Mon 25 Feb 2008
At the end of last year I found myself banking at a new bank… the interesting thing to consider is that I copied down the interest rates for my savings account at this bank at the time, which provides for a nice point of comparison.
Here is a quick table of the interest rates back then compared to today. Mind you, this is only after 3 months time…
| Balance | Dec 2007 | Feb 2008 |
| Up to $1k | 2.05% | 1.26% |
| Up to $5k | 3.11% | 1.31% |
| Up to $10k | 3.49% | 1.76% |
| Up to $25k | 3.63% | 1.86% |
| Over $25k | 4.26% | 2.01% |
I can only imagine how low rates are at the big retail banks.
The interest rates to be earned on cash have been cut in half in barely a quarter’s time. I read in a news article today that the same bank has put thousands of HELOCs on hold (HELOC = home equity line of credit) due to fear of falling real estate values that back the credit.
The flip side is that you can still get higher rates from the online money market accounts… ING Direct (3.4%), HSBC Direct (3.55%). They’re down significantly from previous rates (~5% for HSBC), but not quite as dramatically as retail banks.
And if you’re not too particular (or have complete faith in the FDIC insurance) you can also go to E*Trade for 4.1% rates.
March 2nd, 2008 at 8:55 am
JasonG said “I can only imagine how low rates are at big retail banks”.
The rates on their “Balance Rewards Money Market account is:
Less than $2,500 0.35
$2,500 – $9,999 1.98
$10,000 – $24,999 1.98
$25,000 – $49,999 1.98
$50,000 – $99,999 1.98
$100,000 – $499,999 2.18
$500,000 – $2,499,999 2.37
$2,500,000 and over 2.37
Not horrible for a bank that used to offer really, really, really poor rates on savings accounts.
Currently the standard savings account offers:
All Balances 0.20%
WOW! The erosion of your money due to inflation and taxes. Inflation for January, if you don’t eat , use transportation, or heat your house was at a 3.6% annualized rate.