of this post. If it’s a good deal that's new, I'll make a new post on it and give you credit. If you include a link to your website, I’ll include that link in the post. If you want to remain anonymous, simply comment as an anonymous user and/or email me at bankdeals at gmail dot com.

Please make sure to provide a link to the specific page of the deal at the bank’s website. If the deal is at a credit union, it would be useful to also include a link to the field-of-membership page. If the deal is not on the bank’s website, please include the source of the deal (i.e., a New York Times newspaper ad, a sign at a local bank, etc.)

Don’t worry about being absolutely sure that a deal is new and worthwhile. It’s often hard to find all the small print or to find if the deal has already been posted. One tip is to use the blogger search box at the top of the page and search this blog for the bank’s name. Another tip is that banks that offer specials often repeat similar specials in the future. So one way to find deals is to check out banks and credit unions that I mentioned in old posts.

You may find Googling for bank deals can be fun and challenging. If you’re looking for a 12-month 5% CD, you have to figure out ways to search that will exclude pages listing 5% loans or 5% 5-year CDs. Many people Google for fun at googlewhack.com. This site challenges people to find a googlewhack which is defined as a Google search for two dictionary words that result in one and only one search result. Searching for bank deals can be just as challenging, but a lot more useful.

In addition to Google, there are many websites that can be used to find the best bank deposit rates. However, none are complete. The biggest and best known is Bankrate.com. I have some problems with Bankrate.com. First, there are too many pop-ups. Second, they only include links to banks’ websites if the banks pay them, and third, they exclude credit unions and many banks. Below is a list of some of the webpages that I’ve found useful.

• FatWallet CD Thread
• FatWallet Savings/Checking Thread
• BestCashCow Savings List
• BestCashCow CD List
• Bankrate.com 1-year CD List
• Bankrate.com Savings/MMA List
• iBankDesign Checking/Savings List
• iBankDesign Bonus List
• eMoneyCentral
• BauerFinancial CD RateWatch
• CNN Money: Interest Rates

ING Direct Savings Now 3.80% read and submit comments for this post

ING Direct just made a small 0.05% increase to its Orange Savings Account rate. The new rate is now 3.80% APY. It ends the year at 0.20% below EmigrantDirect's rate. The predictions that I made last September were pretty close. I had predicted EmigrantDirect would remain at 4.0% and ING Direct would make a few small rate increases. I was a little off on my year-end rate for ING Direct. I had predicted a rate of only 3.70%.

New Years Prediction

My September's prediction regarding EmigrantDirect's rate was based on its rate history last year. It seems to make fewer increases than other banks like ING Direct. Twice last year it stood way above the rates of most other online banks. This was the case when it first started early in the year when it was offering 3%. It was repeated in September after a 0.5% increase to 4%. Both times, EmigrantDirect let the other banks catch up.

So it's about time for another major rate hike at EmigrantDirect. Perhaps the bank has so many deposits that it'll follow ING Direct and feel content to lag behind. However, it's easy for its customers to transfer their money to banks paying higher rates. So I still think EmigrantDirect will want to stay in the game. My prediction is for a 0.50% increase some time in early January. As for ING Direct, I see it continuing to make small increases, but it won't be anything to get excited about. I expect ING will be at 4.0% by early February.

EverBank Ups Checking Intro Rate to 5.01% read and submit comments for this post

EverBank raised the intro rate of its FreeNet Checking Account from 4.50% to 5.01% APY. This rate is good for the first 3 months. After the intro rate expires, you'll earn a rate between 3.01% to 3.55% based on the balance. There's a minimum opening deposit requirement of $1.5K.

There are no monthly maintenance fees except if you use the web bill payment option. In that case the $4.95 monthly fee can be avoided with a $1.5K balance.

Some additional perks of this checking account include rebates for some ATM surcharges, an online external transfer feature, and no fees for unlimited check writing. It doesn't offer free checks, but the first 50 are free.

One drawback is that the account opening process can't be done entirely online. The process seems to require you to send in the application by mail with a check or money order.

This checking account has a nice satisfaction guarantee. If your close your account within 30 days of your 3-month anniversary, EverBank will send you a check for $50. To qualify, you must have made at least 3 Web bill payments and notified EverBank of the reason for dissatisfaction.

5% 12-Month Promo CD at a Illinois Bank read and submit comments for this post

Metropolitan Bank has a promotional 12-month CD paying 5.00% APY. The minimum required deposit is $5K. The 5% rate requires opening a free checking account with direct deposit. Without the checking account, the certificate yields 4.75%. The checking account must remain open for 6 months to maintain the 5% APY.

Another perk for opening the free checking account with direct deposit is a $75 cash bonus. This checking account requires $100 to open. The bonus without direct deposit is a free cordless screwdriver. Like the CD deal, you have to keep the account open for at least 6 months to avoid a closure fee equal to the bonus.

Metropolitan Bank also has high yield money market account with a rate of 3.98% APY which is not bad for a brick-and-mortar bank. However, it requires $25K for this rate to apply. If the balance falls below $25K, the rate falls to 0.50% and a $25/month fee kicks in.

The bank has 8 branches in Illinois with 5 of the 8 in Chicago.

World Savings 4.86% 6-month CD read and submit comments for this post

World Savings Bank is offering a 6-month 4.86% APY CD special. As is typical with World Savings this special isn't advertised on its website. It was reported by this fatwallet thread. You'll have to call your local World Savings branch to see if it's available. The CD requires new money.

World Savings also has a 4.61% 8-month CD internet special that is advertised on the website. It has a minimum required deposit of $10K. There are different deals available at the branches. Branches in Texas and some other states are offering a 4.41% APY 4-month CD. The minimum deposit requirement for this 4-month certificate of deposit is $25K.

HSBC Direct Signup Bonus Received read and submit comments for this post

I can now say that the HSBC signup bonus definitely works. I just checked my HSBC Direct Online Savings Account, and the bonus has been paid. The $25 bonus appeared in my account 17 days after I applied for the Online Savings Account. Here's the brief history of my signup process:

12/03/05 - Applied for account
12/10/05 - Received user ID in the mail
12/14/05 - Received password in the mail
12/20/05 - $25 bonus deposited

A commenter also reported success and received the bonus even faster. Here is what was reported:

12/12/05 - Applied for account
12/19/05 - ID/PW letters came in mail
12/20/05 - $25 bonus deposited

For more info about opening an account at HSBC, refer to this post from last week. HSBC Direct has the best deal around for a no-minimum savings account. The 4.25% interest rate and the $25 sign-up bonus is hard to beat.

However, HSBC online banking is not perfect. The time it takes to transfer money seems too long. I initiated a transfer to my HSBC account from my external checking account on 12/20. The money was withdrawn from the checking account on 12/22. The money didn't get deposited into the HSBC savings account until 12/27. This was over the Christmas holiday so it may not be typical. However, I've read about similar delays. I'll have to try another transfer after the holidays and see how long it takes.

New High-Rate Long-Term CDs read and submit comments for this post

The Pentagon Federal Credit Union (Penfed) has just issued new rates on its CDs. The new rates on its 3-to-7 year CDs are excellent. The 36-month certificate of deposit is at 5.50% APY. The 7-year CD is at 6% APY. The minimum required deposit is $1K. Here’s a summary of the rates:

Term     APY
7 year   6.00%
5 year   5.75%
4 year   5.50%
3 year   5.50%

For comparison, the best 60-month CD listed today at Bankrate.com is 5.15% APY at ETrade.com.

Penfed is one of the few credit unions in which anyone in the nation can join. As I first mentioned in this post, all that is required to be eligible is joining the National Military Family Association which has a membership fee of $20.

Major CD Rate Changes at SHCU read and submit comments for this post

The 5% 1-year CD at the Self-Help Credit Union is already over. In fact, there has been a major change. Ever since I first found this credit union back in early November, the CD rates always stayed within about 0.10% from one day to the next. Also, the 3, 6 and 12-month CD rates were always the best in the nation. That changed yesterday. The 12-month certificate of deposit went from 5.00% to 4.60% APY. There were also big drops in the 3-month and 6-month CD. Here's a summary of the rate changes for all of the CDs:

Term     12/21  12/22  12/28
         APY    APY    APY
3  month  4.60   4.62   4.10
6  month  4.79   4.82   4.31
12 month  4.97   5.00   4.60
24 month  5.00   5.00   4.96
36 month  5.02   5.00   4.95
48 month  5.04   5.02   4.97
60 month  5.06   5.04   4.99

Perhaps SHCU's short term CDs attracted so many deposits, that SHCU decided to bring them inline with rates of other credit unions and banks. The new short term rates are now nothing special. We'll have to wait and see how these change in the future.

5.10% 13-Month CD at a South Florida Bank read and submit comments for this post

Ocean Bank is offering a special 5.10% APY 13-month certificate of deposit. It's also offering a 4.55% APY 7-month CD. Both have a minimum required deposit of $2.5K.

Ocean Bank has several branches in Miami and in other locations around South Florida. Credit for this find goes to this fatwallet thread.

5% 1-year CD Milestone read and submit comments for this post

The Self-Help Credit Union 1-year certificate of deposit finally hit 5% APY last week. The SHCU is the first financial institution (with federally insured CDs open to all) that is offering a 1-year CD that is not a special. However, it should be noted that SHCU CD rates change a little almost every day. So it may drop below 5% today. Some important points about SHCU include:

• Federally insured by NCUA
• $500 minimum deposit
• No early withdrawals are allowed
• Additional deposits can be made to a CD without changing terms
• Rate on a CD is not locked until application is processed

Refer to my previous post for more info.

FirstFedDirect's Savings Account Now 4.25% read and submit comments for this post

The new online bank FirstFedDirect increased its Internet Advantage Savings Account from 4.03% to 4.25% APY. The CD rates also increased by about 0.10%. The new 6-month and 12-month rates are now 4.52% and 4.84% APY.

The bank's website was down with a server error for several days last week. The website seems to be okay now, but there doesn't seem to be any improvements. There is still no contact information.

As I mentioned in this previous post, FirstFedDirect is a new internet division of the First Federal Bank of California. It's good to see more competition with ING Direct, EmigrantDirect, HSBC and other online banks. FirstFedDirect has a very high rate no-minimum savings account, and unlike HSBC, it offers competitive CD rates. However, it's starting a little like EmigrantDirect did last year with a weak website. When EmigrantDirect started last year, its savings account rate was about 0.5% higher than its competitors. With rates that high, it was much easier to accept the poor website.

Inside ING Direct - Why the Low Savings Account Rate read and submit comments for this post

This Bank Technology News article goes into the history of ING Direct and its CEO, Arkadi Kuhlmann. It gives some insights about why ING is not keeping up with other online banks in terms of rates.

Continued Fed rate hikes are taking a toll. In the second quarter, ING Direct earned $60.3 million-not much for a thrift its size-and had a razor-thin margin of 1.33 percent, down 62 basis points from a year ago. Kuhlmann concedes it will be difficult to maintain both profits and growth in this environment, and says he's inclined to pursue the latter.

So it looks like Kuhlmann will sacrifice being the leader in rates to preserve better profits. ING Direct is also willing to drop costly customers for the same reason. Here's what the article describes about this policy:

To promote customer homogeneity and keep costs down, ING Direct won't hesitate to "fire" customers who demand too much.
...
Kuhlmann says the company "weeds out" up to five percent of its customers each month, for violations like asking for statements via mail, contacting the call-center too often or demanding a better deal because they have a large sum of money to deposit.

Although ING Direct doesn't have the best rates and is not friendly to difficult customers, it has been successful. It's now the nation's largest standalone internet bank. But it's going to be difficult for ING Direct to continue to grow with banks like EmigrantDirect and HSBC Direct. One option for ING is to offer more products like checking accounts. Banks often use checking accounts as a way to build relationships that keep customers from leaving. However, Kuhlmann has seen more negatives than positives. Here's Kuhlmann's opinion about checking accounts:

I don't know how to create a good value proposition and make money with checking. It's the no. 1 area where you destroy goodwill from customers. Even if you offer free checking, consumers don't believe it. You ding them with late charges and fees and holds. ... They always see it as a bait-and-switch.

ING Direct may have one of the most fancy online bank websites, but that's not going to keep the customers. I hope ING Direct will at least try to keep within 0.25% of the best no-minimum saving account rates.

5.25% 25-Month CD at a Virginia CU read and submit comments for this post

Fort Belvoir Federal Credit Union is offering a special 5.25% APY CD with a term of 25 months. The minimum required deposit is $1K, and it must be money new to the credit union. The special ends January 31, 2006. There's a 180 day interest penalty for early withdrawals.

The credit union's field of membership includes all those living, working, worhipping, or attending school in Southeastern Fairfax County, North Woodbridge, and Fort Belvoir, Virginia. It's also open to all active duty or retired members of the US Armed Forces.

The credit union has one branch in Woodbridge Virginia and several in Fort Belvoir.

Opening an HSBC Online Savings Account read and submit comments for this post

Looks like the combination of 4.25% APY rate, no minimum balance requirements, and a $25 bonus is triggering a lot of people to sign up for the HSBC Direct Online Savings Account. The MyMoneyBlog has a detailed description of the sign-up process. It's almost identical to my experience. The nice thing about the process is that you don't have to mail in anything (for most cases). The bad thing about the process is that you must wait for at least 2 letters from HSBC before you can log in (one with your login id and one with your temporary password). The last of the two letters took 12 days to arrive.

After you log in, you have to enroll for the bank to bank transfers to set up links to external accounts. The account that was used for the initial funding isn't included which is a little frustrating. To enroll, you have enter your ATM PIN number. If you haven't received this in the mail, you're instructed to call. The customer service representative can then complete the process. Finally you have to wait for another pair of trial deposits to your account. The deposits were made one business day after I enrolled.

The bank to bank transfers requires an additional password which HSBC calls a Security Key. You have to key in the password with your mouse on a virtual keyboard that's similar to ING Direct's PIN Guard. This reduces the chance that keyloggers will be able to steal your password. One nice thing about this setup is that you only have to use this Security Key to initiate a transfer, not to log in to view your account. This principle makes sense. Only require extra security steps for areas of the site where money could be lost.

Here's a list of useful references on the HSBC Direct Online Savings Account:

• FatWallet Ultimate HSBC Bank Thread
• SavingAdvice Emigrant vs HSBC Thread
• MyMoneyBlog HSBC Account Opening Process Review
• BestCashCow HSBC Thread

Password Methods for Multiple Bank Accounts read and submit comments for this post

If you've been chasing the best rates and deals at online banks, you might be getting overwhelmed at all the accounts that you have to manage. A password method can be one difficult thing to manage. Some people often use the same password with all accounts. This is fine for non-money-related accounts (like your email or newspaper), but for your money accounts, this method involves risks.

For maximum security, you want unique passwords with random characters that are changed every three months. This is not easy.

Most banks don't require you to change your passwords after a certain period of time. EmigrantDirect is one of those banks that seem to require you to change it after every 3 months. If you forget, it can be troublesome to resolve.

There are some methods that can help you come up with multiple secure passwords. This article describes a good way, but it still doesn't make it easy to regularly change your passwords.

The best method that I've come across is one that I found on this slashdot thread. In fact, I was so impressed, that I decided to create a program that can be used to implement this method. I created a new blog with instructions on how to run it. In addition, I give a detailed description about this method. The javascript program can be run just by clicking the button on the top right of the page. There's nothing to download, and nothing gets recorded by a server.

Here's the link to this new password helper blog.

I hope you find it useful.

4.30% on Top Tier of Advanta Bank's Money Market read and submit comments for this post

Advanta Bank has made some nice rate hikes on its Money Market Accounts. The 4.30% APY applies only to deposits of over $100K. However, deposits as small as $1K earn 4.15% APY.

In the previous post I had just mentioned Countrywide Bank and how it hasn't kept up on its money market rates. On the other hand, Advanta has done a good job. Back in September, its money market account was 3.66% for deposits between $10K and $50K. Now the rate is 4.20% APY.

Comparing CDs, they're pretty close for 6 and 12 month terms. For terms over 3 years, Countrywide wins. However, it should be noted that Advanta Bank has a good rate of 4.91% APY for a 24-month CD. Countrywide's rate for a 2-year CD is only 4.75% APY.

Another thing I mentioned in a September post is that Advanta Bank has the same problem as Countrywide in lacking an ACH transfer system like what ING Direct has. However, you may be able to do ACH pushes into these money market accounts with HSBC Online Savings account or other banks that allow linking to non-checking accounts. This may provide a convenient way to fund CDs at these banks.

5% 1-Year CD at Countrywide Bank? read and submit comments for this post

Countrywide Bank has been advertising in the Chicago Tribune about a 1 year 5% APY CD. This is based on reports from this fatwallet thread. There's a minimum required deposit of $10K. To get the 5%, you need to mention the promotion code CHICAGO500.

This promotion might only be available for residents in the Chicago area. The 1-year CD rate currently posted at Countrywide's website is 4.70% APY for balances between $10K and $98K. Over $98K the rate increases to 4.75% APY.

Countrywide has consistently maintained high CD rates. Countrywide is one of the few banks that is offering certificate of deposit rates of 5% and higher on terms 3-years and longer. I first posted about this back on November 11th. Netbank also had similar rates back then, but they didn't last long. Currently, only Netbank's 5-year CD yields 5% APY.

One problem that I have with Countrywide is its lack of ACH transfer system as I mentioned in this September post. Looking back at this post, it's also apparent that Countrywide's money market account hasn't kept up compared to other banks. Currently, its money market account earns 3.50% APY on deposits between $1K and $50K. Back in September, the rate was 3.45% APY. Even ING Direct has done a better job with the rates.

4.95% 18-Month CD at a California CU read and submit comments for this post

I've noticed that most of the local bank or credit union deals that I've found lately have been either in the midwest or east coast. I finally found one from the west coast.

Technology Credit Union (Tech CU) is offering 4.95% APY on a 18-month CD. The minimum required deposit is $1K. A deposit over $95K earns a 5% APY rate.

The credit union also has a CD bonus until the end of the month. Open or renew a certificate of deposit with a balance of at least $2.5K and receive a $10 gift card for your choice of Blockbuster or iTunes. If the CD is at least $100K, you have a choice of either a $100 VISA Gift card or a pair of ski passes at ski resort.

The field of membership includes those who live, work, worship or attend school in the following California counties: Santa Clara, San Mateo, Alameda, Contra Costa, Santa Cruz and San Francisco.

Tech CU is among the top 1% of the nation's largest credit unions with more that $1 billion in assets. It has 7 full-service branches in the Silicon Valley.

Banking Deal Summary for Dec 17th read and submit comments for this post

I thought there was a good chance that EmigrantDirect would raise its savings account rate after the Fed rate hike this week. But Emigrant remained at 4%, and now Emigrant is being left behind by even wider margins. HSBC raised its Online Savings Account rate from 4% to 4.25%. UmbrellaBank became the new leader in the savings/money market account rates with its increase from 4.15% to 4.40%.

This reminds me of what happened in August and early September. From my August 20th weekly summary shows, EmigrantDirect was in a similar situation as it is today with several banks with higher rates. For most of September, HSBC maintained a 0.25% lead (see chart). I'm thinking Emigrant may wait till after New Year to make a 0.50% increase. The holidays will be over, and they'll be able to get more attention then.

For CDs there wasn't much change this week. Corus and GMAC both had 0.05% increases to their 6-month CDs. The Digital Federal Credit Union brought back its 5% 16-Month CD. DCU is one of the few credit unions in which anybody in the nation can join. Ascenia Bank almost reached 5% with its 12-month CD. The rate is 4.90% APY, and it's available online.

One thing that I tried to do better this week is to separate the national deals with the local deals. I've added a few more national CD rates on top. You can live in any state to be eligible for these. The CDs and savings accounts on the bottom have local restrictions. Some credit unions may have additional eligibility requirements.

MMA next to the rates indicate a money market account. Most of these money market accounts have check 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 Dec 10th, Dec 3rd, Nov 26th, Nov 19th, Nov 12th and Nov 5th.

As of December 17, 2005

Savings/Money Market Accounts:

• UmbrellaBank.com - 4.40% MMA (min $1K), offers checking, my post
• GMAC Bank - 4.30% MMA (min $500), offers checking, my post
• HSBC - 4.25%, offers checking, (rate history), my post ($25 bonus)
• Western Financial Bank - 4.25% MMA, offers checking, my post
• Presidential - 4.12% (min $5K, only first $35K receives this rate), offers checking, my post
• MyBankingDirect - 4.10% MMA (min $5K), my post
• CapitalOne/Costco - 4.05% MMA (min $5K, Costco members only, $25 deal for exec. members)
• CapitalOne - 4.00% (MMA has same rate, but with checks and ATM. $100 min.)
• EmigrantDirect - 4.00%, my post, ($10 signup bonus), (rate history)
• Corus Bank - 3.89% MMA (min $10K to open)
• Self-Help Credit Union - 3.86% MMA (min $500), my post
• UFB Direct - 3.80% MMA, offers checking, my post
• ING Direct - 3.75%, my post ($25 deal), (rate history)
• VirtualBank - 3.55% (min $100), offers checking, my post
• 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 with ($50 bonus)

6-Month Certificates of Deposit:

• Self-Help Credit Union - 4.78% (min $500), my post
• Corus Bank - 4.60% (min $10K)
• ETrade Bank - 4.56% (min $1K), my post
• GMAC Bank - 4.55% (min $500)
• UmbrellaBank.com - 4.50% (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 - 4.20%
• MyBankingDirect - 4.20% ($2.5K min)
• Western Financial Bank - 3.75% ($100 min)

8-Month Certificate of Deposit:

World Savings - 4.61% ($10K min with new funds), my post

12-Month Certificates of Deposit:

• Self-Help Credit Union - 4.93% (min $500), my post
• Ascencia Bank - 4.90% (min $500), my post
• Corus Bank - 4.84% (min $10K)
• GMAC Bank - 4.80% (min $500)
• UmbrellaBank.com - 4.80% (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)
• ING Direct - 4.40%
• Western Financial Bank - 4.40% ($100 min)

16-Month Certificates of Deposit:

• DCU - 5.00% (min $1K), my post

18-Month Certificates of Deposit:

• CapitalOne/Costco - 4.75% (min $5K, Costco members only)

26-Month Certificate of Deposit:

• Third Federal - 5.00% (min $500) my post

60-Month Certificate of Deposit:

• Mutual Bank - 5.50% ($5K min), my post

High Rates with Conditions - Open to All

• 10% Savings Account for kids ($500 max)
• 5.00% Money Market with $30K (3-month intro rate)
• 4.50% Money Market with $25K min
• 4.50% 3-month intro rate on checking account
• 4.00% checking account (CU that's open to all)

Checking and Saving Accounts at Local Credit Unions

• 5.12% money market account (California)
• 4.50% money market account, $25K min (Pennsylvania)
• 4.25% no-minimum savings account (New York)

CD Specials at Local Credit Unions/Banks

• 6.25% 120-month CD (New York)
• 5.90% 60-month / 4.62% 6-month CDs (Michigan)
• 5.65% 60-month / 5.16% 36-month CD (Virginia)
• 5.50% 12-month CD (New York)
• 5.38% 48-month CD (Ohio)
• 5.13% 12-month CD (Massachusetts)
• 5.10% 14-month CD (Tennessee)
• 5.10% 19-month CD (Virginia)
• 5.09% 15-month CD (Virginia/Maryland/DC)
• 5% 7-month CD (Kentucky)
• 5% 11-month CD (Illinois)
• 5% 15-month CD (Ohio)
• 5% 15-month CD (Georgia)
• 5% 15-month CD (Massachusetts)
• 5% 18-month CD (Pennsylvania)
• 5% 18-month CD (New York)
• 5% 23-month/4.75% 14-month CD (Chicago)
• 5% 24-month CD (Ohio)
• 5% 25-month CD (Chicago)
• 5% 25-month CD (Minnesota)
• 5% 30-month CD (Ohio)
• 4.55% 6-month CD (Austin, Texas)

CD Alternatives

• I Bond Article, New I Bond Rate, I Bonds as CD Alternatives

5.10% 19-Month CD at a Virgina CU read and submit comments for this post

The Naval Mid-Atlantic Federal Credit Union is offering a 5.10% APY 19-month CD special. The minimum required deposit is $7.5K, and it requires money new to the credit union.

The field of membership includes those who live or work in Virginia Beach and Norfolk.

The credit union has a branch in Virginia Beach and a branch in the Norfolk Naval Base.

5.50% 12-Month CD at a New York CU read and submit comments for this post

The Fredonia Central School Federal Credit Union has some very good CD rates. For a $500 minimum deposit requirement, a 12-month CD has a rate of 5.00% APY. A jumbo certificate gets an extra 0.50% bump so the APY would be 5.50%. The minimum for a jumbo is $50K. Another good feature of these CDs is that there's only a 90 day early withdrawal penalty. The longer term CDs also have high rates. Below is a list of the current rates:

Term      $500 min  $50K min
               APY       APY
--------- -------- ---------
12 months    5.00%     5.50% 
24 months    5.10%     5.60% 
36 months    5.20%     5.70% 
48 months    5.30%     5.80%

Unfortunately, this is a small credit union with just one branch located in Fredonia, New York with a small field of membership. People who live, work, worship or attend school in the City of Dunkirk, New York and in certain other areas are eligible to join.

5% Money Market Intro Rate read and submit comments for this post

AmboyDirect increased the 3-month intro rate for its Money Market Maximizer Account to 5.00%. Here are the details:

Receive 5.00% interest for the first three months after first opening an account when you maintain balances between $30,000 and $100,000, then recieve the everyday rate - now 4.00%. Offer good until 01/15/05.

The old money market rate intro bonus was 4.25% with an everyday rate of 3.71% APY.

The good feature of the Money Market Maximizer is that there's no minimum balance requirement or fees. Also, AmboyDirect has an ACH transfer system. So you should be able to easily transfer the money to a higher rate account after the intro period is over. I don't see any mention about closing fees, but since there's no minimum balance requirement, you could just leave $1 in the account. Balances between $5K and $30K only earn 1.01% APY. Balances under $5K earn no interest. So this is not a good account for balances under $30K.

AmboyDirect also offers a $50 signup bonus for its eSavings Account which now earns 3.65% APY on balances over $3K. Balances between $300 and $3K earn only 1%, and no interest is earned for balances under $300. Just like the Money Market Maximizer, there's no minimum balance requirements or monthly fees. As is typical for savings accounts, the eSavings Account doesn't have check writing. The only way to deposit or withdraw funds is online.

Refer to my November and October posts for more info about AmboyDirect.

FirstFedDirect, a New Internet Bank read and submit comments for this post

More banks are following the lead of EmigrantDirect and starting internet divisions. The latest is FirstFedDirect. Last week First Federal Bank of California announced the opening of FirstFedDirect. Like EmigrantDirect and ING Direct, there's no minimum deposit requirements or monthly fees for the bank's online savings account called the Internet Advantage Savings Account. The current rate is 4.03% APY.

In addition to a savings account, FirstFedDirect also offers CDs which currently have some competitive rates. The rates of the 6-month and 12-month CDs are 4.42% and 4.73% APY. These rates are better than what ING Direct offers, however, FirstFedDirect has a high minimum deposit requirement of $10K for these. ING Direct doesn't have any minimum. The early withdrawal penalty for CDs at FirstFedDirect is a little bit worse than ING Direct's penatly. For both banks, CDs with terms under one year have a 3-month interest penalty. For the one year certificate of deposit, FirstFedDirect has a 6-month penalty. It's only 3-month at ING.

One small advantage of FirstFedDirect over ING Direct is that you can designate "pay on death" (pod) beneficiary at FirstFedDirect. This option is not available with ING Direct accounts.

The big question about FirstFedDirect is how good is their online banking and customer service. I can't find any telephone contact information. Neither the learn-more page or the FAQ page has any email address or telephone number. From reading their FAQs, the account linking feature doesn't seem as good or as automated as the others. To start an account, you have to mail in a check for the initial deposit. The checking account used for that deposit becomes your linked account. There's no information about adding additional linked accounts.

FirstFedDirect is going to have to do more to differentiate themselves from the other online banks. When EmigrantDirect first started, it made an impression by offering a savings account rate about 0.50% higher than the other banks. That helped overcome the newcomer status and the weak website. MyBankingDirect didn't have the best rates but offered a $25 signup bonus. New online banks are going to have to do at least one of these to make it worthwhile for people to open an account.

4.40% UmbrellaBank Money Market Account? read and submit comments for this post

UmbrellaBank.com is apparently raising its money market account from 4.15% to 4.40% APY. This new rate isn't showing up yet at Umbrella's website. However, Bankrate.com is now showing 4.38% APY. Also, an Umbrella customer reported on fatwallet that he received an email from the bank informing him about the new rate of 4.40%. As in the case with HSBC this morning, the process of updating the rate on the website doesn't seem to be an easy process for these banks. Maybe the webmasters have already started their holiday vacations. Perhaps by tomorrow the new rate will be posted, and we'll know for sure if it's 4.40% or 4.38%.

This rate increase by UmbrellaBank seems reasonable. Their last increase was from 4% to 4.15% on November 10th.

HSBC Direct or UmbrellaBank?

Besides a little higher interest rate, UmbrellaBank has some advantages over HSBC Direct. First UmbrellaBank's money market has check writing privileges. Also, UmbrellaBank offers high-rate CDs. HSBC offers CDs but the rates are not competitive (highest CD currently only pays 4.25%). The big downside with UmbrellaBank is its lack of an ACH bank-to-bank transfer system. 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. So if you want the best rates along with an easy ACH transfer system, you may want to open accounts at both banks. The other alternative is GMAC Bank which comes close to the rates at UmbrellaBank but supposedly has an easy bank-to-bank transfer system like that of HSBC.

The other disadvantage of UmbrellaBanks is the lack of a signup bonus. However, UmbrellaBank does have a $20 promo for trying online bill pay. However, you need to open a checking account and pay 10 bills over two months to qualify for the full $20 bonus.

Refer to my previous post for more UmbrellaBank info.

5% 11-Month CD at a Chicago Bank read and submit comments for this post

Builders Bank is offering a 5.00% APY 11-month certificate of deposit special (ad in pdf). The CD requires new money and a minimum deposit of $2.5K.

Builders Bank is a small bank with two branches in Chicago, Illinois.

Credit for this find goes to this Fatwallet thread.

HSBC Raises Savings to 4.25% read and submit comments for this post

HSBC Bank raised the rate of its Online Savings Account from 4.00% to 4.25% APY. This news is from a customer service representative. The website hasn't been updated yet to reflect this change. It's the first bank to respond after the Fed funds rate hike. HSBC seems intent to keep its Online Savings account rate close to the Federal funds rate. As you can see from this chart, HSBC increased the rate to 4.00% a few days after the November 1st Fed meeting which raised the funds rate to 4.00%. HSBC reached 3.75% about 3 weeks before the Fed funds rate reached 3.75% on September 20th. However, the previous two Fed funds hikes were matched by HSBC very closely.

EmigrantDirect Milestone

When will EmigrantDirect respond? From the chart I realized an important change. Yesterday was the first time this year in which EmigrantDirect's savings account rate wasn't equal or above the Federal funds rate. On September 20th when the Fed raised the funds rate to 3.75%, Emigrant made a 0.50% increase on that same day. Emigrant's rate went from 3.50% to 4.00%. At the start of the year, ING Direct was doing a good job at staying around the Fed funds rate. However, during the second half of the year, it has fallen way behind. Now, it looks like Emigrant may follow ING. Perhaps once a bank gets so many deposits, there's no incentives to stay on top.

Opening an HSBC Online Savings Account

I've just opened an Online Savings account with HSBC, and I had just logged in for the first time. I had to call customer service to set up bank to bank transfers. During the call, the representative told me about the new 4.25% rate and said that the website is in the process of being updated. So that's why this news may seem premature. In a future post, I'll describe the process of opening an Online Savings account with HSBC.

HSBC Advantages Over EmigrantDirect

Although there are a few hoops in the account opening process, HSBC clearly has many advantages over EmigrantDirect. Unlike EmigrantDirect, HSBC's ACH transfer system isn't limited to external checking accounts. It can be linked to any external account with a routing and account number, and it can be done online and verified with the two-small-deposit method. Also, there doesn't seem to be a limit on the number of linked accounts. EmigrantDirect only allows two linked accounts. ING Direct only allows 3.

One additional advantage over EmigrantDirect is a $25 signup bonus. However, this HSBC bonus isn't a publicly advertised bonus. Refer to this post for more information on this signup reward.

4.90% 12-Month CD at Ascencia Bank read and submit comments for this post

Ascenia Bank is the new leader of short-term CDs for online banks. It's offering a 4.90% APY 1-year CD and a 4.60% APY 6-month CD. These rates are up about 0.20% from what they were last week. The minimum required deposit for the CDs is only $500. Corus Bank just raised its 6-month CD to 4.60% APY, however, it has a $10K minimum deposit requirement.

Unfortunately, Ascenia's money market rates are very weak. Balances between $7.5K and $100K only earn 1.55% APY interest. Balances over $100K earn 3.25% APY.

The checking account seems like it might be okay. The interest rate is only 1% APY but there are no monthly fees or minimum balance requirements. The bank doesn't have the best ATM policy. Only the first 5 ATM cash withdrawals per month are free, and there aren't any refunds of fees charged by ATMs of other banks.

Ascenia Bank does have an electronic fund transfer capability for ACH transfers to and from other banks. However, the setup requires you to mail in a form along with a voided check from the account to which you want to link.

Opening certificates of deposit requires mailing in an application along with the deposit. Choosing to renew the CD for a different term also requires mailing in a form.

Ascencia Bank is a long-time internet bank that opened in February 1999. Its headquarters is in Louisville, Kentucky. Bankrate.com gives it 4/5 stars (sound) for financial strength.

You would think that an online bank that has been around for almost 7 years would allow you to setup and manage accounts and CDs completely online. There are too many forms that are required to be mailed. This is one area where ING Direct shines. Opening CDs at ING Direct can be done very quickly online. I now expect this capability at all internet banks.

Another Citibank $200 Checking Account Bonus read and submit comments for this post

This signup bonus from Citibank is essentially the same as what I posted back in October except that this one seems to only be for Citi card members. That old one expired in November. This new one is good until the end of January. Here's a summary of the required steps to get the $200 bonus:

• Apply for a Citibank Regular Checking account with the offer code CEW9
• Fund the account with $1.5K
• Use Citibank's billpay service to pay 2 bills a month for a year

Citibank will then give you $50 every 3 months.

Here's an important note regarding fees with this checking account:

Citibank EZ Checking package is free of monthly maintenance fees and per-check fees with 2 or more qualifying electronic bill payments from, or a direct deposit to, a Regular Checking account during the monthly statement period. Otherwise, when the $1,500 minimum balance requirement is not met, your package will be subject to a maintenance fee and a per-check fee.

Credit for this deal goes to this SlickDeals thread.

5.13% 12-Month CD at a Massachusetts CU read and submit comments for this post

Members Plus Credit Union is offering a 5.13% APY 12-month CD. This certificate of deposit special has a minimum required deposit is $500.

The credit union's field of membership includes anyone who lives, works, worships in Middlesex, Norfolk, Plymouth, and Suffolk counties of Massachusetts.

The credit union has 5 branches in Dorchester, Plymouth, Somerville and Westwood Massachusetts.

5.00% 13-Month CD at Wisconsin CU read and submit comments for this post

The Parker Community Credit Union (PCCU) is offering a special 5.00% APY 13-month CD. It requires a minimum deposit of $1K. You can get 5.10% APY if you have a checking account and additional services with PCCU. This certificate also has a bump-up feature which allows you to bump up to a higher rate once during the term and make an additional deposit of $1K or more during the term. This special ends on December 16th.

PCCU's field of membership includes those who live or work in Rock County, Wisconsin. PCCU has two branches in Janesville, Wisconsin.

Fed Lifts Rates, No Change at EmigrantDirect read and submit comments for this post

The Fed did what was expected and raised the Fed funds rate by 0.25% for the 13th straight time. However, the Fed removed the use of accommodative in its language which is a signal that the rate hikes may be coming to an end. Another 0.25% hike is still anticipated for January 31, but for the meeting in March, future markets lowered the odds of another rate hike from 66% to 60%.

Unfortunately, EmigrantDirect didn't do a repeat of the 0.5% rate increase that it did on the September 20th Fed rate hike. During the late summer, EmigrantDirect had fallen behind many other banks (see chart). Before September 20th, many banks had raised their savings account rates to 3.75% while EmigrantDirect savings account rate remained at 3.50%. Then right after the Fed did their rate hike to 3.75%, EmigrantDirect did the big rate bump.

After skipping a rate bump on the Fed's November 1st rate hike and after falling behind many other banks once again, I was hoping for a repeat of September 20th. Looks like we'll have to continue to wait. The other two times EmigrantDirect raised its savings account rate this year, it didn't immediately follow the Fed rate hike. So perhaps it'll come in the next few weeks.

Will EmigrantDirect want to stay on top of the saving account rates? Will it become like an ING Direct in which being on top is no longer a priority? If it has plenty of cash, it may not need to raise rates. But as I mentioned in this previous post, 40% of EmigrantDirect customers have other online savings accounts. It's easy to move the money. Hopefully, this competition will help keep savings account rates high.

4.50% Money Market Account at a PA CU read and submit comments for this post

The Sun East Federal Credit Union has a Premier Money Market Account that pays 4.50% APY. It requires $25K to open and the balance must be over $25K to earn interest. There's no mention of fees for low balances.

The credit union has a field of membership that includes all those who live, work or worship in parts of the Philadelphia area. There's also a long list of eligible companies and organizations.

The main office is in Aston Pennsylvania. Seven other branches are in Philadelphia, Boothwyn, Concordville, Upper Darby and Nottingham.

This Premier MMA looks very similar to the Superior Savings's money market account which offers 4.50% for balances over $25K and 0% for balances under $25K.

Another credit union offering a high-yield savings account is RateEdge.com. It's an online-only credit union with a 4.25% APY savings account with only a $5 minimum deposit requirement.

It'll be interesting to see if any of these 3 rates will go up in the next week after today's expected Fed funds rate hike.

5% 18-Month CD at a Pennsylvania CU read and submit comments for this post

The A-K Valley Federal Credit Union is offering a special 5% APY 18-Month CD. The minimum required deposit for this rate if $50K. There's a 4.75% APY 18-month certificate of deposit with a lower minimum deposit requirement of $1K.

This credit union's field of membership includes all those who live, work, worship or attend school in Pittsburgh and several communities in Pennsylvania. Also, there's a list of over 200 eligible companies.

A-K Valley FCU has branches in Pittsburgh and Lower Burrell Pennsylvania.

World Savings 4.61% 8-Month CD Special read and submit comments for this post

World Savings has a new CD special with a rate of 4.61% APY for a term of 8 months. It has a $10K minimum balance requirement with new funds only. Also, this special is available only online and not at the branches.

This 4.61% CD is higher than any 6-month or 9-month bank CD. ETrade Bank and KeyDirect are currently offering a 6-month 4.56% APY CD. Nexity Bank is currently offering a 9-month 4.57% APY CD. The Self-Help Credit Union still has the best short-term CDs. Today its 6-month CD has a rate of 4.77%.

DCU's 5% 16-Month CD Special is Back read and submit comments for this post

Digital Federal Credit Union has brought back its 5% 16-month CD special. The old special had ended in late September. One improvement over the old special is a lower minimum deposit requirement of $1K rather than $5K.

DCU is one of the credit unions that anyone in the US can join. DCU has a list of 6 associations in which anyone can join to become eligible. DCU just added the New England Chapter, PRRT&HS which is the cheapest to join with a membership fee of $12.

Fed Rate Hikes and Bank Rates - Expectations? read and submit comments for this post

The Federal Reserve is expected to raise the federal funds rate by 0.25% on Tuesday. But as this article explains, what the Fed does next year is questionable. Most economists consider it likely that the Fed will raise the rate again in its next meeting on January 31st. However, for the meeting after that (March 28th), there's much more uncertainty. The article goes through all of the economic factors that will influence this decision.

The Fed funds rate doesn't directly cause the banks to increase their savings account rates, but it does have influence as does competition among the banks. As we have seen this year, the Fed funds rate doesn't have a big influence on long-term interest rates like those on 5-year CDs. The best explanation that I've found on influences of short- and long-term interest rates is from this Franklin Templeton interest rate FAQ. Here's an excerpt:

How are short- and long-term interest rates different?

The Federal Reserve Board controls the federal funds rate. The Federal Reserve Board (Fed) has the power to raise or lower the federal funds target rate (Fed funds rate), which in turn influences the market for shorter-term securities. The Fed funds rate is the rate banks charge other banks for overnight loans. The Fed may raise the rate to keep inflation in check or lower it to stimulate the economy.

Long-term rates are market driven. Long-term interest rates, as represented by yields of the 10-year or 30-year Treasury bond, tend to move in anticipation of changes in the economy and inflation.

Which bank will be the first to respond? Perhaps GMAC Bank decided to beat EmigrantDirect by making a 0.20% increase yesterday. If EmigrantDirect wants to be on top, we should expect another 0.50% increase. Here's a look at the history of savings account rate changes by a few banks within a week after the last two Fed funds rate hikes.

Nov 1st Fed funds rate hike:

• Nov 3rd, ING Direct +0.10%
• Nov 4th, HSBC +0.25%
• Nov 5th, GMAC Bank +0.25%

Sept 20th Fed funds rate hike:

• Sept 20th, EmigrantDirect +0.50%
• Sept 23rd, ING Direct +0.10%
• Sept 26th, Presidential Bank +0.25%
• Sept 27th, VirtualBank +0.15%

Banking Deal Summary for Dec 10th read and submit comments for this post

There were several big savings account rate increases this week. GMAC Bank is now the leader of the high rate savings account. Early today it raised its Money Market Savings account rate from 4.10% to 4.30% APY. Earlier in the week, ING Direct finally made a significant increase to its savings account rate. It's now at 3.75% APY. It's still a long way from the top. Capital One Savings and Money Market account rates increased from 3.75% to 4.00% APY. This is the non-Costco version that's open to all.

There wasn't as much change with the CD rates. GMAC Bank increased its 6-month CD rate from 4.45% to 4.50%. ING Direct increased its 6-month CD rate from 4.10% to 4.20% and its 1-year CD rate from 4.35% to 4.40% APY. Short term savings and CD rates continue to rise faster than long term rates.

In the list below I've added MMA next to the rates to indicate money market accounts. Most of these money market accounts have check 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 Dec 3rd, Nov 26th, Nov 19th, Nov 12th, Nov 5th and Oct 29th.

As of December 10, 2005

Savings/Money Market Accounts:

• GMAC Bank - 4.30% MMA (min $500), offers checking, my post
• 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
• MyBankingDirect - 4.10% MMA (min $5K), my post
• CapitalOne/Costco - 4.05% MMA (min $5K, Costco members only, $25 deal for exec. members)
• HSBC - 4.00%, offers checking, (rate history), my post ($25 bonus)
• CapitalOne - 4.00% (MMA has same rate, but with checks and ATM. $100 min.)
• EmigrantDirect - 4.00%, my post, ($10 signup bonus), (rate history)
• Corus Bank - 4.00% MMA (min $10K to open)
• Self-Help Credit Union - 3.86% MMA (min $500), my post
• UFB Direct - 3.80% MMA, offers checking, my post
• ING Direct - 3.75%, my post ($25 deal), (rate history)
• VirtualBank - 3.55% (min $100), offers checking, my post
• 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 with ($50 bonus)

6-Month Certificates of Deposit:

• Self-Help Credit Union - 4.75% (min $500), my post
• Corus Bank - 4.55% (min $10K)
• GMAC Bank - 4.50% (min $500)
• UmbrellaBank.com - 4.50% (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)
• MetLife Bank - 4.25% ($1K min)
• ING Direct - 4.20%
• MyBankingDirect - 4.20% ($2.5K min)
• Western Financial Bank - 3.75% ($100 min)

12-Month Certificates of Deposit:

• Self-Help Credit Union - 4.93% (min $500), my post
• Corus Bank - 4.84% (min $10K)
• GMAC Bank - 4.80% (min $500)
• UmbrellaBank.com - 4.80% (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)
• ING Direct - 4.40%
• Western Financial Bank - 4.40% ($100 min)

18-Month Certificates of Deposit:

• CapitalOne/Costco - 4.71% (min $5K, Costco members only)

High Rates with Conditions - Open to All

• 10% Savings Account for kids ($500 max)
• 4.50% Money Market with $25K min
• 4.50% 3-month intro rate on checking account

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)
• 5.65% 60-month CD (Virginia)
• 5.50% 60-month / 5.00% 30-month CDs (Chicago)
• 5.38% 48-month CD (Ohio)
• 5.10% 14-month CD (Tennessee)
• 5.09% 15-month CD (Virginia/Maryland/DC)
• 5% 7-month CD (Kentucky)
• 5% 12-month CD (New York)
• 5% 15-month CD (New York)
• 5% 15-month CD (Ohio)
• 5% 15-month/4.75% 12-month CD (California)
• 5% 15-month CD (Georgia)
• 5% 15-month CD (Massachusetts)
• 5% 18-month CD (Missouri)
• 5% 23-month/4.75% 14-month CD (Chicago)
• 5% 24-month CD (Ohio)
• 5% 25-month CD (Chicago)
• 5% 25-month CD (Minnesota)
• 5% 26-month CD (open to all)
• 5% 30-month CD (Ohio)
• 4.56% 6-month CD (open to all)
• 4.55% 6-month CD (Austin, Texas)

CD Alternatives

• I Bond Article, New I Bond Rate, I Bonds as CD Alternatives

New ING Direct CD Rates - Dec 10th read and submit comments for this post

ING Direct slightly increased rates on its shorter term CDs today. The largest increase was made to the 6-month CD which went up to 4.20% from 4.10%. Rates on all other terms of 2-years and under went up by 0.05%. All of the longer term CD rates remain the same. As has been the case for most of this year, shorter term rates are rising faster than the longer term rates.

Below is a listing of the new and old rates

CD Term   APY
6 month   4.20% (up from 4.10%)
9 month   4.25% (up from 4.20%)
12 month  4.40% (up from 4.35%)
18 month  4.50% (up from 4.45%)
24 month  4.75% (up from 4.70%)
30 month  4.75% 
36 month  4.75% 
48 month  4.80% 
60 month  4.85% 

One tip if you purchase an ING Direct Orange CD is to choose the CD nickname that's useful. Just like the savings account, ING lets you give a nickname to a CD. This doesn't replace the account number, but is just provided as a convenience. A useful nickname would be an abbreviated maturity date along with the APY. For example, if you purchase a 6-month CD today, a nickname might be "Jun 10 2005 4p20". Note, only letters, numbers and spaces are allowed. Nicknames are shown in the account overview page, so this kind of naming convention makes it easy to get a quick summary of your CD status.

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.

The easiest way to buy an ING Direct CD is to first get an ING Direct Orange Savings account. Refer to this post to find out how you can get an extra $25 for signing up for this account.

GMAC Bank Money Market Savings Now 4.30% read and submit comments for this post

GMAC Bank made a significant increase to its Money Market Savings rate today. The rate went from 4.10% to 4.30% APY. GMAC Bank has been very aggressive in the last few months. Back on October 1st, GMAC's rate was only 0.05% higher than that of ING Direct (3.45% vs 3.40%). Now it's 0.55% over ING Direct's savings account rate. In that first week of October, GMAC increased its MMA rate to 3.75%. It hit 4% in early November after the Fed funds rate was raised to 4%, and then over the next month, GMAC made two small 0.05% increases.

If EmigrantDirect wants to be known as the bank with America's highest rate, it's going to have to do what it did back in September and make at least a 0.50% increase. It should be pointed out, however, that EmigrantDirect doesn't have any minimum deposit requirements. However, GMAC Bank's money market account's required minimum isn't bad. It only requires a $500 balance to get the full rate and to avoid a $7.50 montly service charge (fee details).

GMAC Bank also has many other perks that EmigrantDirect lacks such as check writing and ATM cards. GMAC will also refund up to 4 non-GMAC Bank ATM charges per month. Some other good points reported on this Fatwallet thread include quick account opening and an easy process of linking external accounts. The only thing GMAC Bank lacks is a signup bonus.

5.65% 5-year CD at a Virginia CU read and submit comments for this post

The Fort Lee Federal Credit Union has some very good rates on long-term CDs. The 5-year CD has a rate of 5.65% APY and the 3-year CD has a rate of 5.16%. There's a minimum required deposit of $2.5K.

The early withdrawal penalty for these certificates of deposit is 180 days of interest which makes these a much better deal than some CDs which charge a penalty equal to half of the term in interest.

The only problem with this credit union is its restrictive field of membership. It's primarily an employer based FOM. Its main branch is located in Prince George, Virginia.

5% 25-Month CD at a Minnesota CU read and submit comments for this post

The Teachers Federal Credit Union (TFCU) is offering a 5.00% 25-month CD. It has a minimum required deposit of $500 and it must be money new to the credit union. TFCU has another CD special which isn't nearly as good. That special has a rate of 4.25% APY and a term of 18 months with a minimum required deposit of $5K.

TFCU's field of membership includes anyone who lives, works, worships or goes to school in Minneapolis or St. Paul, Minnesota. It has 8 branches around the metro area of Minneapolis and St. Paul.

$75 Bonus for Checking Account at Colorado CU read and submit comments for this post

Fitzsimons Community Federal Credit Union is offering $75 bonus dividend to members who open a new checking account in December. For a change, a bonus doesn't seem to require direct deposit. The only requirement is that you perform at least 6 transactions during the first 60 days. The transactions can include debit card transactions. The rules also states that you must return this coupon to receive the bonus. I assume the coupon would be a copy of the webpage.

The rules don't specify which type of checking account qualifies so I would assume you could choose the free checking account which only has a minimum opening deposit requirement of $50.

The field of membership includes all who live, work, worship or attend school in the following Colorado towns: Aurora, Watkins, Bennett, Strasburg, or eastern Centennial. The FOM also includes employees of over a hundred companies.

The credit union has three branches in Aurora and one in Denver.

10% Savings Account for Kids read and submit comments for this post

Affinity Bank is offering the Kids Only Savings Account with a rate of 10% APY on all balances up to $500. The minimum deposit required is only $1. Balances over $500 earn the Gold Savings rate which is currently 0.40% for balances under $5K. Your child must be no older than 16, and the adult must have or open an account with Affinity Bank. The free checking account may be a good choice for the adult. It only requires $100 to open.

This seems like a good way to teach the value of savings to kids. With 10% interest, a savings of $500 will earn $50 over a year which is $30 more than what you would make at EmigrantDirect (assuming no rate changes).

Affinity Bank provides online banking and you can start the account opening process online, but it requires mailing in the application and deposit check. You can also visit the bank's branches which are in several California cities including Ventura, Camarillo, San Francisco and Irvine.

Credit for finding this deal goes to Andrea. More discussion about this account is available at this SavingAdvice thread.

5% 26-Month CD Available Online read and submit comments for this post

Third Federal Savings and Loans is offering a 26-month 5.00% APY CD. The minimum deposit requirement is $500 ($100 for IRA CD). Applications can be done online, however, it requires some additional paperwork which has to be mailed in along with the check to fund the CD.

The other CD special from Third Federal is a 4.60% APY 14-month CD. The bank also has one of the top 5-year CD rates of 5.20% APY. The bank's certificates of deposit with terms over 1 year have a 180-day interest penalty for early withdrawal.

Credit for finding this deal goes to this fatwallet thread.

World Savings Step-Up Money Market Account read and submit comments for this post

World Savings is advertising a new Step-Up II Money Market Account in the San Francisco Chronicle. It doesn't seem to be advertised at the bank's website.

If you maintain the minimum $50K balance for 12 months, your composite APY will be 4.26%. The money market account requires $50K opening deposit from another financial institution. The rate rises as follows:

Starts at 3.77%
4.01% on 02/01/06
4.31% on 05/01/06
4.56% on 08/01/06
Ends on 11/02/06

Step-up rate feature ends 11/02/06 whereupon rates are subject to change at World's discretion. Balances under $50K earn 0.51% APY, and below $2.5K earn 0.21% APY. $250K maximum per household.

This might be worth it for those who need liquidity and prefer brick-and-mortar banks. Unlike a 12-month CD, you won't be penalized if you have to withdraw the money before next November. However, if the balance falls below $50K, the rate go way down.

Credit for this deal goes to this fatwallet thread.

5% 15-Month CD at Ohio CU read and submit comments for this post

Sharefax Credit Union is offering a 5% APY 15-Month CD. This CD special requires an initial deposit of at least $5K of new money. It's valid until the end of December.

The field of membership includes all those who live, work, worship or attend school in Clermont County, Warren County and several Ohio cities and townships in Greater Cincinnati.

The credit union has four branches in Batavio, Cincinnati, Mason and Milford Ohio.

Looks like a decent credit union, however, its website is weak. It looks like it was put together by some hobbiest in the 90's. Refer to its sitemap to navigate around the site.

$150 Bonus for Money Market Account at NY CU read and submit comments for this post

The Summit Federal Credit Union is offering up to $150 bonus for opening a Money Market Account. The $150 bonus includes a $130 Wegmans gift card and a $20 cash bonus for direct deposit. This full bonus requires an initial deposit of $50K of new money. Smaller gift cards are available for smaller deposits. A $1.5K deposit earns a $10 Wegman gift card. You must open and fund the money market account by the end of December to receive the bonus. Also, you must keep the money market account active until the end of next March to avoid a closing fee equal to the bonus.

With a $10K balance, you qualify for the Premier Level. This level has several checking account perks such as up to 10 free foreign ATM transactions per month and free standard checks. The $10K balance can include balances in CDs or loans. The credit union does have some decent CD rates such as 4.40% APY for a 1-year CD.

The credit union's field of membership includes those who live, work, worship, volunteer or attend school in the New York cities of Rochester, Buffalo, Geneva, Henrietta and Amherst. Employees and retirees of over hundred companies are also included in the FOM.

Credit for this deal goes to this ibankdesign thread.

$50 Bonus for Checking at Toledo CU read and submit comments for this post

The Toledo Area Community Credit Union is offering $50 cash for opening a new personal checking account with direct deposit. The first ACH direct deposit must occur within 60 days of opening the account.

The credit union has a free checking account with no minimum balance or monthly fees, and it has unlimited check writing privileges with no per check fee. It also provides free checks for e-statement subscribers.

The credit union also has some decent CD specials which includes a 4.32% APY 9-month CD and a 4.84% APY 19-month CD..

The field of membership includes those who live, work, worship, volunteer or attend school in the greater Toledo Ohio area. This area includes Fulton County, Wood County and most of Lucas County.

Credit for this deal goes to this ibankdesign thread.

$100 Gift Card for Citibank Credit Card read and submit comments for this post

Receive 10,000 bonus points redeemable for your choice of a $100 gift card at one of several stores and restaurants when you sign up for a Citi Simplicity Rewards Card and make a purchase with the card within the first 3 months. Refer to the promo page for more details.

Credit goes to this SlickDeals thread. For those concerned with the impact to your credit score when you apply for multiple cards, there's a lot of discussion about this issue in the thread.

4.56% 6-month CD at ETrade Bank read and submit comments for this post

ETrade Bank raised the rates on many of its CDs. The best is a 4.56% APY 6-month CD. There's not much rate incentive for terms from 1 to 3 years. The 3-year CD's rate is only 0.19% higher. The 5-year CD rate is not bad at 5.15% APY. Below is a listing of all the CD rates as of December 7, 2005:

Term      APY    APR
--------  -----  -----
5   Year  5.15%  5.02%
3   Year  4.75%  4.64%
2.5 Year  4.73%  4.62%
2   Year  4.70%  4.59%
1.5 Year  4.67%  4.56%
15 Month  4.65%  4.55%
1   Year  4.63%  4.53%
6  Month  4.56%  4.46%
3  Month  4.05%  3.97%

All of these certificates of deposit have a minimum balance of $1K. You can fund the CD with an ACH transfer. The only drawback of these CDs is the early withdrawal penalty. It's equal to one-half the simple interest for the term of the CD, earned or unearned. For a 6-month CD that's only a 3-month interest penalty. But for a 5-year CD, that's a 30-month interest penalty. That's much worse than the typical 6-month interest penalty on most CDs of terms of 1-year or longer.

5% 15-Month CD at a New York CU read and submit comments for this post

Here's another holiday theme CD deal. The Capital Communications Federal Credit Union is offering a 15-month 5.00% APY CD. There's only a $500 minimum deposit requirement.

There's also a 13-month 4.50% APY CD with a $500 minimum deposit requirement. I don't know why anyone would pick the 4.50% CD. An extra 0.50% for just 2 months seems like an easy choice.

There are two other CDs with a unique feature. You can withdraw up to $1K a month without a penalty. They're called Monthly Allowance CDs. The 21-month certificate earns 4.35% APY and requires $5K minimum deposit. The 57-month certificate earns 4.75% APY and requires $15K minimum deposit. $500 has to remain in the CD to earn the APY. If the rates on these Monthly Allowance CDs were over 5%, they could be better deals than the 15-month 5% CD. But with the rates being lower, I don't see any advantage.

The field of membership includes anyone who lives, works, worships or attends school in the New York State cities of Albany, Cohoes, Mechanicville, Rensselaer, Schenectady, Troy, Watervliet or the Town of Green Island. There is also a long list of eligible employee groups.

Branches are located in Albany, Troy, Latham, Clifton Park and Niskayuna New York.

Free iPod nano Checking Account Deal read and submit comments for this post

Chase Bank is offering a free iPod nano for opening a checking account. There are several required steps, and you have to be careful to avoid fees that can ruin this deal. A summary of the steps are as follows:

• Open a Chase Premier/Select Checking account at a nearby branch with a minimum opening deposit of $1K of new money ($500 for Select Checking)
• Activate direct deposit
• Make at least 3 online bill payments to new and unique payees
• Keep the checking account active for at least 6 months

The type of checking account varies based on where you live. In Texas, it's called Premier Checking. In New York it's called Select Checking. The Premier Checking requires $15K of deposit balances to avoid a $15/month fee. The Select Checking requires $25K of deposit balances to avoid a $30/month fee. Deposit balances may include not only the checking account but also savings, money market accounts, and CDs.

According to this fatwallet thread, you may be able to avoid the monthly fees without the required balance for the first 3 months. If this is not the case, you'll have to compare the cost of 6 months of fees or the cost of keeping $15K at Chase for 6 months.

The current rate of a 6-month Chase CD is only around 3% (depending on where you live). This is about 1.5% less than what you could get on top 6-month CDs. For $15K, you would lose about $112 in interest by keeping your $15K in Chase rather than a bank paying top rates.

Instead of the iPod nano, you can get the cheaper iPod shuffle if you open a Free Checking account with Direct Deposit. This Free Checking account has no monthly fees as long as you have direct deposit active. This deal only requies a $500 opening deposit rather than $1000. According to this fatwallet thread, deposits from your ING Direct account may count as direct deposit at Chase.

I posted on other iPod bank deals in this previous post. The NetBank iPod shuffle offer is valid through the end of this month.

CapitalOne Savings Now at 4.00% read and submit comments for this post

Capital One raised its High Yield Savings (HYS) rate from 3.75% to 4.00% APY. This is the savings account open to all not just Costco members. The CapitalOne/Costco Money Market Account remains about where it was last week at 4.05% APY. Last time the CapOne HYS account had a rate increase, the Costco version followed with an increase within a few weeks. So we'll likely see the CapOne/Costco MMA getting close to 4.25% before the end of this month.

The CapOne High Yield Savings account is very similar to ING Direct, EmigrantDirect and HSBC. There are no minimum balance requirements or fees and it links to your existing checking account. Also as this fatwallet thread points out, there's no limit to the number of checking accounts that you can link. Many on this thread consider CapOne's HYS to be one of the best accounts for moving money around without restrictions and without fees.

CapOne also has a money market account with the same 4.00% rate as the HYS account. The MMA does have a $100 minimum deposit requirement to open, but it has the added benefits of check writing and ATM cards.

5.38% 48-Month CD at a Ohio CU read and submit comments for this post

GE Federal Credit Union is offering a special 48-month CD with a rate of 5.38% APY. It requires a $10K minimum deposit. There's also a bonus bump up feature, but it's only applicable for current members. If you open the certificate with new money, you may choose to bump up the rate of an existing CD by 0.50% at the time of purchase. There's also a special 9-month CD with a rate of 4.35% APY. It has the same $10K minimum deposit requirement, but it requires new money even without the bump up bonus.

A 4-year CD may be too long of a term at this time of rising interest rates even if you can get a rate of over 5 percent. One important consideration is the penalty for early withdrawal. There are no details about this penalty on the webpage. If the penalty is only 3 months of interest, a high-rate long-term CD may be worth it. If it's the typical 6 months, it may not be worth it.

At this time, the best 48-month CD listed at Bankrate.com is only 5.06% APY from Transportation Alliance Bank.

GE Federal Credit Union's field of membership is rather restrictive. It's primarily based on employment in GE and some other companies.

The credit union has branches around Cincinnati and Mason Ohio. There are also branches at GE Aircraft Engine plants in New Mexico, California andKentucky.

Online Banking Stats, Loyalty and Switching read and submit comments for this post

A study of online banking by comScore Networks not only shows the growth of online banking but also the growth of customers having multiple online savings accounts. According to the study 4.3% of consumers accessed multiple online high-yield savings accounts in September 2005. This is up from 2.2% in January 2005. 40% of EmigrantDirect customers also have accessed other online savings accounts. Probably a lot of these people are ING Direct customers. In fact, the study does show that ING Direct's share of the market declined 5.5% while EmigrantDirect's share grew 100% and Capital One grew 60%.

How Loyal Are You?

It's easy to understand why customers aren't loyal. Many times this year EmigrantDirect has been offering a savings rate 0.60% higher than that of ING Direct. When it's so easy to open up an online account, it's hard to justify sticking with the low rate bank. If ING Direct were able to keep its rates close, it would likely prevent some customers from switching. I think many people would be willing to accept a couple tenths of a percent less in rate if they get a better website and more deposit product choices.

Making It Harder To Switch

Hopefully, ING Direct and other banks will focus on better rates and not making it more difficult to switch. ING Direct, EmigrantDirect, VirtualBank and others require external linked accounts to be checking accounts and not savings accounts (although you can get around this at ING). It has also been reported that ING has blocked HSBC Online Savings account owners from linking to their ING savings accounts. There's no reason to block links to other savings accounts. The only reason that I can see is to inhibit customers from switching.

5% 12-Month CD at a New York Bank read and submit comments for this post

Flushing Savings Bank is offering a 5.00% APY 12-month CD. There's a $5K minimum deposit requirement, and it must be a new deposit. Another requirement for a non-IRA CD is that a Breakout Checking Account must be opened with at least $100. The Breakout Checking Account seems to require direct deposit to avoid fees.

Another choice for this special is a 5% APY 60-month CD with a rising rate option. This bump-up feature gives you a one-time option to raise your rate to a future 60-month CD rate. As is typical for this type of bump-up CD, the CD term remains the same after the bump-up is done.

In my opinion, even with the bump-up option, the 5% 1-year CD is a much better deal. For the bump-up feature to be useful, the bank has to keep the future CD rates competitive. This is not always the case. For example, CapitalOne has done a poor job at this with the No Regrets CD.

Flushing Savings Bank has branches in Queens, Nassau, Brooklyn and Manhattan of New York state.

Bank of America Extends Checking Bonus read and submit comments for this post

If you haven't already taken advantage of this deal, there's now plenty of time. Bank of America is offering a signup bonus of $50 for opening a checking account online. I had posted about this bonus last September. At that time the promotion's expiration date was 11/30/2005. It's now extended until 4/15/2006.

This bonus is now open to any checking account except the CampusEdge Checking account. The best deal is the MyAccess Checking account since there's no balance requirement if you have direct deposit. Based on reports from this fatwallet thread, the direct deposit requirement can be met by making deposits from ING Direct. Bank of America's regular Checking Account and Advantage Checking Accounts both have balance requirements to avoid the monthly fee.

ING Direct Savings Now 3.75% read and submit comments for this post

ING Direct increased the rate of its Orange Savings Account from 3.50% to 3.75% APY. This is the largest rate hike in ING's Savings Account since February when ING increased the savings account rate from 2.35% to 2.60%. Ever since then, rate hikes have ranged from 0.10% to 0.20% (see graph).

I'm sure many of ING Direct's customers feel that this move is long over due. Back in September when EmigrantDirect made the 0.50% increase to its savings account rate, ING Direct countered with a measly 0.10% increase. EmigrantDirect then had a 0.60% lead in the savings rate (4.00% to 3.40%). As has been the trend for this year, EmigrantDirect takes an early big lead and ING Direct and others slowly catch up.

With the FOMC meeting scheduled on December 13th and an expected hike in the Fed funds rate, the question is now will EmigrantDirect make another big increase to its savings account rate. There are now many savings and money market accounts from other banks with rates over EmigrantDirect's 4%. If EmigrantDirect wants to make a big impression like it did in January and September, it needs to do another 0.50% increase.

5% 18-Month CD at Missouri CU read and submit comments for this post

Here's another holiday gift theme CD special. It's not as good as the last one, but it's not bad. Alliance Credit Union is offering a 5% APY 18-month CD. There are no details about minimum required deposits for this special CD, however, the standard CDs have a $1K minium deposit requirement. The other special CDs being offered include a 5.09% APY 60-month CD and a 5.05% APY 37-month CD.

The field of membership includes all those who live or work in St. Charles County and St. Louis County of Missouri. There are also many employer groups and organizations in the FOM.

The credit union has branches in the Missouri cities of O'Fallon, Fenton, Hazelwood and Jennings.

5.10% 14-Month CD at Tennessee CU read and submit comments for this post

Foothills Federal Credit Union is offering a 14-month 5.10% APY CD special. There's a $1K minimum deposit requirement, and it must be a new deposit.

There's also a 18-month 4.58% APY CD special. I'm not sure why anyone would choose this over the 14-month 5.10% CD. One nice thing about these CDs is that there's only a 3-month early withdrawal penalty. The typical penalty for a certificate of deposit with a term over one year is 6 months of interest.

The field of membership is open to all who live, work, worship or attend school in Blount, Loudon or Monroe Counties of Tennessee.

The credit union has branches in Loudon and Lenoir City, Tennessee.

Bank CD Market Timing read and submit comments for this post

When should you lock into a long-term CD? Ideally, it's when interest rates have peaked. The problem is trying to predict those peaks. This article from Bankrate.com has some points to consider. One point is that longer term rates don't necessarily move in lock step with changes in short-term rates. The rates of 5-year CDs could peak long before the Fed stops their tightening cycle. If the market feels that inflation risk is being controlled, long term rates may decline. Instead of interest rate betting, the article recommends CD ladders as a way to even out the rate cycles.

Refer to my previous post about finding the best bank for CD ladders and to this post about how a CD add-to feature can help with laddering.

6% 6-Month CD at a Kentucky CU read and submit comments for this post

The University of Kentucky Federal Credit Union is offering a 6.00% APY 6-month CD. There's a minimum required deposit of $1K.

The special has a holiday gift theme so even though it says it's a limited time offer, it appears likely to last through December. Perhaps other banks and credit unions will be offering similar holiday gifts.

Most of its standard certificate of deposit and savings account rates are nothing special. It does offer a 2-year Jumbo Share Certificate with a rate of 5% APY. The required minimum deposit is $90K.

The field of membership primarily consists of students, staff, and retirees of the University of Kentucky. The credit union has 3 branches in Lexington Kentucky and one in Richmond Kentucky. Credit to this fatwallet thread for locating this deal.

Banking Deal Summary for Dec 3rd read and submit comments for this post

There were a few increases in money market account rates this week. GMAC Bank just recently raised its money market rate from 4.05% to 4.10% APY. This matches the new rate at MyBankingDirect.

The Self Help Credit Union (SHCU) made a 0.20% increase to its money market account. The rate is now 3.86%. Although the SHCU's CD rates change daily, the week ended with some new high CD rates. SHCU's 6-month CD increased from 4.66% to 4.76% APY and the 12-month CD increased from 4.84% to 4.97% APY. The longer term CDs with terms of two years and over all have rates over 5% with the 5-year CD rate at 5.12% APY. These CDs have the unique feature that allows you to add to them during the term without affecting the rate or term. I describe in this post how this feature can be used to offset interest rate uncertainty.

The only other bank to make an increases to its CD rates was GMAC Bank. Its 1-year CD went from 4.75% to 4.80% APY. I've also added the 6-month CD offered by MyBankingDirect. Its 6-month CD (now earning 4.20% APY) finally has a rate over its money market rate.

I posted on two new signup bonuses this week for these high-interest-rate national banks. The first was a $50 bonus from ebank for signing up for its ePremium Checking account. The second was a new $25 signup bonus for HSBC's OnlineSavings account.

In the list below I've added MMA next to the rates to indicate money market accounts. Most of these money market accounts have check 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 26th, Nov 19th, Nov 12th, Nov 5th, Oct 29th and Oct 22nd.

As of December 3, 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 - 4.10% MMA (min $500), offers checking, my post
• MyBankingDirect - 4.10% MMA (min $5K), my post
• CapitalOne/Costco - 4.04% MMA (min $5K, Costco members only, $25 deal for exec. members)
• HSBC - 4.00%, offers checking, (rate history), my post ($25 bonus)
• EmigrantDirect - 4.00%, my post, ($10 signup bonus), (rate history)
• Corus Bank - 3.97% MMA (min $10K to open)
• Self-Help Credit Union - 3.86% MMA (min $500), 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.)
• 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 with ($50 bonus)

6-Month Certificates of Deposit:

• Self-Help Credit Union - 4.76% (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)
• MyBankingDirect - 4.20% ($2.5K min)
• ING Direct - 4.10%
• Western Financial Bank - 3.75% ($100 min)

12-Month Certificates of Deposit:

• Self-Help Credit Union - 4.97% (min $500), my post
• Corus Bank - 4.84% (min $10K)
• GMAC Bank - 4.80% (min $500)
• UmbrellaBank.com - 4.80% (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 - 4.75% (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)
• 5.50% 60-month / 5.00% 30-month CDs (Chicago)
• 5.09% 15-month CD (Virginia/Maryland/DC)
• 5% 7-month CD (Kentucky)
• 5% 9-Month CD (North Virginia)
• 5% 12-month/4.75% 9-month CD (California)
• 5% 15-month CD (Georgia)
• 5% 15-month CD (Massachusetts)
• 5% 24-month/4.75% 12-month CD (Chicago)
• 5% 24-month CD (Ohio)
• 5% 25-month CD (Chicago)
• 5% 30-month CD (Ohio)
• 4.55% 6-month CD (Austin, Texas)

CD Alternatives

• I Bond Article, New I Bond Rate, I Bonds as CD Alternatives

$50 Bonus for Chase Checking and Direct Deposit read and submit comments for this post

Chase Bank is offering a $50 bonus when you open a Free One Checking account with direct deposit.

The Free One Checking account has no monthly service fee or minimum balance requirements if there's a monthly direct deposit. A $100 minimum opening deposit is required to receive the cash bonus, and the account must remain open for 6 months to avoid a $50 closing fee. Offer is valid through 12/31/2005.

Refer to the bottom of the promo page for all of the official details. Credit goes to this ibankdesign thread for this deal.

Free Palm for Citibank Checking read and submit comments for this post

Citibank is offering a Palm m100 Handheld for opening a checking account. This deal requires the following:

• Apply online at this link for a regular checking account with Citibank EZ Checking account package
• Fund the account with $500 by 12/31/2005
• Pay 2 bills online within 60 days of funding the account
• The Palm will be shipped within 90 days of paying the second bill online
• Offer good only for first-time Citibank checking/deposit account customers.

Refer to the bottom of the promo page for all of the official details. Note, the Citibank EZ Checking requires a $1,500 average combined balance or direct deposit to avoid a monthly fee. Credit goes to this ibankdesign thread for this deal.

Best CD Rates Available to All read and submit comments for this post

The Self Help Credit Union continues to have the best CDs in the nation, and unlike many of the credit unions that I mention, SHCU is open to people in any state (see post for more info). Almost everyday, SHCU rates are tweaked. Some days they go up and some days they go down. Over the last few weeks, there seemed to be more down days than up days. However, this week it has changed for the better. Many of today's CD rates are about 0.10% higher than the rates of last Friday. Below is a full list of the CD rates:

TERM      APR   APY
3-month   4.45  4.55
6-month   4.65  4.76    
12-month  4.85  4.97
24-month  4.89  5.01
36-month  4.92  5.04
48-month  4.96  5.08
60-month  4.99  5.12

The most important detail about these CDs is that SHCU doesn't allow any early withdrawals. However, these CDs do have one nice feature in that you can add to them during the term. This fatwallet thread brought up a good strategy for utilizing this feature. You can get a $500 5-year CD for the case where future interest rates may go down. If rates are lower 4 years from now, you essentially have a 1-year CD at this 5-year rate. You can just make additional deposits into this CD. The rate and term stays the same. For this reason it may make sense to get a few of the long-term CDs. Since you can't make withdrawals and since the long-term rates aren't much higher than the 1-year rates, it doesn't make much sense in going above the minimum required $500 deposit.

SHCU also made a significant increase to its Money Market Account. It's now at 3.86% APY (up from 3.66%). It has an ATM card and limited check writing, and like the CDs, the minimum deposit requirement is only $500.

This credit union is insured by NCUA making it as safe as any credit union. The only drawback of this credit union is a weak online banking system. You can't do ACH transfers from the account. The best choice might be to open a money market account and link it from another bank like USAA where you can initiate ACH transfers. Once the money has been transfered into the money market, you should be able to fund a CD with this money. Once the CD matures, SHCU should be able to transfer the money back to the money market. If you do this approach with a ladder of CDs, you could be getting interest rates near 5% without much reduction of liquidity.

Future Fed Rate Hikes and EmigrantDirect read and submit comments for this post

Newly released employment data shows robust employment growth for November. As this article mentions, this news makes it more likely that the Fed will continue with its rate hikes into 2006. Below is a quote from the article:

"This is the first clean reading on employment we have had since the hurricane season distortions and it is pretty encouraging. It adds to evidence that the US weathered the hurricanes pretty well," said Nigel Gault, head of US research at Global Insight. "Had we seen a weak number this would have made it more likely that the Fed would take a break from rate rising after the next 2 meetings. They are likely to want to see a few more months of clean post-hurricane data before making up their minds."

The next Fed meeting is December 13th. With another 0.25% increase in the Federal funds rate, which bank will be the first to react? It would be nice if we get a repeat of EmigrantDirect's rate hike of last September 20th.

Before September 20th, EmigrantDirect had let many of its competitors pass them on the savings account rate. Even ING Direct Orange Savings Account was within 0.20% of EmigrantDirect. Other banks had been 3.75% for over a month while EmigrantDirect remained at 3.50%. Then on the day that the Fed raised the Funds rate to 3.75%, EmigrantDirect responded with a 0.50% increase to its savings account rate. Since that day on September 20th, EmigrantDirect hasn't changed. Meanwhile, many other banks have raised savings and money market account rates to 4.00% and above. So it's time for another big move by EmigrantDirect.

5% 25-Month CD in a Chicagoland Bank read and submit comments for this post

The First National Bank of Naperville is offering a 5% APY 25-month CD. There's an initial deposit requirement of $10K, and to get the 5% rate, a Concerto Checking Account is required. Without the Concerto Checking Account, the rate is 4.80% APY.

The CD also has a "jump up" feature. If the rates go up during the term, you have a one-time option to increase the APY to the current 24-month CD. The standard 24-month certificate is only at 4.44% for a $25K minimum deposit. So it's likely that this 24-month standard CD won't exceed 5% during the 25 months.

The Concerto Checking Account has an interest rate of 3.25% APY for balances over $2.5K. There's a $15 monthly fee if the balance falls below $1.5K. Another important fee note is that all debits get charged $0.25 each. Depending on the CD balance, you might be better off with the 4.80% CD which doesn't require this checking account.

There are also other decent CD specials including a 7-month 4.40% APY CD and a 13-month 4.60% APY CD. The 13-month CD has a breakable feature which allows the withdrawal of up to 50% (maximum of $25K) of the original deposit without an interest penalty.

This 5% CD special has been going on for awhile. Back in October, the term was 29 months rather than 25.

First National Bank of Naperville is a branch of First National Bank of Brookfield. Both branches are located around Chicago, Illinois.

Free Checking Deal at Guaranty Bank read and submit comments for this post

Guaranty Bank has a free checking account called Fresh Checking with many perks and no balance requirements or monthly service fees. Some of the notable perks include: $25 direct deposit bonus, $10 for unused checks from another bank, free checks for life of account and no per check charges. This checking account doesn't provide any interest, but as Bankrate's checking account survey mentioned, one monthly fee could equal two years of earnings from a typical interest checking account. So a noninterest checking account without balance requirements or monthly fees is often a better choice than an interest-bearing checking account.

Guaranty Bank also has some respectable rates on money market accounts and certificates of deposit. The Ultimate Money Market Account currently earns 3.75% and only has a $2.4K minimum balance requirment to earn that rate. Guaranty Bank is also offering two CD specials: a 4.15% 8-month CD and a 4.40% 15-month CD. Both have a $1K minimum deposit requirement. These rates are based on Wisconsin branches and are in APY.

Guaranty Bank has 75 branches in Illinois, Wisconsin and Minnesota. Most branches are open 7 days a week.

Bank Account Aggregation Services read and submit comments for this post

Account aggregation services provide one online account which pulls in information from several of your accounts at other financial institutions. For those with many credit card, bank and brokerage accounts, this can make it easy to review all your information at one place. The most popular aggregation service is Yodlee. Many banks provide Yodlee account aggregation for free from through their online banking websites.

Apparently these aggregation services are not catching on. This article reported that Wells Fargo just announced that it'll be shutting down its online aggregation service. Citibank ended its Yodlee account aggregation service last September.

The article mentioned the concern about online security as one reason why account aggregations services are declining in popularity. Yodlee is trying to overcome these security concerns with a partnership with RSA Security. Yodlee's goal is to implement a two-factor authentication system that'll work with its aggregation system.

Security concerns were mentioned a lot on this Fatwallet thread about Yodlee and account aggregation in general. I'm not sure if the extra convenience is worth the risk.

5% 9-Month CD at N. Virgina Bank read and submit comments for this post

James Monroe Bank is offering a special 5.00% APY 9-month CD. There are not many details online at the bank's website so I contacted the bank. According to the customer service representative, the minimum required deposit is $5K. There's no specific end date for the special so it may end at any time. Also, you have to visit one of the bank's six branches to open it.

The bank's six branches are located in Northern Virginia near Washington DC in the cities of Arlington, Annandale, Leesburg, Fairfax, Chantilly, and Manassas. Credit for this find goes to this Fatwallet thread.

Bankrate's Survey of Checking Accounts read and submit comments for this post

Bankrate.com's latest survey of large banks shows that ATM fees continue to rise while interest checking accounts are still a bad deal. To avoid fees, Bankrate recommended noninterest checking accounts that have no minimum balance requirements. As for ATMs, look for banks or credit unions that belong to surcharge-free ATM alliances that provide free access to ATMs nationwide. Also, look for banks that reimburse you for fees charged for using other banks' ATMs.

I'll continue to be on the look out for free checking account deals. Signup bonuses are often only for interest checking accounts. But as the Bankrate.com survey shows, the bonus will likely not make up for fees if you're not careful. Some of the recent free checking account deals that I found were at an Indiana bank, a Missouri bank and an Ohio bank.

Two online banks that have free checking accounts include EverBank's FreeNet Checking and ebank's eFree Checking. Refer to this previous post for more information on these.

MyBankingDirect Ups Money Market to 4.10% read and submit comments for this post

MyBankingDirect increased the interest rate of its money market account from 4.00% to 4.10% APY today. Early in October it had raised the rate from 3.75% to 4.00%. The account requires at least $5K to open. If the balance falls below this, the interest rates falls to 2.50% APY. If the balance falls below $1K, there's a $10 monthly fee.

MyBankingDirect has done a good job this year in keeping up and often surpassing the savings account rate at EmigrantDirect. It use to have a $25 signup bonus, but this was dropped in October when the rate was increased to 4%.

As I mentioned in this previous post, MyBankingDirect has a few advantages over EmigrantDirect. One advantage is an ATM card with up to 3 refunds of ATM surcharge fees (up to $6) per statement cycle. Also you can use MyBankingDirect's Money HQ service for unlimited linking of external accounts and for account aggregation. However, there are some charges related to the Money HQ service. There's more discussion about these advantages and the disadvantages of MyBankingDirect at this Fatwallet thread. Details about fees are available at this MyBankingDirect page.

MyBankingDirect also offers a couple of short-term CDs. The 5-month CD earns 4.10% APY and the 6-month earns 4.20% APY. The only benefit of the 5-month CD over the money market is that it only requires $2.5K rather than $5K.