Good CD Rates And Gifts From iGObanking
Flushing Savings Bank in New York has caught our eye with oldest gimmick in the book — free gifts for opening an account.
To qualify, you must buy a certificate of deposit from its iGObanking online bank, through a special GiftsforBanking.com Web site.
The best choices are 24-month CD at 1.90% APY or a 60-month CD at 3.15% APY, which are close enough to the best nationally available rates to be worth considering.
The array of gifts (including this nifty grill) is the best we’ve seen since Irwin National Bank gave away HDTVs last summer.
Top 6-Month CD Rates Hold At 1.60%
Country Bank leapt to the top of our rankings of the best 6-month CD rates last month — and it’s still there.
The small bank with 14 branches in central Massachusetts, continues to pay 1.60% APY, with a very reasonable minimum deposit of just $500.
The downside is that you can’t open an account online. You have to call the bank at (800) 322-8233 and a representative will explain how to buy a certificate of deposit by mail.
But Country Bank has been at or near the top of our rankings for almost six months and we haven’t heard a word of complaint about the bank’s customer service.
Four other banks are offering 1.40% APY to savers in all 50 states. They are:
The Jacksonville Bank, which has five locations in northeast Florida and requires a $1,000 minimum deposit.
AmTrust Direct, whose parent company was seized by the FDIC in December and sold to New York Community Bank. It requires a $1,000 minimum deposit.
Earthstar Bank, with four branches in Philadelphia, requires a minimum deposit of $500 in new money to earn this rate.
The Palladian Private Bank, a division of The PrivateBank and Trust Co. , with 34 locations in 10 Midwestern states. A $10,000 minimum is required.
Those rates are more than four times the national average for returns on 6-month CDs, which has fallen to a record low 0.33% APY this month.
Click on our CD calculator to find the return on any certificate of deposit, regardless of size, interest rate or term.
Raise Interest Rates To Spur Lending?
We know that flies in the face of all conventional economic wisdom.
But for the past year the Federal Reserve has been providing commercial banks with an almost limitless supply of free money in the hope that they’ll make lots of new loans and help boost the economy out of the recession.
Yet the banks are extending precious little credit to consumers. To small businesses. To anyone.
Could it be that Fed Chairman Ben Bernanke has pushed conventional economic wisdom too far by driving interest rates too low?
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Best 24-Month CD Rates Edge Lower
The banks are pretty much the same. But the returns are worse.
That’s the sorry story of our latest rankings of the best, nationally available 24-month CD rates.
In November our top-paying banks were offering 2-year certificates of deposit for 2.60% to 2.55% APY and you only needed a $1,000 minimum deposit to qualify for the top rate.
This month you’ll earn 2.50% to 2.30% APY and need a whopping $50,000 to qualify for the top rate.
Although that’s still twice as much as you can make with the typical 2-year CD, it’s not saying much. The average rate on these CDs plunged to a record low of 1.26% APY last week.
The best, nationally available deals on 24-month CDs are:
2.50% APY with a minimum deposit of $50,000 for “Silver CDs” from Frontier Bank, which has 50 branches in Washington and Oregon. You can also earn 2.45% with a $25,000 minimum deposit and 2.40% with a $500 minimum deposit.
2.40 APY with a minimum deposit of $1,000 from The Jacksonville Bank, with five locations in that Florida city.
2.40 APY with a minimum deposit of $1,000 from Atlantic Coast Bank, with 12 full-service branches in southeast Georgia and northeast Florida.
2.30 APY with a $5,000 minimum from Hudson City Bank with dozens of branches in New Jersey, New York and Connecticut. If you live near a Hudson City branch the minimum deposit is only $500.
Click here to compare these offers with the best CD rates from dozens of other banks in our database.
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Fed Keeps Pounding Down CD Rates
Savers struggling with record-low CD rates got no help from the Federal Reserve this week.
The Fed’s rate-setting committee renewed its pledge to keep interest rates artificially depressed for an “extended period” to ensure a strong economic recovery.
The committee acknowledged the economy has “continued to pick up” and that “deterioration in the labor market is abating” since employers are laying fewer workers off this fall.
But the Fed said it would continue to boost growth and job creation by charging commercial banks 0% to 0.25% for overnight loans.
As long as the government-controlled Fed provides commercial banks all the money they need for virtually nothing, those banks can pay a pittance for our savings.
No wonder four of the five certificates of deposit we follow fell to new record lows in Bankrate’s Dec. 16 survey of large banks and thrifts. The average annual yield for a:
3-month CD fell to 0.37% from 0.38% this week. That’s the lowest average since the survey began tracking 3-month CD rates in March 1989.
6-month CD fell to 0.51% from 0.52% — the lowest average since the survey began tracking 6-month CD rates in January 1984.
1-year CD fell to 0.82% from 0.83% — the lowest average since the survey began tracking 12-month CD rates in October 1983.
2-year CD fell to 1.26% from 1.28% — the lowest average since the survey began tracking 24-month CD rates in March 1989.
5-year CD held at 2.08% after falling for four straight weeks. The 2.08% is the lowest average rate since the survey began tracking 60-month CDs in January 1984.
With average rates like this you can’t settle for average returns.
Use our database of CD rates to find and compare the best deals from scores of banks.
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H&R Block Tops 6-Month CD Rates
H&R Block Bank has jumped to top of our rankings of the best 6-month CD rates.
Its promotional offer of 2.0% APR with a minimum deposit of $10,000 is available until Sept. 30, and you can apply online.
That’s the same rate United Central Bank was offering when it led our latest rundown of the best, nationally-available 6-month certificates of deposit.
But United Central cut its rate in half just before Labor Day and H&R Block stepped up to take its place as the only bank still offering 2.0%.
Click here to compare these rates with the best CD rates and terms from dozens of other banks in our extensive database.
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Credit Cards Rates, Fees Keep Going Up
Well, you can’t say they didn’t warn us.
The banks threatened to go on a rate-raising, fee-hiking, rule-writing rampage if Congress approved the Credit Card Accountability and Responsibility Act of 2009.
It did and the result has been an unending stream of letters from my credit cards making good on that threat.
But I still find it ironic that the most recent arrived the day after the first few provisions of the law intended to protect me from the credit card industry’s worst abuses took effect.
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Local Deals Offer Highest CD Rates
Small banks are paying local customers 2.5% or more for short-term certificates of deposit — beating the best nationally-available CD rates by almost half-a-point.
That’s because the highest CD rates continue to be offered through deals restricted to the local customers of community banks.
In most cases the best rates are on odd-term certificates of deposit — CDs that don’t mature in the traditional 6-, 12- or 24-months.
But they routinely:
Pay more than twice the national average of comparable, traditional CDs — a record-low 0.98% APY for 12-month CDs right now.
Beat the best nationally-available rates — currently 2.15% APY for a 12-month CD from OneWest Bank.
Here are just some of the deals you can find out there. In each of these examples the CDs must be purchased in person at a local branch.
2.55% APY on a 13-month CD with a minimum deposit of $100 from the Bank of Kirksville, which has eight locations in northeast Missouri.
2.50% APY on a 15-month CD with a minimum deposit of $500 from Enterprise Bank of South Carolina, which has 12 locations in South Carolina.
2.50% APY on a 13-month CD with a minimum deposit of $500 from Atlantic Southern Bank, which has 13 branches in Georgia and Jacksonville, Fla. (This deal is also available at the three Georgia branches of Sapelo Southern Bank, a wholly-owned subsidiary.)
Click here to compare these offers with the best CD rates from dozens of other banks in our extensive database.
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Competition Spurs CD Rates In Northwest
Banks in the Pacific Northwest appear to be doing something we haven’t seen in almost a year — competing for our money.
Calling this a rate war would be a stretch.
But a couple of regional banks are offering some of the best CD rates you’ll find anywhere in the country.
Frontier Bank, which has more than 40 branches in Washington and Oregon, is paying 2.60% APY on 24-month certificates of deposit with a $500 minimum deposit.
Invest at least $50,000 and you can earn 2.70% APY.
That topped our August rankings of the best, nationally-available 24-month CD rates.
Banner Bank is paying 2.50% APY on a 21-month CD, with a minimum deposit of $2,500.
You must apply online to get the Internet special, but it’s only open to residents of Washington, Oregon and Idaho, where Banner operates more than 100 branches and loan offices.
Community banks have leapt in, some with even better rates.
The Bank of Oswego, with two branches in Lake Oswego, Ore. is offering 2.75% APY on a 24-month CD with a $1,000 minimum deposit.
Although it says the rate is available nationwide, you can’t apply on-line. To open an account you have to speak with a customer service representative at 503-635-1699.
We wouldn’t be surprised if interest in this CD swamped Bank of Oswego’s phone lines and quickly forced it to limit this rate to local customers.
But with CD rates at or near record lows, savers need more of this.
Click here to compare these deals with the best CD rates from dozens of other banks in our extensive database.
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Citi Takes Lead In 18-Month CD Rates
It’s been a long time since a big bank had a CD rate that made us sit up and take notice.
But Citibank is offering 2.25% APY on an 18-month certificate of deposit with a very modest $500 minimum deposit.
That’s the best nationally-available deal on an 18-month CD that we know of, beating the 2.13% APY from Discover Bank, OneWest Bank and MetLife Bank. (They have much higher minimum deposits, too.)
The Federal Reserve and Treasury Department have been pumping so much cheap money into the big banks that they haven’t needed our savings.
Ever since the banking crisis struck last the best rates have come from smaller banks that still needed to compete for deposits.
But desperate savers would flood those banks so much money they’d quickly lower their rates, sometimes in a matter of days, contributing to the extraordinary volatility we’ve seen in CD rates this year.
Could Citi be leading the big banks back into the market?
Use our database to compare Citi’s offer with the best CD rates from scores of other banks.
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