Ever get the feeling that someone is trying to get you to spend your money, perhaps to stimulate the economy? Banks seem to offer no encouragement for deposits lately. Here are some of the latest interest rate drops over the past few days.
- Dollar Savings Direct has dropped from 4.0% to 3.5% APY (2.0% as of May 2009)
- FNBO Direct has dropped from 2.8% to 2.6% APY (1.65% as of May 2009)
- E*TRADE Bank has dropped from 3.01% to 2.5% APY (0.95% as of May 2009)
- HSBC Direct has dropped from 2.6% to 2.45% APY (1.55% as of May 2009)
- Emigrant Direct has dropped from 2.5% to 2.4% APY (1.55% as of May 2009)
- ING Direct has dropped from 2.4% to 2.2% APY (1.5% as of May 2009)
In order to keep cash available for when an emergency strikes, it may be necessary to occasionally forgo a satisfying interest rate. This is one of those times. These choices are all better than earning 0.1% to 0.3% APY in your local bank branch. If the economy doesn’t pick up this year, we may see more of the same for the immediate future.
If you want to track how interest rates have changed over the past year, take a look at this table which shows a history of savings account interest rates.
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{ 3 comments… read them below or add one }
I’ve said it before and I will say it again. Check your local credit unions! I was living in Portland and initially earning 6% on my checking account up to $25,000 at Rivermark Community Credit Union. That rate has since dropped to 3.75% However, I recently moved to Austin and there is a local credit union here (United Heritage Credit Union) that is still offering 5.01% also up to $25,000. Rivermark is also offering a savings account with 4% up to $5000.
Fair warning, there are some things you have to do to earn these rates, but if you use your account you will most likely fulfill the requirements. For instance, Rivermark requires you to make 12 transactions using your credit/debit card, sign up for e-statements, and login to online banking once a month. United Heritage requires similar things, though I think they require direct deposit as well.
For me this is a no-brainer, I can keep my rainy day fund in my local credit union earning a nice interest rate and hardly have to think about it, plus I get all the benefits of a brick and mortar bank and local service. So I would strongly recommend checking around at your local credit unions to see if they are offering a comparable rate.
I have my savings with ING. I love their customer service, however it’s getting to the point that I might have to listen to Sean and see what my local credit unions are offering.
WTDirect just dropped to 2.51%.