Highest Interest Rates

Discover Bank has some high CD rates on their long term CDs, with a 4.57% APY 4 year CD and a 4.81% 5 year CD. Minimum balance on CDs is $2,500. Short term CDs have lower yields.

Discover Bank also has a money market account with a fairly competitive yield, at 3.04% APY.  Deposits over $50,000 yield 3.14%.

Banking with discover could be useful if you already have other accounts with them.

HSBC Direct recently raised the rate on their online savings account to 3.50%, which is higher than both E*Trade (3.15%) and Wamu (3.30%). This new rate applies to both new and returning customers.

Here are some of the details:

• No minimums or fees
• Only a $1 deposit required
• The rate is guaranteed through 8/15/2008
• ATM cards are available
• Unlimited links to external accounts
• No hard credit pulls

HSBC is one of the world’s largest and most reputable banks, so losing your money is probably a non-issue. Of course, it’s FDIC insured for the standard $100,000.

Bank of America’s Keep the Change Promotion has been around since 2005, but is worth taking another look at especially after Bank of America has announced that over 8 million customers are enrolled in the program. The promotion allows customer enrolled to have every purchase made with a Bank of America Check Card to be rounded up with the difference transferred to a Bank of America savings account.

While a forced program of savings is always a good idea, the best part of the promotion is that Bank of America will match 100% of the contributions to the savings account for the first three months and continue matching 5% a year thereafter up to a maximum total match of $250 per year. Let’s take a look at how a typical consumers with a check card might benefit:

Bank of America Keep the Change Math

Average Check Card Transactions per Month = 20

Average Automatic Rounded-Off Savings Amount = $0.50

Total Amount Transferred to Savings in a Year = $120.00

Bank of America’s Match for the First Three Months = $30

Bank of America’s Match for the Last Nine Months = $4.50

Total Bank of America Match = $34.50

Effective Savings Rate = 28.8%

The effective savings rate does not take into account the token rate of interest paid on the savings account. In addition, because Bank of America will match up to $250 the effective savings rate could be much higher than the example where only $120 was transferred to the savings account over the course of the year. Another footnote to the Bank of America deal is that the bank will allow up to five checking account per household to participate, which would mean that the total match could be up to $1,250 for a household with multiple check cards used actively.

AARP Financial Savings Center cut the rates today on both its High Yield Savings account and its Jumbo Secure Money Market account. The new yield is 4.05% APY for both. The Jumbo MMA yield had been 4.75% APY, and the savings account yield had been 4.50% APY. The new rate will only apply to accounts opened from today. Those who had accounts opened prior to today are still getting the old yields. They will be grandfathered in for now, but there’s no guarantee how long this will last.

Account Features:

The savings account and money market account share the following features:

• AARP membership is required
• Initial funding can be done by check or wire transfer
• Wire transfers: free incoming, $20 outgoing
• ACH transfers cost $2 via MoneyHQ service for incoming and outgoing
• MoneyHQ ACH in/out transfers limited to $5K/day and $35K/mo
• ATM card with $4.50/mo in reimbursements
• Only a soft credit pull

Savings Account features:

• $1 minimum opening deposit
• No monthly service charges

Money Market Account features:

• $200 minimum opening deposit
• $10/mo fee if balance falls under $200
• Check writing

Interest Checking Account features:

• $50 minimum initial deposit
• No monthly service fees for balances over $25
• First 25 online bill payments per month are free
• ATM card with $6/mo in reimbursements

Countrywide Bank has recently raised their long term CD rates by several basis points. All CDs over 18 months have been increased. 18 month CDs now yield 4.10% APY, while 3-5 year CDs yield 4.50% APY, some of the highest rates available. Countrywide CD’s all have a $10,000 minimum balance and are FDIC insured up to $100,000.

• 91 days of interest early withdrawal penalty for terms under 12 months
• 180 days of interest early withdrawal penalty for terms of 12 to 60 months
• Grace period at maturity when you can close without penalty is 10 calendar days
• No hard credit inquiries for opening CDs or savings accounts
• CD funding options: mail a check, wire transfer, or drop off check at a CW financial center

Countrywide has had its share of subprime mortgage problems recently, and it’s slated to be bought out by Bank of America. However, with continually deteriorating credit conditions, it would be wise to keep your deposits less than the FDIC insured amount.

E*Trade Financial currently has a pretty high savings rate on their complete savings account, with a 3.45% APY. This is one of the best savings rates currently available online.

Their savings account features:

• $1 minimum deposit to open account
• No minimums or account fees
• No hard credit inquiry
• Free online ACH transfer system
• 6 withdrawal limits per month
• $100K per day limit on outgoing and incoming ACH transfers
• ACH transfers complete in one business day
• 9 day hold time for initial deposit (ACH or check)
• No hold for wire transfers

You can also sign up for a checking account that features:

• 3.25% APY on balances over $5,000
• Unlimited ATM fee refunds
• Free online bill pay
• Unlimited check writing
• Online check and deposit images

E*Trade has seen some financial problems recently, but as long as you keep your deposits under the FDIC insured limits there should be nothing to worry about. If you already have an account with E*Trade, you can link this new savings account to it. Visit their website for more information.

WTDirect is now offering a highly competitive 3.31% APY on their high yield online savings account. The minimum balance required for this rate is $10,000; any balances from $1-$10,000 will earn 3.31% APY for the first 60 days. If your balance is lower than $10,000 after the first 60 days, the interest rate drops to a low 0.60% APY. Here are some of the account’s features:

• No minimum balance fees or online transfer fees
• No hard credit pull when opening your account
• 6 free transfers are available per month
• Allowed an unlimited amount of linked external accounts
• Transfers typically take 3-5 business days
• Interest continues to accrue until the funds actually leave your account
• Interest is compounded daily and will be credited to your savings account monthly
• The daily balance method is used to calculate interest on your account

WTDirect has FDIC insurance on every account with Wilmington Trust FSB, which protects your money up to $100,000 per depositor. Bankrate.com has given WT Direct a review of 4/5, which is a safe and sound rating. For more information, call their customer service hotline at 1-800-WTDIRECT or visit their savings account website here.

Capital One Direct Banking is currently offering a rate of 3.10% APY* on their Capital One Direct Banking High Yield Money Market accounts. Capital One Direct Banking High Yield Money Market Account rates are historically among the best in the nation. The account offers hassle-free access to your money and the security of FDIC insurance.

This account has no minimum balances, and no extra fees or requirements. Make the smart choice – open a Capital One Direct Banking High Yield Money Market Account. Opening a new account is fairly straightforward and simple. There are four ways to make your initial deposit: check, wire, ACH, and internal transfer from an existing capital one account. This money market account is a great way for you to maintain some liquidity while earning a great rate on your money.

Eloan.com currently has high interest rates available on their savings and certificate of deposits. Their savings account yields 5.25% APY, and is a great way to maintain liquidity while earning a high yield on your money. They also have some of the highest CD rates available, with a 5.55% APY on their 3 month CD. Minimum deposit for all CDs is $10,000; there is no minimum for the savings account.

Eloan is FDIC insured.

Wells Fargo is currently offering a 4.90% APY CD rate on their 5 month certificates of deposit. As a whole, Wells Fargo CD rates are not really the highest rates available, as many other online banks offer higher rates. However, with the recent credit problems and many banks facing loan defaults, one might sleep better at night with a safe bank such as Wells Fargo or Bank of America. Minimum deposit required for this rate is $5,000. The CD rate table is available at the Wells Fargo website.